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The advantages surpassing others
FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. Jack purchased a new bond of the Candlestick Corporation for its face value of $1,000.The bond has a
coupon rate of 3.5%, makes semiannual interest payments, and matures in fifteen years. A year after
purchasing the bond, Jack needs to sell the bond to offset some major expenses he incurred when his
home caught on fire. Interest rates in the economy at this time have fallen to 3.0%.Given this scenario,
when Jack sells the bond, he can expect to receive which of the following?
A) less than what he originally paid for the bond.
B) more than what he originally paid for the bond.
C) exactly what he paid for the bond.
D) $965, which is what he paid for the bond less the $35 in interest he received during his year of owning
the bond.
2. In mid-September, the stock of Amazon.com, Inc. (AMZN) is selling for $147.A January call option on the
stock is selling for $6.10 and has a strike price of $160. This call option is:
A) in the money.
B) at the money.
C) overpriced. No one should pay $6.10 for the right to buy a share of stock for $160 when its current
market price is only $147.
D) out of the money.
3. A table providing detailed information on the various fees and expenses charged by a mutual fund can be
found in the fund's:
A) financial statements.
B) annual report.
C) Statement of Additional Information (SAI. )
D) prospectus.
4. Jack is an investment adviser representative employed by Giant Investments, a family of mutual funds.
Jack has recently read an article posted on the web that he thinks explains some consequences of some
tax law changes that are being considered extremely well, and he e-mails his existing retail customers
with a summary of the salient facts of the article. Given these facts:
A) Both A and C are true statements regarding this situation.
B) Jack must submit a copy of the e-mail to a principal of the company, but he did not need to do so prior
to sending the e-mail.
C) a copy of the e-mail must be submitted to FINRA within 10 days of Jack's hitting the send button.
D) Jack has violated FINRA rules if he did not first have a principal of Giant approve his e-mail prior to
hitting the send button.
5. In mid-September, the stock of Oracle (ORCL) is selling for $25.60 a share. Ms. Hedge owns shares of
Oracle and buys a put option on the stock with a strike price of $27 that expires in October for $2.20 per
optioned share. Just prior to expiration, Oracle's stock is selling for $29. Ms. Hedge should:
A) exercise her option and sell Oracle for $27 a share.
B) let her option expire worthless.
C) exercise her option and buy more shares of Oracle for $27 a share.
D) exercise her option and sell Oracle for $29 a share.
Solutions:
Question # 1 Answer: B | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: B |