QUESTION: 97

The stock of Southwest Airlines (LUV) is selling for $11.77 in mid-September. An October put on the stock is selling for $1.45 and gives the owner the right to sell the stock for $13.00 prior to its expiration. In this example, the option premium is:

$13.00.
$1.23.
$1.45.
$11.77.

Answer(s): C

Explanation:

The option premium is $1.45, the cost of the option.

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QUESTION: 98

Nat Informed places a market order to buy 200 shares of Abercrombie & Fitch (ANF) on Thursday, September 16th.
When will Nat be required to pay for this Transaction?

by the end of the trading on September 15th.
on the next trading day, September 16th.
on Tuesday, September 21st.
on Friday, September 17th.

Answer(s): C

Explanation:

If Nat places an order to purchase 200 shares of Abercrombie & Fitch on Thursday, September 16th, payment will be due on Tuesday, September 21st. The settlement date for stock transactions is T + 3, which means the third business day after the trade.
Saturday is not a business day.

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QUESTION: 99

A bond has a face value of $1,000, matures in 10 years, and pays an 8% coupon, with interest paid semiannually. If the bond is priced to yield 8.8%, it is selling:

at par.
at a discount.
at a premium.
at its maturity value.

Answer(s): B

Explanation:

If the bond is priced to yield 8.8%, it is selling at a discount. Its nominal yield is the same as its coupon rate, 8%, which is what it would yield if it were selling at its par value, which is the same as its maturity value and its face value--$1,000. In order to be yielding more than this, the bond has to be selling for less than its face value, such that investors are also getting a return from capital gains. A bond that is selling below its face value is said to be selling at a discount.

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QUESTION: 100

Ms. Newbie has recently become licensed as a registered representative and is disappointed to discover no clients standing in line at the door to her office at Savvy Investments. She decides she simply must take on a second job in order to pay the rent. The fitness club to which she belongs is advertising for a weekend receptionist, and the club manager has told her the job is hers if she wants it. Given this scenario, Ms. Newbie:

can accept the job since it only entails weekend work, which does not conflict with the hours she works as a registered representative.
can accept the job only if she tells her supervisor at Savvy that she will be working weekends.
must provide a written notice to Savvy Investments and await the firm's approval before accepting the job.
can accept the job without any restrictions. She is not tied to Savvy by ball and chain, and her work as a receptionist at a fitness club does not have anything to do with the financial industry.

Answer(s): C

Explanation:

Ms. Newbie must provide a written notice to Savvy Investments and await the firm's approval before accepting the job at the fitness center. It is also the case that Savvy is entitled to withhold approval.
FINRA's rule states, "No person associated with a member in any registered capacity shall be employed by, or accept compensation from any other person as a result of any business activity, other than a passive investment, outside the scope of his relationship with his employer firm, unless he has provided prompt written notice to the member."

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Free Series 6 Exam Braindumps (page: 25)

QUESTION: 97

Explanation:

QUESTION: 98

Explanation:

QUESTION: 99

Explanation:

QUESTION: 100

Explanation: