Last Updated: Jun 08, 2026
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1. A short sale can be made in which of the following types of accounts?
A) margin account
B) a custodian account
C) special memorandum account
D) special cash account
2. Bubba holds 200 shares of common stock in a utility company and receives rights to subscribe to an
additional 100 shares at $20. The utility company is raising $40 million of new capital. How many shares
of common stock for the utility company were outstanding prior to the rights offering?
A) 4,000,000
B) 2,000,000
C) 40,000,000
D) 1,000,000
3. A bank or trust company that is acting as custodian for a mutual fund does which of the following?
A) provides investment advice to the fund's managers
B) guarantees investor losses on investments
C) redeem and issues fund shares
D) physically protects the fund's assets
4. A tax-free rollover of assets between qualified retirement plans for the benefit of a specific individual is
permitted so long as it is accomplished within:
A) 90 days
B) 60 days
C) one year
D) 30 days
5. A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50. Three days later,
when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer. The basis for the
dealer's markup is:
A) 23 1/2
B) 19 7/8
C) 5% above cost
D) 10 5/8
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: A | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: B |
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