Which of the following describe an underwriter's financial liability if a syndicate is established as an Eastern account?

Divided liability to purchase securities from the issuer.

Undivided liability to purchase securities from the issuer.

Divided responsibility for securities that remain unsold.

Undivided responsibility for securities that remain unsold.

A) II and IV.

B) I and III.

C) I and IV.

Answer: A) II and IV.

Which of the following underwriting arrangements is associated with an invitation, typically found in The Bond Buyer, directed at investment bankers and broker dealers, intended to solicit interest in underwriting a new municipal issue?

A) Competitive bid.

B) Best efforts.

C) Negotiated.

D) All or none.

Answer: A) Competitive bid.

A dealer that quotes a concession of ½ to another dealer means:

A) ½% of the market price.

B) ½% of the dealer's price.

C) a 50% commission split.

D) $5 per $1,000 of par.

Answer: D) $5 per $1,000 of par.

A municipal finance professional (MFP) is

A) an elected official of a municipality having some decision-making authority regarding new municipal bond issues

B) employed by a municipality to oversee the issuance of municipal bonds

C) an employee of a broker/dealer engaged in municipal security representative activities other than retail sales or who solicits municipal securities business for the broker/dealer

D) an employee of the MSRB specializing in seeing that broker/dealers adhere to the MSRB rules and regulations regarding the sales of municipal bonds to retail customers

Answer: C) an employee of a broker/dealer engaged in municipal security representative activities other than retail sales or who solicits municipal securities business for the broker/dealer

Which of the following describes the responsibilities of a municipal finance professional (MFP)?

An associated person of a broker/dealer engaged in municipal securities representative activities other than retail sales

A registered representative engaged in the retail sale of municipal securities to individual investors

Is subject to the political contribution rules as outlined in MSRB Rule G-37

Is not subject to the political contribution rules as outlined in MSRB Rule G-37

A) II and IV

B) I and III

C) I and IV

D) II and III

Answer: B) I and III

A Municipal Finance Professional (MFP) is

A) an employee of the Municipal Securities Rule Making Board (MSRB) responsible for broker dealer compliance regarding MSRB rules.

B) an associate of a broker dealer engaged in municipal securities representative activities, other than retail sales.

C) a registered representative engaged in the sale of municipal securities to public customers.

D) an elected official of a municipality with decision making responsibilities regarding municipal issues.

Answer: B) an associate of a broker dealer engaged in municipal securities representative activities, other than retail sales.

A person with no prior industry experience is hired by a municipal dealer to work as a clerk in its back office. Three months later this person is promoted to the firms sales desk to be trained in institutional sales. Under MSRB rules they are:

A) required to serve a 30-day apprenticeship and may not yet be promoted to sales training.

B) required to serve a 60-day apprenticeship and having fulfilled that time may be promoted to sales training.

C) required to have been in the position with the employing firm at least one year when previously employed in a clerical capacity only.

D) not required to serve an apprenticeship period and may be promoted for sales training.

Answer: D) not required to serve an apprenticeship period and may be promoted for sales training.

Application for registration as a municipal securities registered representative must be accompanied by all of the following personal information EXCEPT:

A) bank references.

B) employment record for the previous 10 years.

C) residences over the past 5 years.

D) date of birth.

Answer: A) bank references.

According to the MSRB rules, a registered representative can do all of the following EXCEPT:

A) sell municipal bonds.

B) trade municipal bonds.

C) train other registered representatives.

D) participate in underwriting municipal bonds.

Answer: C

A municipal finance professional eligible to vote in a municipality which frequently issues debt securities has made a contribution to the political campaign of one of the issuer's elected officials. More than which amount would disqualify the firm from engaging in certain municipal businesses with that issuer for 2 years?

A) 1000.

B) 5000.

C) 250.

D) 100.

Answer: C) 250.

Which of the following responsibilities did the MSRB receive through the Securities Acts Amendments of 1975?

Regulation of municipal issuers.

Establishment of recordkeeping requirements for municipal broker/dealers.

Enforcement of any municipal regulations it adopts.

Creation of regulations for participants in the municipal securities secondary market.

A) I and III.

B) I and IV.

C) II and III.

D) II and IV.

Answer: D) II and IV.

According to MSRB rules, may a municipal securities representative give $50 crystal vases to 10 of his favorite clients?

A) The representative is not allowed to give gifts to customers.

B) No, the aggregate amount exceeds the permissible annual limit.

C) Only with written permission from the MSRB.

D) Yes, he is permitted.

Answer: D) Yes, he is permitted.

MSRB rules for NYSE member firms are enforced by:

A) the MSRB.

B) the NYSE.

C) the SEC.

D) FINRA.

Answer: A

According to MSRB rules, a separately identifiable division of a bank engaging in the sale and /or underwriting of securities issued by state and local governments is acting as a(n):

A) broker's broker.

B) investment banker.

C) municipal securities dealer.

D) mutual fund.

Answer: C) municipal securities dealer.

Under MSRB rules, what is the maximum amount of business-related gratuities and gifts that a registered representative may give to one person per year?

A) 100.

B) 200.

C) 25.

D) 50.

Answer: A) 100.

Which of the following is NOT under governance of the MSRB?

Issuers of municipal fund securities.

Broker/dealers that sell municipal fund securities.

Issuers of municipal bonds.

Banks that sell municipal securities.

A) II and III.

B) II and IV.

C) I and III.

D) I and II.

Answer: C) I and III.

How may a municipal firm retail customer gain access to an MSRB rule book?

A) Only with the verbal permission of a registered branch manager (sales supervisor).

B) Upon request to the broker/dealer; no restrictions exist.

C) Only by writing the MSRB directly with a specific question involving an MSRB rule.

D) Only with the written permission of a principal.

Answer: B) Upon request to the broker/dealer; no restrictions exist.

A registered representative is attempting to close a large municipal bond sale, but the customer voices concern about a potential increase in interest rates. Which of the following actions are permitted by MSRB rules?

A) Offering to share in profits or losses resulting from the transaction.

B) Personally offering to buy the bonds back at a specified price and date.

C) Selling the customer a put or entering into a repurchase agreement.

D) Guaranteeing the customer against any loss.

Answer: C) Selling the customer a put or entering into a repurchase agreement.

The MSRB is authorized to adopt rules concerning all of the following EXCEPT the:

A) sale of new issues to related portfolios.

B) regulation of municipal securities advertising.

C) information to be provided by municipal issuers.

D) form and content of price quotations.

Answer: C) information to be provided by municipal issuers.

If a customer wants to place an order for a specific municipal bond and provides the bond's issuer, coupon, maturity date, and CU.S.IP number, but has not disclosed his financial objectives or tax status, the representative must:

A) refuse the order.

B) execute the order and mark it "unsolicited".

C) determine whether the transaction is suitable.

D) recommend a different bond of the same issuer with a higher rating.

Answer: B) execute the order and mark it "unsolicited".