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Series 65 Practice 5

A detailed financial market scene showing graphs, bonds, and currency symbols, evoking a sense of investment and trading knowledge.

Test Your Knowledge: Series 65 Practice Quiz

Prepare yourself for the Series 65 exam with this challenging quiz designed to test your understanding of bonds, investments, and financial regulations.

Explore various types of investment securities.
Understand key concepts related to interest rates and bond pricing.
Gauge your knowledge on market risks and investment strategies.

15 Questions4 MinutesCreated by InvestingExpert42

MMY Corporation has convertible debentures that can be exchanged for shares of MMY common stock at a set price of $40. If MMY common stock is currently trading at $57, what is the parity price of the MMY’s convertible debentures?

$1,017

$1,425

$1,000

$1,765

Which of the following statements are true of bonds issued in bearer form?

They no longer exist

They are no longer issued in this manner

Interest coupons are detached from the bonds

Proof of ownership is required at maturity

What is true about a bond with an 8% coupon trading at a 10% YTM?

It is trading at a discount

The price of the bond went up

Interest rates have risen

The bond is trading at a premium

Which of the following bonds are trading at a premium?

8% coupon, 9.10 basis

8% coupon, 9.50 basis

8% coupon, 7.70 basis

8% coupon, 8.00 basis

All of the following statements are true concerning zero coupon bonds except:

Interest is received at maturity

Interest is taxed annually

Reinvestment risk is eliminated

Taxes paid do not raise the investor’s cost basis - taxes paid always increase cost basis

Which of the following represent money market securities?

ADR’s

Short-term equity instruments maturing in one year or less

Preferred stock

Commercial paper

Which of the following are associated with falling interest rates?

Bond prices rising

Bond prices falling

Coupon rates rising

Coupon rates falling

If a company is liquidated, interested parties will be paid in which order?

Preferred, secured, common, employees

Employees, secured, preferred, common

Secured, employees, preferred, common

Employees, preferred, secured, common

Which of the following investors are considered to have an equity position?

Owners of callable preferred stock

Owners of debentures

Owners of subordinated debentures

All of the above

All of the following investments come with a guarantee of interest and principal payment by the U.S. Treasury except:

T-bills

GNMA

T-bonds

Treasury receipts

Which of the following represent a benefit of owning fixed-income securities?

Inflation protection

Liquidation priority

Capital appreciation

Growth

Which of the following is probably the least significant risk of owning a municipal bond?

Inflation risk

Default risk

Interest rate risk

Reinvestment risk

Which of the following must be a closed-end fund?

NAV = $9.00, POP = $9.25

NAV = $9.00, POP = $9.00

NAV = $9.00, POP = $8.50

NAV = $9.00, POP - $9.10

The maximum sales charge for a mutual fund is

8.5%

9.0%

10%

Which of the following statements are true concerning open- and closed-end funds?

Open-end funds may invest in debt securities

Closed-end funds may invest in debt securities

Open-end funds may issue debt securities

Closed-end funds may issue debt securities

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