Series 65 Exam Lesson 22 Quiz
This is a Series 65 Exam Lesson 22: a free quiz for Series 65 Exam Lesson 22 Quiz which is covering Credit Default Swaps, Adjustable Rate Securities and SPV’s. Try it and see how you do if you need help listen to the lesson over.
Series 65 Lesson 22 Quiz
This is a Series 65 Lesson 22 Quiz which is covering Credit Default Swaps, Adjustable Rate Securities and SPV’s. Try it and see how you do if you need help listen to the lesson over.
Questions covered include
Questions:
Below are questions based on the previous lesson. Choose the letter of the correct answer.
1. Which of the following are derivative type products?
(Select all that apply.)
A. auction rate securities
B. credit default swaps
C. exchange-traded notes
D. market index-linked CDs
2. The reason you would buy a credit default swap if you are a speculator is you expect the credit worthiness of a company to ___.
A. go up
B. go down
C. be constant
D. be the same as the leading index on the market
3. Credit default swaps are traded ___.
A. on floors
B. on the primary market
C. on the secondary market
D. over-the-counter
4. There is no limit to the number of credit default swaps that can be written on any specific position.
A. True
B. False
5. It is a credit default swap used as a hedge vehicle for a position.
A. covered CDS
B. indexed CDS
C. married CDS
D. naked CDS
6. It is a credit default swap for bonds that you speculate on but do not own.
A. covered CDS
B. indexed CDS
C. married CDS
D. naked CDS
7. How much would you pay for a credit default swap of a $50,000 worth of bonds that has a spread of 25 basis points?
A. $125
B. $200
C. $2,000
D. $12,500
8. In a Dutch auction, a person actually puts back the bond to the issuer.
A. True
B. False
9. It is the lowest rate where there are enough purchasers willing to buy all the auctionable securities at a Dutch auction.
A. auction rate
B. clearing rate
C. interest rate
D. market rate
10. In a Dutch auction, the clearing rate is reset ___.
A. every 7 days
B. every 28 days
C. every 35 days
D. based on whatever is set in the offering circular or official statement
11. In a Dutch auction, bids higher than the clearing rate will be able to buy the bonds.
A. True
B. False
12. Which of the following happens in the case of a failed auction?
(Select all that apply.)
A. There are so many people putting back their bonds but so few people buying them.
B. There is no enough interest that develops in the market.
C. People could not get out of their positions.
D. People hold on to their auction rate securities at the minimum yield that was put in the bond covenant.
13. Which of the following are the risks in auction rate securities?
(Select all that apply.)
A. counterparty risk
B. credit risk
C. marketability risk
D. suitability risk
14. Which of the following is true in a market index-linked CD?
(Select all that apply.)
A. These are CDs with a yield equivalent to a portion of an index.
B. If the market goes up, you will participate equally on how much the upside of the market is.
C. If the market goes down, you are guaranteed that your principal will not fall below par.
D. If the bank issuing the CD goes bankrupt and the CD is not federally insured, you will not get back your principal.
15. If you don’t hold on to a market index-linked CD until maturity, you’re entitled to participate in its upside as long as the CD is FDIC insured.
A. True
B. False
16. Which of the following are risks in a market index-linked CD?
(Select all that apply.)
A. counterparty risk
B. credit risk
C. market risk
D. principal risk
17. In a market index-linked CD, you can only lose principal if the institution issuing the CD goes bankrupt.
A. True
B. False
18. Which of the following are risks in an exchange-traded note?
(Select all that apply.)
A. counterparty risk
B. liquidity risk
C. market risk
D. principal risk
19. Which of the following is true about exchange-traded notes and market index-linked CDs?
A. Exchange-traded notes are taxed at capital gains rate while market index-linked CDs are taxed at interest income tax rate.
B. Exchange-traded notes are taxed at interest income tax rate while market index-linked CDs are taxed at capital gains rate.
C. Both exchange-traded notes and market index-linked CDs are taxed at capital gains rate.
D. Both exchange-traded notes and market index-linked CDs are taxed at interest income tax rate.
20. Which of the following is true in a reverse convertible note?
(Select all that apply.)
A. If the stock goes up, you would participate in the upside of the stock.
B. As long as the stock is trading above the knock-in price, you would get the high interest that was paid on the reverse convertible note.
C. If the stock goes down, you are guaranteed to get out at par.
D. If the financial institution issuing the note goes bankrupt, you will be a creditor of that financial institution.
Series 65 vs Series 66 Exam
The Series 65 exam is designed for those who do not have a Series 7 license. The content of both exams are similar though the Series 65 will be more heavily concentrated on Investment products and economics (like you would need to learn for the SIE and Series 7 Exam). … The Series 66 exam has a little more State law (such as what you will find in the Series 63 Exam) and some esoteric investment products.
Our audio lessons for both the Series 65 and Series 66 cover the material you would need to learn for the SIE and Series 7 exam so it may be a little more than you need for the Series 66 but we want you to be fully prepared!
The only difference between the two series of exam lessons (the 65 and 66) is that the Series 66 exam also covers the material needed for the Series 63 exam.
Our other website s for FINRA and other certification Exams include:
https://www.series7podcast.com
https://www.series7podcast.com
https://insuranceexampodcast.com
https://insuranceexampodcast.com
https://www.reexampodcast.com/
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