A customer receives a verbal confirmation that her securities were sold at a price of $28.35 per share. A clerical error was subsequently discovered, and the corrected price of $27.85 per share is shown on her written confirmation. Which of the following statements is true?
Regardless of information provided in an erroneous report, trades are based on actual executions. (11-32)
A customer writes an XYZ June 60 straddle for a 5-point premium. At expiration, the market price of XYZ is 50 and the put side is exercised. The customer then sells the stock that was put to him at the current market price. The customer has realized a:
The customer has received a total of $5 in premiums or $500 for the straddle. The call side of the straddle expires, but the put is exercised. The writer must buy the stock at $60 per share (the exercise price). The stock is then sold at the $50 market price which results in a $1,000 loss ([$60 - $50] x 100 shares). However, since the customer initially received a premium when he wrote the straddle, the loss is only $500 ($1,000 loss from exercising the put - $500 premium). (15-16)
4.There are more hospitals located in Buffalo than in Albany
Competing hospitals could affect the project's revenue and therefore reduce the bond's security. Each of the other choices relate to taxes which do not secure revenue bonds. (8-10)
MSRB rules require a municipal securities principal to approve all transactions in municipal securities. (12-33
Which two of the following dates are used when calculating accrued interest on U.S. Treasury securities?
U.S. Treasury securities use the actual calendar to calculate accrued interest. Corporate and municipal securities use a constant 30 day month and 360 day year method. (7-4, 6-14)
When computing the dollar price of a municipal bond sold on a yield basis, which of the following call features would be used?
When pricing a bond, only a call feature that allows the issuer to call the entire issue is used. (12-31)
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