FINRA Security Industry Essentials Practice Test 39

1. In any single life private annuity transaction, if the seller outlives his or her actuarial life expectancy, the purchaser will have paid __________ for the property. If the seller does not outlive his or her actuarial life expectancy, the __________ will have made a good financial deal.

2. How is the net asset value (NAV) of a mutual fund calculated?

3. The statement of cash flows is separated into all but which of the following categories?

4. Common stock is referred to as __________ because the owner of the stock is also an owner of the corporation and may participate in its capital and income growth.

5. Which of the following is considered a hybrid security?

6. Which of the following occurs when the supply of goods and services exceeds their demand?

7. An IRA must be created and funded by __________ of the calendar year following the year in which the contribution applies.

8. Which of the following calculates the required amount of an employer's annual contribution to a defined benefit plan to ensure that current and future plan benefits are available to the participants?

9. The Bank Secrecy Act of 1970 requires financial institutions to assist U.S. government agencies in detecting and preventing money laundering by filing reports of cash transactions exceeding which of the following daily aggregate amounts?

10. A fixed income security is subject to which of the following risks?

(1) Exchange rate risk

(2) Purchasing power risk

(3) Default risk

(4) Liquidity risk

(5) Reinvestment risk

11. ____ Diversification smooths price volatility, historical above-inflation return, can preserve purchasing power in a portfolio.

12. ____ Liquid, easily converted to cash, low default risk, low real return.

13. ____ Fixed return, may lose value if not held until maturity, fixed interest payments.

14. ____ Not liquid, generally adequate inflation hedge.

15. ____ Used to generate income and growth, marketable, historical above-inflation return, can preserve purchasing power in a portfolio.