In regard to discretionary accounts, which of the following statements is correct?
both B and C. Choice A is the opposite of a discretionary account. Both B and C are standard procedures for a discretionary account.
In a firm commitment offering, any shares that are not sold are:
owned by the members of the syndicate. In a firm commitment the underwriter buys the securities from the issuing company. If they don't sell to the public, they are owned by the underwriters.
Bubba has a short margin account with equity of $15,000 and a credit balance of $28,000.
What is th e current NYSE minimum equity maintenance requirement on Bubba's account?
$3,900. The requirement for short accounts is 30% of the current market value. The market value is $13,000 ($28,000 - $15,000). Multiplying by 30% equals $3,900.
A bank or trust company that is acting as custodian for a mutual fund does which of the following?
physically protects the fund's assets. The custodian holds the assets of the fund. The transfer agent redeems and issues fund shares.
A treasury obligation having no fixed rate of interest with a thirty-day maturity due April 22 is most likely a:
tax anticipation bill. These obligations pay no interest and their maturity comes after corporate tax payment dates. They are accepted for redemption at face value prior to maturity on corporate tax payment dates to encourage purchase by corporations.
