The initial equity in a new margin account, by NYSE and NASD rules is $2,000 unless the total
transaction is less than $2,000 as it is in this case. The customer, for the opening transaction
wil deposit the total amount of the purchase.
A customer purchased restricted stock in a Regulation D private placement offering 18 months
ago. She instructs the registered representative to sell as much of the stock as possible
immediately. Which of the following are true?
I. The stock may not be sold for another six months
II. The RR must file a Form 144 no later than concurrently with the sale
III. The customer may sel an amount of her stock representing the greater of
1% of the company's outstanding stock, or the average of the past six weeks of trading volume.
IV The customer may sell an amount of her stock equal to the greater of 1% of the company's
outstanding stock, or the average of the immediately past four weeks of trading volume.
A. I, II, III
B. II, IV
C. I, IV
D. II, III
The holding period for restricted stock is one year, fully-paid. During the second year, an
investor must file a Form 144, which covers 90 days of sales, with the SEC no later than
concurrently with the sale. The volume limitation for sales is the greater of 1% of the company's
stock or the average of the past four weeks trading volume.
A registered representative is explaining the details of a new municipal offering to a client. She
explains that the debt service for the bond will be paid from taxes collected from the sales of
tobacco and alcohol. This type bond is known as which of the following?
A. Special assessment bond
B. Ful faith and credit bond
C. Special tax bond
D. Moral obligation bond
Special tax bonds are a form of municipal revenue bonds, sometimes called "sin tax" bonds
because the revenues are from excise taxes on commodities such as alcohol and tobacco--
gasoline taxes are also included.