NASDAQ is:

A. an acronym for Norway's major stock exchange.

B. the government organization that insures accounts at U.S. brokerage firms.

C. a computerized system that links together the U.S. regional exchanges.

D. a computerized quotation system used in the over-the-counter market.

An ADR is:

A. a bond issued by an American firm that is denominated in dollars, but is sold to foreign investors.

B. a receipt designating ownership of shares of a foreign stock that are held in a trust.

C. another name for bankers’ acceptances.

D. a certificate of deposit offered by a foreign bank that is denominated in U.S. dollars.

Simple Simon owns 1,000 shares in the Pasty Pie Corporation, which has just declared a stock dividend of 5%. Just prior to this announcement, Pasty Pie was selling for $10 a share. This announcement will:

A. increase Pasty's shares outstanding and reduce Simple's proportionate ownership in the firm.

B. increase the number of shares that Simple owns to 1,050, which will increase the market value of the shares that he owns from $10,000 to $10,500.

C. increase the number of shares that Simple owns to 1,050, but this will not affect the market value of Simple's holdings.

D. increase Simple's cash by the amount of the dividend paid: 0.05 x $10 = $0.50 x 1,000 shares = $500.

The stock of Nutrisystem, Inc. (NTRI) is selling for $17.70 when Miss Piggy places a limit order to buy the stock at $17.65. During the period the order is open, NTRI falls to $17.60 and then increases to $17.67. Which of the following statements is most likely to be true in this scenario?

A. Miss Piggy bought NTRI at $17.67 a share.

B. Miss Piggy bought the stock for no more than $17.65 a share.

C. Miss Piggy bought the stock for no more than $17.60 a share.

D. Miss Piggy bought the stock for $17.66 a share.

The Federal Reserve announces that it plans to buy $3.89 billion in Treasury securities on the open market. All else equal, which of the following is a likely result of this Fed action?

A. Interest rates will rise, causing security prices to fall.

B. Money supply will increase, causing interest rates to fall.

C. Stock and bond prices should increase.

D. Both B and C are likely results of this Fed action.

Which of the following formulae is used to calculate the net dividend income per share of a mutual fund?

A. Subtract operating expenses from dividend and interest income and divide the result by the number of outstanding shares.

B. Divide gross investment income by the number of outstanding shares.

C. Subtract operating expenses from the income derived from dividends, interest, and short -term capital gains earned by the fund and divide the result by the number of outstanding shares.

D. Add dividends, interest, and short-term and long-term capital gains earned by the fund; subtract operating expenses; then divide the result by the number of outstanding shares.

Which of the following statements about 1035 exchanges are true?

I. A 1035 exchange refers to the exchange of all of the shares owned in one mutual fund for shares of another mutual fund in the same family of funds.

II. A 1035 exchange refers to the exchange of one variable annuity contract for another variable annuity contract without the need to pay tax on any of the income or capital appreciation associated with the original contract.

III.

A 1035 exchange refers to the exchange of a variable annuity contract for a whole life insurance policy offered by the same company with no tax consequences to the transaction.

A.

I only

B.

II only

C.

I and II only

D.

I, II, and III

Which of the following describes a difference between a Roth IRA and a traditional IRA?

I. Anyone with earned income can contribute to a traditional IRA, but not everyone with earned income can make contributions to a Roth IRA.

II. The contributions made to a traditional IRA may be tax deductible, but the contributions made to a Roth IRA are never tax deductible.

III. Contributions made to a Roth IRA may be withdrawn without penalty at any time whereas contributions to a traditional IRA may only be withdrawn without penalty when the contributor reaches 59 ½ or if the contributor meets some specific requirements (e.g., becomes disabled.)

IV.

When a contributor to a traditional IRA turns 70 ½, he must begin making mandatory withdrawals, but there are no mandatory withdrawals with a Roth IRA.

A.

II and III only

B.

I, II, and III only

C.

II, III, and IV only

D.

I, II, III and IV

Total Investments, a family of mutual funds, has prepared some new PowerPoint slides that it will use at a free financial planning seminar it offers to the general public. The new slides:

I. must be signed and dated by a registered principal of Total Investments.

II. must be filed with FINRA 10 business days prior to their first use.

III.

must be kept in a separate file by Total for three years after the date of their first use.

A.

I only

B.

I and II only

C.

I and III only

D.

I, II, and III only

Mr. R. Retired recently turned 61 and has decided to annuitize a variable annuity contract in which he had been investing. When he does so:

A. he will have to pay a 10% penalty for annuitizing the contract before he turned 62 ½.

B. his accumulation units will be converted into a fixed number of annuity units.

C. the value of his annuity units becomes fixed.

D. Both B and C are true statements.