1. Which of the following factors is not taken into consideration when determining the markup on a municipal securities transaction?
a.The dollar amount of the trade
b.The best judgement of the dealer
c.The fact that the dealer is entitled to make a profit
d.The financial condition of the customer
2. Tax-free municipal bonds will be least attractive to a(n):
a. Pension fund
b. Insurance company
c. Individual who has just inherited $1,000,000
d. Officer of a corporation who is in the 28% tax bracket
3. Under MSRB rules, all of the following statements are TRUE regarding customer confirmations, EXCEPT for the statement that the confirmation:
a. Must show commissions in an agency transaction
b. Need not show the markup in a principal transaction
c. Must disclose the third party to the trade in an agency transaction or offer to furnish such information upon request
d. Need not disclose if the broker-dealer acted as a principal or agent in the transaction
4. Which of the following factors would be LEAST useful when analyzing the credit risk of an issuer of general obligation bonds?
a. The London Interbank Offered Rate (LIBOR)
b. The tax base of the issuer
c.The amount of unfunded pension liabilities
d. The schedule of debt service requirements
5. A customer in the 28% tax bracket buys a 10% corporate bond at par. What is the investor's net yield?
a. 2.8%
b.7.2%
c.10%
d.13.9%
6. A broker-dealer that is an MSRB member firm sells bonds to one of its customers. If the broker-dealer is a member of the syndicate, the firm is entitled to the:
a.Takedown less the concession
b.Additional takedown plus the management fee
c.Total takedown less the management fee
d.Total takedown