A registered representative sells shares of a mutual fund to a customer at a dollar amount of $49,500. The RR does not disclose that a reduced sales charge is available at amounts of $50,000 and above. This practice is a(n):
A. Acceptable practice known as a breakpoint sale
B. Acceptable practice known as front-running
C. Prohibited practice known as front-running
D. Prohibited practice known as a breakpoint sale
Answer: D
Investment
- Which TWO of the following statements are TRUE about real estate investment trusts (REITs)?
- Ms. Taylor purchased $25,000 of mutual fund shares. To date, the fund has paid her $1,000 of net investment income and $500 of capital gain distributions. If Ms. Taylor reinvested all of these monies back in the fund, the cost basis of her total investment is:
- Which of the following statements is TRUE regarding the straight life payout option available in a variable annuity?
- Mr. and Mrs. Blue both have full-time jobs and are covered by their employers' pension plans. Mr. Blue's salary is $65,000. Mrs. Blue's salary is $75,000. If they file a joint tax return and each wants to open an IRA:
- An investor owns 1,000 shares of a mutual fund. The offering price is $12 per share. The fund charges a 6% sales charge and has a 1% redemption fee. If the investor redeems his shares, he will receive approximately:
- Which TWO of the following statements are TRUE concerning hedge funds?
- An uncle would like to invest for his nephew's college education. Which of the following factors is a benefit of a 529 plan?
- Under what circumstances will the payout from a variable annuity increase?
- Which TWO of the following choices are advantages of trading exchange-traded funds (ETFs)? They may be purchased on margin Investors can receive breakpoints There is no fee to liquidate shares They may be sold short
- Who is permitted to participate in a tax-sheltered annuity established under Internal Revenue Code Section 403(b)?
- An increase in which of the following choices would cause an increase in the expense ratio for an investment company?
- Which of the following statements about a closed-end investment company is TRUE?
- In reviewing prices for a mutual fund, an investor notices that the Beacon Fund has two listings, one for Class A shares and the other for Class B shares. The distinction between the two classes of shares is most likely that:
- Which of the following statements is NOT TRUE about a Keogh plan?
- Which TWO of the following statements are TRUE regarding the contract holder of a variable annuity?
- Over the last 20 years, Grant Rock, age 66, has invested $200,000 in a tax-qualified annuity sponsored by his employer, Tombstone Enterprises. The account is currently worth $800,000. He decides to annuitize the contract and begin drawing down the contract balance. In the first year he has received $50,000. How will these distributions be taxed?
- The separate account of the variable life policy that Tom Jones bought is performing poorly. Does this have any influence on his death benefit?
- The BG mutual fund has a NAV of $11.72 and a maximum offering price of $12.67. What is the maximum sales charge for this fund?
- Which of the following securities is LEAST appropriate for an IRA account?
- An investor might take advantage of a Section 1035 exchange if:
- Which of the following choices is a type of retirement plan associated with individuals who work for a publicly traded company?
- A client redeems shares of a mutual fund. According to current regulations, a check must be sent within how many days of submitting a redemption notice?
- An advantage of a Coverdell account over a 529 plan is:
- Normally, the largest expense incurred by an open-end investment company is the: