WorksheetsFCLP Phase I Mock Complete
Total questions: 179
Worksheet time: 3hrs 53mins
Name
Class
Date
1.
1. A group of corporations that has diversified business activities in varied industries, whereby the operators of such businesses are controlled and managed by a parent corporate entity:
a)
a. Related party
b)
b. Conglomerate
c)
c. Subsidiaries
d)
d. All of the above
2.
2. The amount paid by the stockholders in excess of the par value is called
a)
a. Retained earnings
b)
b. Capital stock
c)
c. Capital surplus
d)
d. Liabilities
3.
3. If Ana deposited P10,000.00 in a bank in a time deposit account at 4% interest in 90 days, how much will she earn?
a)
a. 107.50
b)
b. 100.00
c)
c. 400
d)
d. 92
4.
4. Who elects the BOD of a corporation
a)
a. Common Stockholder
b)
b. Preferred Stockholder
c)
c. Bond Holders
d)
d. Corporate Officers
5.
5. The following are qualified investor participants except:
a)
a. Banks
b)
b. Insurance Company
c)
c. Investment Company
d)
d. An entity with total assets of more than P1B
e)
e. An entity with total assets of more than P1.2B
6.
7. Consider two bonds, A and B. They are both issued at the same time by the same corporate firm. They both have the same maturity, seniority, and coupon. The only difference between the two bonds is that A is callable and B is not. Which of the following will most likely best describe the relationship between A and B.
a)
a. Bond A will have a lower yield than bond B
b)
b. Bond B will have a lower price than bond A
c)
c. Bond A will have a higher yield than bond B
d)
d. Bonds A and B will have the same yield
7.
8. Which of the following reflects the performance of UITFs or Mutual Funds?
a)
a. Par Value
b)
b. Stated Value
c)
c. Asset Value
d)
d. Net Asset Value
e)
e. None of the Above
8.
9. All of the following are characteristics of Treasury Notes Except:
a)
a. They have a maximum maturity in 10 yrs
b)
b. They are sold at auctions
c)
c. They are interest bearing securities
d)
d. They are sold at discount
9.
10. When one sells securities with an obligation to buy them back, these are?
a)
a. Federal Funds
b)
b. Repurchase Agreements
c)
c. Banker’s Acceptance
d)
d. Commercial Paper
e)
e. Subordinated Notes
10.
11. Which of the following is an important characteristics of T Bills
a)
a. Non-negotiable
b)
b. Illiquid
c)
c. Safety of Principal
d)
d. Lack of secondary market
e)
e. None of the above
11.
12. What type of bonds do not pay interest but have yields?
a)
a. Income bonds
b)
b. Corporate bonds
c)
c. Below Investment Grade Bonds
d)
d. Zero-Coupon Bonds
e)
e. Sovereign Bonds
12.
13. The interest received from the Philippine Government securities are subject to?
a)
a. Corporate Income Tax
b)
b. Individual Income Tax
c)
c. Documentary Science Tax
d)
d. Final Withholding Tax
e)
e. Capital Gains Tax
13.
14. Which of the following are features of the Philippine Treasury Bill:
a)
a. 91, 182, 364 day tenors
b)
b. Day count is 360
c)
c. Redemption at par
d)
d. Issued by a government owned corporations
e)
e. Only a, b and
14.
15. Which of the following is not a feature of FXTN
a)
a. Interest payment is quarterly
b)
b. Tenor is more than 1 yr
c)
c. Issued at face value
d)
d. Interest is calculated on 360/days
e)
e. None
15.
16. RTBs stand for __________________________
a)
a. Republic Treasury Bills
b)
b. Regular Treasury Bills
c)
c. Retail Treasury Bills
d)
d. Regular Treasury Bonds
e)
e. Retail Treasury Bonds
16.
17. Assuming all things equal, which among the following issues would offer the highest yield to an investor?
a)
a. Senior Debt
b)
b. Unsecured Bond
c)
c. Subordinated Bond
d)
d. Government Bond
e)
e. Commercial Paper
17.
18. Subordinated Debt may be also known as:
a)
a. Senior Debt
b)
b. Junior Debt
c)
c. Public Debt
d)
d. None of the above
18.
19. If an investor holds a bond to maturity, they will make a capital gain if:
a)
a. The bond is issued at par
b)
b. The bond is purchased below par
c)
c. The bond is issued above par
d)
d. The bond is purchased above par
19.
20. In a liquidation, investors get paid in which order?
a)
a. Preferred, bond, common
b)
b. Preferred, common, bond
c)
c. Bond, Common, Preferred
d)
d. Bond, Preferred, Common
20.
21. The time the debt must be repaid
a)
a. Term
b)
b. Tenor
c)
c. Maturity date
d)
d. Semi-annual basis
21.
22. A bond with a coupon rate of 10% and is sold a P1000. This bond has been sold at:
a)
a. Par
b)
b. Loss
c)
c. Discount
d)
d. Premium
22.
23. Alternative to borrowing for the short term by using government securities as collateral
a)
a. NCD
b)
b. Banker’s Acceptance
c)
c. Repurchase Agreements
d)
d. Commercial Paper
23.
24. Company A has declared a P 0.75 cash dividend. If you have 6000 shares, how much money will you receive?
a)
a. P6000
b)
b. P5000
c)
c. 4500
d)
d. 5500
24.
25. This is the most permanent form of business organization, where the investors may lose their entire investment but the personal assets are not at risk.
a)
a. Partnership
b)
b. Corporation
c)
c. Sole Proprietorship
d)
d. All of the above
25.
26. This is the maximum number of shares issued by a corporation multiplied by the par value
a)
a. Authorized capital
b)
b. Subscribed capital
c)
c. Paid-up capital
d)
d. Additional paid-in capital
26.
27. The following statement/s is/are true about common and preferred stocks: I. Owners of common stock have complete voting rights while preferred stockholders have only selected voting rights II. In the event of liquidation, owners of common stock are paid before preferred stockholders III. Common stockholders and preferred stockholders are entitled to the pre-emptive right IV. Preferred stockholders are senior to bondholders and common stockholder
a)
a. I only
b)
b. I and II
c)
c. III
d)
d. I, II, III
27.
28. Minority shareholders can gain representation in a BOD with this type of voting
a)
a. Statutory
b)
b. Cumulative
c)
c. Standard Voting
d)
d. All of the above
28.
29. This is referred to as the cut-off date in issuing dividends
a)
a. Declaration Date
b)
b. Record date
c)
c. Ex-dividend date
d)
d. Payment Date
29.
30. The following are debenture bonds except
a)
a. Convertible Debentures
b)
b. Subordinated Debentures
c)
c. Equipment Trust Certificates
d)
d. None of the Above
30.
31. 2% is equivalent to how many basis points?
a)
a. 0.2
b)
b. 2
c)
c. 20
d)
d. 200
31.
32. These are bonds issued by a corporation sponsored owned or controlled by the government
a)
a. Municipal bonds
b)
b. General obligation bonds
c)
c. Agency bonds
d)
d. Revenue bonds
32.
33. If a corporation is to be liquidated, at what value are his shares to be valued at?
a)
a. Par value
b)
b. Current market value
c)
c. Book Value
d)
d. Stated Value
33.
34. The following are market professionals except
a)
a. Associated Person
b)
b. Salesman
c)
c. Government Securities Eligible Dealer
d)
d. Investment House Underwriters
e)
e. None of the above
34.
35. A qualified individual buyer is a natural person with:
a)
a. Minimum annual gross income of Php 25,000,000 for at least 2 years prior to registration
b)
b. Total portfolio investment in SEC-registered securities of at least Php 100,000,000
c)
c. A personal net worth of not less than Php 300,000,000
d)
d. All of the above
35.
35. A qualified individual buyer is a natural person with:
a)
a. Minimum annual gross income of Php 25,000,000 for at least 2 years prior to registration
b)
b. Total portfolio investment in SEC-registered securities of at least Php 100,000,000
c)
c. A personal net worth of not less than Php 300,000,000
d)
d. All of the above
36.
36. A qualified institutional buyer is:
a)
a. A natural person with minimum annual gross income of at least P100M for at least 2 years prior to registration
b)
b. A juridical person with minimum annual gross income of at least P100M for at least 2 years prior to registration
c)
c. A natural person with total portfolio investment in SEC-registered securities of at least P60,000,000
d)
d. A juridical person with net worth of not less than Php 60,000,000
37.
37. A Person or entity engaged in buying and selling of Government Securities such as Treasury Bills, Treasury Notes and Treasury Bonds
a)
a. Investment House
b)
b. Investment Banks
c)
c. GSED
d)
d. Bangko Sentral ng Pilipinas
38.
38. A natural person hired to buy and sell securities on a salary or commission basis by a Broker Dealer is called a
a)
a. Associated Person
b)
b. Salesman
c)
c. Trader
d)
d. Broker
39.
39. Any person who engages on behalf of an issuer of securities in, among others, registering the transfer of such securities
a)
a. Exchange
b)
b. Clearing Agency
c)
c. Investment Company
d)
d. Transfer Agency
40.
40. Any person employed full time by the Broker Dealer whose responsibilities include internal supervision of other employees, agents, salesmen, officers, directors clerks and stockholders of such Broker Dealer for compliance with SRC and its IRR
a)
a. Salesman
b)
b. Associated Person
c)
c. Officer
d)
d. Clearing Agency
41.
41. Corporation which engages in Underwriting of Securities of another person, including securities of government or its instrumentalities
a)
a. Investment House
b)
b. Investment Company
c)
c. Investment Company Adviser
d)
d. Exchange
42.
42. The following statements are true except:
a)
a. The registration of a salesman or associated person shall not be automatically terminated upon the cessation of his affiliation with the broker or dealer.
b)
b. No person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered as such with the Commission
c)
c. No registered broker or dealers shall employ any salesman or any associated person who is not registered as such with the Commission.
d)
d. In the case of a broker or dealer, the applicant must satisfy a minimum RBCA requirement as prescribed by the Commission, and provide a bond or other security as the Commission may prescribe to secure compliance with the provisions of this Code.
43.
43. A person applying for registration as a Broker-Dealer under Sec. 28 shall indicate in SEC Form 28-BDA (Application for Registration as Broker-Dealer) the following except:
a)
a. Deal with Equity Securities, Fixed Income/Debt Securities, Proprietary Shares, Non-Proprietary Shares, Government Securities, Derivatives or Other Instruments
b)
b. Trade, directly/indirectly, in an Exchange, OTC or in Alternative Trading System
c)
c. Be Solely engaged in the business of a Broker-Dealer, unless otherwise authorized by the Commission to engage in another business
d)
d. If an Exchange Trading Participant, whether Clearing or Non-Clearing Trading Participant and if participant will engage in market making transactions
e)
e. None of the above
44.
44. What is the minimum capitalization requirement for Broker Dealers?
a)
a. Php 100,000,000
b)
b. PHp 25,000.000
c)
c. Php 60,000,000
d)
d. Php 50,000,000
45.
45. This is the minimum levels of capital that has to be maintained by firms which are licensed, or securing a Broker Dealer license, taking into consideration the firm size, complexity and business risk
a)
a. Risk Based Capital Adequacy Requirement Ratio
b)
b. Risk Management
c)
c. Risk Assessment
d)
d. None of the above
46.
46. Application for increase in authorized capital stock and for the registration of the securities must be filed with the SEC, within:
a)
a. forty five (45) days from the date of the approval by the stockholders
b)
b. forty five (45) days from the date of the declaration by the board of directors
c)
c. thirty (30) days from the date of the approval by the stockholders
d)
d. thirty (30) days from the date of the declaration by the board of directors
47.
48. The following statement about the requirements for qualified buyers are true except:
a)
a. The registration as qualified buyer shall be valid for 3 years if the qualifications provided are continuously complied with.
b)
b. Any application for renewal shall not be subject to new evaluation by the registrar and accompanied by updated information sheets.
c)
c. The registrar shall maintain a registry book of qualified buyers that shall be open for inspection by the Commission.
d)
d. None of the above
48.
47. The sanction on violation of any of the provision of the rules on declaration of stock dividends:
a)
a. Fine of no less than Php 200 and not more than Php 50,000
b)
b. Additional fine of not more than Php 500 for each week of continuing violation
c)
c. Suspension and revocation of the Certificate of Application or permit to offer securities
d)
d. All of the above
49.
49. Which rule by the SEC covers the registration of salesman and associated person?
a)
a. SEC Rule 28
b)
b. SRC Rule 4
c)
c. SEC Rule 4
d)
d. SRC Rule 28
50.
50. The type of trading participants who buys and sells for the account of others is called:
a)
a. Dealing Participant
b)
b. Broker Participant
c)
c. Trading Participant
d)
d. Qualified Investor
51.
51. The following are Qualified buyers Except:
a)
a. Banks
b)
b. Insurance Company
c)
c. Investment Company
d)
d. A juridical person with a net worth of less than Php 100,000,000
e)
e. a natural person with a minimum annual gross income of Php 25,000,000 for at least 2 years
52.
52. Who is the manager of a mutual fund?
a)
a. Management Company
b)
b. Custodian
c)
c. Investor
d)
d. Broker
53.
54. In how many days should a Broker Dealer notify the Commission about the discontinuation of employment of a salesman or associated person?
a)
a. No later than 5 days from the discontinuation of employment
b)
b. No later than 10 days from the discontinuation of employment
c)
c. No later than 30 days from the discontinuation of employment
d)
d. No later than 45 days from the discontinuation of employment
54.
55. For how many years should a Broker Dealer preserve all records required to be maintained pursuant to the Books and Records Rule from the date the Commission and/or the SRO has approved its operation to cease?
a)
a. Maximum of 20 years
b)
b. Minimum of 10 years
c)
c. Minimum of 5 years
d)
d. Maximum of 5 years
55.
A person that buy and sells securities for his own account
a)
a. associated person
b)
b. salesman
c)
c. dealer
d)
d. market maker / specialist
56.
The third market is also known as
a)
a. Exchange market
b)
b. Without broker intermediation
c)
c. OTC Trading
d)
d. Corporation offering
57.
What is a watered share?
I. Issued without consideration (bonus share)
II. Issued as fully paid when the corporation has received a lesser sum of money than its par or issued value (discount share)
III. Issued for a consideration other than actual cash such as property or services, the fair valuation of which is less than its par or issued value
IV. Issued as stock dividends when there are not sufficient retained earnings to justify it.
a)
a. I and II
b)
b. I, II and III
c)
c. I, II, IV
d)
d. All of the above
58.
Consideration for the issuance of stock may be any of the following:
I. Actual cash paid to the corporation
II. Property, tangible or intangible, actually received by the corporation
III. Lawyer who helped the corporation in its issuance of stock.
a)
a. I and II
b)
b. I and III
c)
c. II, III
d)
d. All of the above
59.
The following does not have any coupons.
I. 10-Year Bond
II. Treasury Bills
III. 5-Year T-Notes
IV. Zero Coupon Bonds
V. 30-Year Bonds
a)
a. II only
b)
b. I, II, V
c)
c. II, IV
d)
d. II and III
60.
Which are true about rights offering?
I. Offering price of new shares are below the market price of their existing shares.
II. Offering price of new shares are above the market price of their existing shares
III. Through rights offering, existing shareholders have the choice of maintaining proportionate investment in the company
IV. Companies can use rights to dilute the holdings of existing owners
a)
a. II, III, & IV
b)
b. I, III, & IV
c)
c. III
d)
d. I only
61.
This allows the shareholders to maintain the proportionate shares of ownership.
a)
a. pre-emptive rights
b)
b. price right
c)
c. protective right
d)
d. appraisal right
62.
How do investors realize capital gains?
a)
a. buy a bond at premium, sell it at par
b)
b. buy a bond at a discount, sell it at a higher discount
c)
c. buy a bond at par, sell it at a discount
d)
d. buy a bond at premium, sell it at a higher premium
63.
The first pay date on which the buyer of a stock will not receive the declared dividend is on which date?
a)
a. Payment
b)
b. Declaration
c)
c. Ex-dividend
d)
d. Record
64.
________________ is the market for long-term debt instruments while ____________ is the market for short-term debt instruments.
a)
a. Capital Market, Money Market
b)
b. Money Market, Capital Market
c)
c. Primary Market, Secondary Market
d)
d. Capital Market, Stock Market
65.
All of the following are common attributes for preferred stocks and bonds EXCEPT
a)
a. Periodic payments to owners
b)
b. Can be callable
c)
c. Fixed maturity date
d)
d. Fixed payment rate
66.
Stocks maybe the following except:
a)
a. Preferred
b)
b. Common
c)
c. Treasury
d)
d. Preemptive
67.
In bookkeeping purposes, the outstanding shares of stock of a corporation are entered into its books at its
a)
a. Book Value
b)
b. Market Value
c)
c. Net Asset Value
d)
d. PAR Value
68.
Which of the following statement/s is/are false?
a)
a. Preferred dividends must be paid in full before any dividend distribution is paid to common stock.
b)
b. Preferred shareholders may be given dividends with the approval by the Board of Directors.
c)
c. Holders of the preferred stock are entitled to receive dividends, which is a fixed rate of its market value
d)
d. None of the above
69.
A bond is said to be secured if
a)
a. it is backed by specifically identified assets of the corporation as collateral
b)
b. it is rated AAA rated by PhilRatings
c)
c. it is backed by the reputation, credit record, and earning power of a corporation
d)
d. all of the above
70.
PAR value refers to
a)
a. Arbitrary value given to stock at time of issuance and is used to record the value of shares on the books of the corporations
b)
b. Price quoted in exchange for shares traded that there at
c)
c. Tangible Net Asset Value per share
d)
d. None of the above
71.
The settlement date of a bond is
a)
a. date when the client will pay for the cost of bond plus accruals
b)
b. date when the client will receive the coupon
c)
c. date when the client will receive the maturity plus coupons, if any
d)
d. date when the client bought the bond
72.
If a corporation gives shares of stock of another corporation owned by the company as a form of dividend to its shareholders then that type of dividend is called
a)
a. transferred dividend
b)
b. property dividend
c)
c. stock dividend
d)
d. cash dividend
73.
This gives the buyer the right, but not the obligation to buy or sell, a share at a predetermined price.
a)
a. Warrants
b)
b. Options
c)
c. Proxy
d)
d. Exercise
74.
The minimum paid-up capital of a corporation is
a)
a. P5,000
b)
b. P50,000
c)
c. P500,000
d)
d. P5,000,000
75.
Securities not required to be registered with SEC.
a)
a. Stocks
b)
b. Exempt Securities
c)
c. Commercial Papers
d)
d. Bonds
76.
These are shares that were bought back by the issuing corporation and are commonly called as reacquired shares.
a)
a. Common Stock
b)
b. Treasury Stock
c)
c. Preferred Stock
d)
d. Subscribed Stock
77.
Corporations can raise capital by:
a)
a. By retaining profits
b)
b. By borrowing
c)
c. By issuing shares of stock
d)
d. All of the above
78.
What are the features of TBills?
I. zero coupon
II. 360 day count
III. issued at par
IV. 364 day count
a)
a. I, II
b)
b. I, III
c)
c. I, II, III
d)
d. All of the above
79.
Price at which someone is willing to pay for each share.
a)
a. book value
b)
b. stated value
c)
c. par value
d)
d. market value
80.
The following are the four dates to remember when a dividend is declared. Arrange them in proper sequence.
I. Payment Date
II. Ex-Dividend Date
III. Declaration Date
IV. Record Date
a)
a. IV, III, II, I
b)
b. III, IV, II, I
c)
c. III, II, IV, I
d)
d. II, I, IV, III
81.
Type of voting wherein the stockholder may spread his total votes among the number of positions to be filled in any manner.
a)
a. cumulative voting
b)
b. statutory voting
c)
c. non-cumulative voting
d)
d. convertible voting
82.
What type of market is it if the proceeds from the sale of securities go directly to the issuing corporation?
a)
a. Primary
b)
b. Over-The-Counter
c)
c. Secondary
d)
d. Capitalization
83.
Which of the following is true concerning treasury stock?
a)
a. It receives dividends
b)
b. Cannot be reissued to the public
c)
c. It is an outstanding stock
d)
d. It has no voting rights
84.
A written authorization allowing another person to vote in the place of a shareholder is a
a)
a. Warrant
b)
b. Right
c)
c. Debenture
d)
d. Proxy
85.
The Corporation Code of the Philippines provides at least 25% of a corporation's ______ must be paid up.
a)
a. Paid-up capital
b)
b. Additional paid-in capital
c)
c. Authorized capital
d)
d. Subscribed capital
86.
The maximum number of shares a corporation may issue multiplied by the par value of each share.
a)
a. Paid-in capital
b)
b. Subscribed capital
c)
c. Authorized capital
d)
d. Additional paid-in capital
87.
CDE Incorporated has 30,000,000 shares of common stock authorized, 21,000,000 shares have been issued and there are 6,000,000 shares of treasury stock. How many shares are outstanding?
a)
a. 15,000,000
b)
b. 9,000,000
c)
c. 24,000,000
d)
d. 3,000,000
88.
What are the characteristics of an over-the-counter market?
a)
a. centralized & negotiated basis
b)
b. double-auction and centralized
c)
c. double-auction and decentralized
d)
d. negotiated basis and decentralized
89.
What are the characteristics of an exchange market?
a)
a. Negotiated basis and decentralized
b)
b. Decentralized and double auction
c)
c. Double auction and centralized
d)
d. Negotiated basis and centralized
90.
If ABC Company declares cash dividend which among its shareholders would be entitled to receive dividends?
a)
a. Those who bought the shares before the ex-dividend date
b)
b. Those who bought shares after the ex-dividend date
c)
c. Those who bought the shares on or before the ex-dividend date
d)
d. Those who bought the shares on or after the ex-dividend date
91.
Which of the following is the correct arrangement according to seniority in liquidation?
a)
a. Common stock, preferred stock, mortgage bond, debenture
b)
b. Mortgage bond, debenture, preferred stock, common stock
c)
c. Preferred stock, mortgage bond, debenture, common stock
d)
d. Debenture, mortgage bond, preferred stock, common stock
92.
The company pays a quarterly coupon of 4 and sells for 80. What is the current yield?
a)
a. 0.20
b)
b. 0.40
c)
c. 0.50
d)
d. 0.1
93.
When referring to dividends, the term cumulative means?
a)
a. Before fixed dividend is paid, all ordinary shares must receive dividends
b)
b. Dividends of previous years in arrears are payable before other dividends
c)
c. A percentage of profits must be paid after all dividends are paid
d)
d. The nominal value of the issue capital which is used on the computation of dividends
94.
Who are qualified buyers of securities according to the Securities and Exchange Commission (SEC)?
I. Bank
II. Registered Investment House
III. Insurance Company
IV. Pension fund or retirement plan maintained by the Government of the Philippines or any political subdivision thereof or managed by a bank or other persons authorized by the Bangko Sentral to engage in trust functions<br />V. Investment Company <br />VI. Other persons as the SEC may by rule determine as qualified buyers<br />
a)
a. V only
b)
b. I, II, III, IV, V, and VI
c)
c. I, II, III, and V
d)
d. I, II, III, IV, and, V
95.
Which of the following are considered money market instruments?<br /><br />I. Convertible Preferred Stocks<br />II. Treasury Notes Maturing in less than a year<br />III. Bankers Acceptance<br />IV. Repurchase Agreement<br />
a)
a. II, III, and IV only
b)
b. II and III only
c)
c. I, III, and IV only
d)
d. III and IV only
96.
All of the following pay dividends except:
a)
a. Debentures
b)
b. Cumulative preferred stocks
c)
c. Common Shares
d)
d. Participating preferred shares
97.
Type of offering wherein the proceeds from the sale of securities go to the existing shareholders:<br /><br />I. Primary Offering<br />II. Initial Public Offering<br />III. Follow-on offering<br />IV. Secondary Offering<br />
a)
a. I only
b)
b. II and III
c)
c. I and II
d)
d. IV only
98.
The term more commonly used to describe difference in yield is:
a)
a. percentage difference
b)
b. comparative yield
c)
c. basis points
d)
d. none of the above
99.
The following statements are true except:<br /><br />I. In single proprietorship and partnership, the owner's private assets are at risk<br />II. In single proprietorship, the owner's private assets are at risk<br />III. In corporation, the owner's private assets are not at risk<br />IV. In partnership and corporation, the owner's private assets are not at risk<br />
a)
a. I, II and IV
b)
b. IV only
c)
c. II and III
d)
d. I and IV
100.
Treasury bills have tenors of:<br /><br />I. 182 days<br />II. 31 days<br />III. 91 days<br />IV. 364 days<br />
a)
a. I, II, and III
b)
b. I, III, and IV
c)
c. II, III, and IV
d)
d. I, II, and IV
101.
The following statements about offerings are true except:<br /><br />I. The proceeds from the sale of securities in primary offering goes to the issuing corporation<br />II. Secondary offering is the second time the corporation is offering its shares to public<br />III. No new funds are injected in the corporation in the case of secondary offering<br />IV. The proceeds from the sale of securities in secondary offering goes to the existing shareholders<br />
a)
a. Statements I, II, and III
b)
b. Statements III and IV
c)
c. Statement IV only
d)
d. Statement II only
102.
Which of the following is true concerning treasury stock?
a)
a. It receives dividends
b)
b. Cannot be reissued to the public
c)
c. It is outstanding stock
d)
d. It has no voting rights
103.
The Corporation Code of the Philippines provides at least 25% of a corporation's ______ must be paid up.
a)
a. Paid-up capital
b)
b. Additional paid-in capital
c)
c. Authorized capital
d)
d. Subscribed capital
104.
The maximum number of shares a corporation may issue multiplied by the par value of each share
a)
a. Paid-in capital
b)
b. Subscribed capital
c)
c. Authorized capital
d)
d. Additional paid-in capital
105.
The third market is also known as<br /><br />
a)
a. Exchange market
b)
b. Without broker intermediation
c)
c. OTC Trading
d)
d. Corporation offering
106.
A doctrine that says that a corporation is a mere alter ego or business conduit of a person.<br />
a)
a. Doctrine of Ultra Vires
b)
b. Intra Vires Act
c)
c. Doctrine of Legal Entity of the Separate Personality of the Corporation
d)
d. Doctrine of Piercing the Veil of Corporate Entity
107.
A public company is defined as <br /><br />I. Sold a class of its own equity securities<br />II. A class of equity securities listed on an Exchange<br />III. With assets in excess of P50M and has 200 or more shareholders holding at least 100 shares<br />
a)
a. I and II
b)
b. I,III, III
c)
c. II and III
d)
d. All of the above
108.
Mr. Abueg owns 100,000 shares of XYZ Corporation whose authorized capital currently stands at 1,000,000 shares. XYZ Corporation will be issuing additional 1,000,000 shares to fund its expansion and Mr. Abueg has no plans at all to subscribe to the additional rights offering. What will happen to Mr. Abueg's shareholding in the company if he does not avail of the additional rights offering?
a)
a. Mr. Abueg's shareholding will increase
b)
b. Mr. Abueg's shareholding will be diluted
c)
c. The additional stock offering will be diluted
d)
d. None of the above
109.
A corporation shall exist for a period not exceeding ________ unless sooner dissolved or unless said period is extended.
a)
a. Fifty (50) years from the date of incorporation
b)
b. Fifty (50) years from the date of issuance of the articles of incorporation
c)
c. Fifty (50) years from the date of execution
d)
d. fifty (50) years from the date of operation
110.
Which of the following has the highest claim of assets in a corporation?
a)
a. Common Shares
b)
b. Warrants
c)
c. Options
d)
d. Rights
111.
Which of the following are corporate entities not allowed to issue no-par value shares?<br />I. Banks<br />II. Transfer Agencies<br />III. Trust companies<br />IV. Insurance companies<br />V. Public utilities<br />VI. Building and Loan Associations<br />VII. Clearing Agencies<br />
a)
a. I, III, IV, V, VI
b)
b. I, II, III, IV, V, VI
c)
c. I, II, III, IV, V, VI, VII
d)
d. I, III, IV, V, VI, VII
112.
A ___________ will result into an increase of number of shares and lower prices of shares
a)
a. Stock Split
b)
b. Reverse Stock Split
c)
c. Stock Conversion
d)
d. None of the above
113.
This type of dividends entitle the holder of the stock to payment of dividends in arrears and participate with the holders of common stock in the remaining profits
a)
a. Cumulative
b)
b. Participating
c)
c. Cumulative-Participating
d)
d. Guarantee
114.
A corporation is a Public Company if <br />I. A corporation with a class of equity shares listed in an Exchange<br />II. A corporation with assets in excess of P50,000,000 and having 200 or more holders, at least 200 of which are holding at least 100 shares<br />III. A corporation with assets in excess of P50,000,000 and having 200 or more holders, at least 200 of which are holding at least 1 share<br />
a)
a. I only
b)
b. I, II only
c)
c. I, III only
d)
d. I, II, III
115.
The stockholders are not personally liable for corporate obligations and cannot be held liable to third persons who have claims against the corporation beyond their agreed subscriptions/contributions to the corporate capital.
a)
a. Doctrine of Piercing of the Corporate Veil
b)
b. Limited Liability Company
c)
c. Doctrine of Corporate Opportunity
d)
d. De Jure Corporation
116.
The articles of incorporation of a Close Corporation must provide that:<br />I. All the corporation’s issued stocks shall be held by not exceeding 20 specified person (except of treasury shares)<br />II. All the corporation’s issued stocks shall be held by at least 19 specified person (except of treasury shares)<br />III. All of the issued stocks shall be subject to one or more specified restrictions on transfer permitted by the Corporation Code<br />IV. The corporation shall not list in any stock exchange or make any public offering of any of all classes of its stocks. <br />V. The corporation shall list in any stock exchange or make any public offering of any of all classes of its stocks. <br />
a)
a. I, II, III
b)
b. I, III, IV
c)
c. I, III, V
d)
d. II, III, V
117.
A corporation shall be deemed not a close corporation when _______ of its voting stocks or voting rights is owned or controlled by another corporation which is not a close corporation.
a)
a. More than 50%
b)
b. At least 2/3
c)
c. At least 1/3
d)
d. All of the above
118.
Which of the following cannot be amended in the Articles of Incorporation?
a)
a. Incorporators
b)
b. Term for which the corporation is to exist (years)
c)
c. Name of the Corporation
d)
d. Specific purpose / purposes of the incorporation
119.
The ___________________ is enacted by a corporation to regulate, govern and control its own actions, affairs and concerns and its stockholders or members and directors and officers
a)
a. Articles of Incorporation
b)
b. By-Laws
c)
c. Certificate of Registration
d)
d. Code of Corporate Governance
120.
A corporation must adopt ________________
a)
a. By-Laws within 1 month after receipt of the official notice of the issuance of the certificate of incorporation by the SEC
b)
b. By-Laws within 1 year after receipt of the official notice of the issuance of the certificate of incorporation by the SEC
c)
c. By-Laws within 30 days after receipt of the official notice of the issuance of the certificate of registration by the SEC
d)
d. By-Laws within 6 months after receipt of the official notice of the issuance of the certificate of incorporation by the SEC
121.
This doctrine disregards the principle on separate identity of a corporation from its stockholders when it is used to defeat public convenience, justify wrong, protect or cover fraud or defend crime or work or injustice.
a)
a. Doctrine of Corporate Entity
b)
b. Doctrine of Piercing of Veil of Corporate Fiction
c)
c. Ultra Vires Acts of a Corporation
d)
d. Doctrine of Corporate Opportunity
122.
Acts acted by a Corporation beyond its legal powers or authority conferred by the Code or by its articles of incorporation
a)
a. Ultra Vires
b)
b. Intra Vires
c)
c. Supra Vires
d)
d. Extra Vires
123.
This refers to the total amount of shares which a corporation is allowed to issue if the shares have a par value
a)
a. Authorized Stock
b)
b. Authorized Capital Stock
c)
c. Capital Structure
d)
d. Capital Stock
124.
Which of the following will not be considered for the issuance of shares?
a)
a. Payment of cash or Real Estate
b)
b. Legal services provided by a lawyer
c)
c. Previously incurred indebtedness of the corporation
d)
d. Services to be rendered in the future
125.
The articles of incorporation of ABC Corporation provide for the issuance of 100,000 shares without par value and an issued price per share of P10.00. At the time of incorporation, the subscription and paid-up capital should not be less than:
a)
a. P250,000.00 and P62,500.00 respectively
b)
b. P1,000,000.00 and P250,000.00, respectively
c)
c. P250,000.00 and P125,000.00, respectively
d)
d. P250,000.00 and P250,000.00, respectively
126.
Which of the following will happen if the company declared a 10% stock dividend and a shareholder has 100 shares initially bought at Php 60/share.
a)
a. The shareholder will have 110 shares priced at Php 60/share
b)
b. The shareholder will have 110 shares priced at Php 54/share
c)
c. The shareholder will have 100 shares priced at Php 66/share
d)
d. The shareholder will have 100 shares priced at Php 54/share
127.
A company announces a stock conversion of 6:1 and the current price of common stock is Php 12. How much is needed to convert a preferred share to a common stock?
a)
a. Php 2
b)
b. Php 72
c)
c. Php 12
d)
d. Php 0.5
128.
An investor buys a bond that has a coupon scheduled on April 30 and September 30 and will mature on September 30. What will the investor receive at the end of the maturity?
a)
Face Value of the bond and the September 30 coupon
b)
Face Value of the bond and the April 30 and September 30 coupon
c)
Premium Price of the bond
d)
Face value of the bond
129.
An investor buys a bond with Face Value of Php 500,000 has a coupon of 4% p.a. scheduled on April 30 and September 30 and will mature on September 30. What will the investor receive at the end of the maturity?
a)
a. Php 520,000
b)
b. Php 510,000
c)
c. Php 500,000
d)
d. Php 480,000
130.
Which of the following statements are not true about no par value stocks
a)
a. Issued price should not be less than Php 5
b)
b. The paid-up capital requirement of the par value stocks is equal to its subscribed capital requirement
c)
c. The company has no authorized capital stock but only authorized number of shares it can issue
d)
d. The company has no capital stock
131.
The __________ takes into account the current market price of the bond in the measurement in the yield of return on investment.
a)
a. yield to maturity
b)
b. basis points
c)
c. current yield
d)
d. nominal yield
132.
Which of the following can be performed by a salesman?
a)
Disclose non-public information
b)
Disclose company information upon request
c)
Transact client's money in advance prior to client's instruction
d)
All of the above
133.
Non-voting shares can vote in the following situations except:
a)
Merger and consolidation
b)
Increase in authorized capital stock
c)
Determination of remuneration of Board of Directors
d)
None of the above
134.
Juridical personality is granted upon issuance of:
a)
By-laws
b)
Articles of Incorporation
c)
Certificate of Incorporation
d)
Shares of stock
135.
If a company wants to retire its Treasury Shares, it should
a)
Increase capital stock
b)
Issue new shares
c)
Release retained earnings
d)
Reissue the Treasury Shares
136.
A juridical person can be a buyer if:<br />I. It has a gross income of at least PHP 100 million<br />II. It has a total portfolio investments of at least PHP 60 million in securities registered with the SEC or financial instruments issued by the government.
a)
Statement I is true, statement II is false
b)
Statement I is false, statement II is true
c)
Both statements are true
d)
Both statements are false
137.
Which of the following provisions in the Article of Incorporation cannot be subject to amendments?
a)
Name of corporation
b)
Name of incorporators
c)
Terms of existence
d)
Primary purpose
138.
In bookkeeping purposes, the outstanding shares of stock of a corporation are entered into its books at:
a)
Book Value
b)
Market Value
c)
Net Asset Value
d)
Par Value
139.
If Maricel does not invest in cyclical industries, she still might buy stocks in a company that produces:
a)
Minivans
b)
Refrigerator
c)
Bricks and Stucco
d)
Antihistamine or allergy medicines
140.
When a bond is “selling at premium”, it means:
a)
The bond is better quality than other issues
b)
The current yield is more than the yield of maturity
c)
The price of the bond is above its fair value
d)
The rating of the bond will be upgraded
141.
All of the following pay dividends, EXCEPT:
a)
Debentures
b)
Cumulative preferred stocks
c)
Common shares
d)
Participating preferred shares
142.
Which is the correct ranking of securities according to tenor (from shortest to longest)?
a)
Treasury Notes, Treasury Bonds, Treasury Bills
b)
Treasury Bills, Treasury Notes, Treasury Bonds
c)
Treasury Bonds, Treasury Bills, Treasury Notes
d)
Treasury Bills, Treasury Bonds, Treasury Notes
143.
Which are true about rights offering?<br />I. Offering price of new shares are below the market price of their existing shares<br />II. Offering price of new shares are above the market price of their existing shares<br />III. Through rights offerings, existing shareholders have the choice of maintaining proportionate investment in the company<br />IV. Companies can use rights to dilute the holdings of existing owners.<br />
a)
II, III & IV
b)
I, III & IV
c)
III
d)
I
144.
A bond has an 11% coupon. The bond has a current market price of PHP1,050.00. The current yield is:
a)
0.1095
b)
0.1048
c)
0.1047
d)
None of the above
145.
Which of the following is the correct arrangement according to seniority in liquidation?
a)
Common stock, preferred stock, mortgage bond, debenture
b)
Mortgage bond, debenture, preferred stock, common stock
c)
Preferred stock, mortgage bond, debenture, common stock
d)
Debenture, mortgage bond, preferred stock, common stock
146.
Which of the following depicts a normal yield curve:
a)
30 days (3.50%), 90 days (4%), 180 days (4.50%), 360 days (5%), 2 yrs (6%)
b)
30 days (3%), 90 days (4%), 1 yr (2%), 2 yr (4%), 3 yr (5%)
c)
30 days (3%), 60 days (7%), 90 days (4%), 2 yr (4%), 3 yr (3%)
d)
30 days (7.50%), 40 days (6%), 1 yr (5%), 2 yr (3.50%), 1st month (2%)
147.
A foreigner sells his USD and purchases a Peso Treasury Bill. What are the risks involved?<br />I. Market Risk<br />II. Sovereign Risk<br />III. Price Risk<br />IV. Liquidity Risk
a)
I and II
b)
I and III
c)
I, II and III
d)
All of the above
148.
A written authorization allowing another person to vote in the place of a shareholder is:
a)
Warrant
b)
Right
c)
Debenture
d)
Proxy
149.
To raise additional funds to finance its operations, a company may:
a)
Issue equity securities
b)
Issue debt securities
c)
Borrow from banks and lending institutions
d)
All of the above
150.
Which of the following is the correct arrangement when declaring dividends?
a)
Ex-dividend date, Declaration date, Record date, Payment date
b)
Declaration date, Record date, Ex-dividend date, Payment date
c)
Declaration date, Ex-dividend date, Record date, Payment date
d)
Record date, Ex-dividend date, Declaration date, Payment date
151.
If a corporation gives shares of stock of another corporation owned by the company as a form of dividend to its stockholders, then the type of dividend is called:
a)
Transferred dividend
b)
Property dividend
c)
Stock dividend
d)
Cash dividend
152.
This type of voting affords minority shareholders their best opportunity for gaining representation on the Board of Directors:
a)
Statutory Voting
b)
General Voting
c)
Cumulative Voting
d)
None of the above
153.
How much interest will Maya receive if she invests PHP 10,000.00 in a time deposit with a Philippine Bank at 4% for 90 days?
a)
PHP 92.50
b)
PHP 100.00
c)
PHP 107.50
d)
PHP 400.00
154.
Which of the following refers to an act or contract which is beyond the power of a corporation can lawfully exercise?
a)
Ultra Vires act
b)
Intra Vires act
c)
Illegal act
d)
Immoral act
155.
The sale of securities to the following are considered exempt transactions EXCEPT:
a)
Bank
b)
Registered Investment House
c)
Insurance Company
d)
None of the above
156.
What will you receive at maturity date of a bond if it pays interest on June 30, and also matures on June 30?
a)
Principal
b)
Interest
c)
Principal and Interest
d)
None of the above
157.
This refers to the right of the issuer to retire the issue prior to the stated maturity date.
a)
Appraisal Right
b)
Call Feature
c)
Put Feature
d)
Right of First Refusal
158.
Which of the following instruments invested in by an individual are free and clear of withholding tax?
a)
Commercial paper
b)
7-year long term negotiable CDs
c)
4-year corporate bonds
d)
Bank Tier 2
159.
This is a type of order validity where a client places an order with the intention of having the order matched at its entirety or not at all.
a)
Fill-and-Kill
b)
Fill-or-Kill
c)
Fish-and-Kill
d)
Fish-or-Kill
160.
What is a watered stock?
a)
Cash paid is less than par value
b)
Property or services exchanged is less than par value
c)
No consideration exchanged for the stock
d)
All of the above
161.
Who should withhold and when should the withholding tax be withheld for government securities issued in the Philippines?
a)
The investor will repay/remit tax to the government upon receipt of the coupon
b)
Dealer or broker will withhold tax at each coupon interest payment
c)
The issuer will withhold tax at each coupon payment date
d)
The broker or dealer will withhold tax on maturity of these
162.
A call feature enables an issuer to pay off bonds:
a)
Upon majority of votes of the bondholders
b)
At an amount less than stated par value
c)
After the stated maturity
d)
Prior to the scheduled maturity
163.
Rodel bought a 3-year bond with face value of 1,000,000 for 975,000. The coupon of the bond is payable on April 30 and September 30 each year. The maturity of the bond is September 30. What will he receive at the maturity of the bond?
a)
The face value of 1,000,000
b)
His principal of 975,000
c)
Principal and face value
d)
Face value and last coupon
164.
CDE Incorporated has 30,000,000 shares of common stock authorized, 21,000,000 shares have been issued and there are 6,000,000 shares of treasury stock. How many shares are outstanding?
a)
15000000
b)
9000000
c)
24000000
d)
3000000
165.
A stock split refers to a corporation action that increases the number of shares in a company. In effect, the share in par/price _______.
a)
Is maintained
b)
Decreases
c)
Increases
d)
None of the above
166.
Bonds rated “CC” or below are called?
a)
Trash Bonds
b)
Junk Bonds
c)
Investment Grade Bonds
d)
Medium Grade Bonds
167.
If a convertible preferred stock has a conversation ratio of 3, what should be its market price to be at parity with the common stock which is trading at PHP 15.00?
a)
PHP 18.00
b)
PHP 45.00
c)
PHP 5.00
d)
PHP 12.00
168.
The following are acceptable considerations for the issuance of shares except:
a)
Actual cash paid in corporation
b)
Amounts transferred from unrestricted retained earnings to a capital stock
c)
Service to be performed by a lawyer on the proposed increase of capital stock of corporation
d)
None of the above
169.
If a client buys an FXTN on a Friday, when is the settlement?
a)
Monday
b)
Tuesday
c)
Wednesday
d)
Thursday
170.
Which of the following are true?<br />I. An investor can opt to be a non-qualified investor in the OTC<br />II. A qualified investor may deal in the OTC<br />III. A non-qualified investor can only deal in the OTC through a broker<br />IV. A non-qualified investor may deal in the OTC by participating in a non-directional trust account
a)
I and II
b)
II and III
c)
I, II and III
d)
All of the above
171.
A juridical person can be a buyer if:<br />I. It has a gross income of at least PHP 100,000,000<br />II. It has a total portfolio investment of at least PHP 60,000,000 in securities registered with the SEC or financial instruments issued by the government
a)
Statement I is true, statement II is false
b)
Statement I is false, statement II is true
c)
Both statements are true
d)
Both statements are false
172.
Helps companies raise funds, gives financial advice to help the issuer and also assists in marketing the securities to be issued:
a)
Broker
b)
Investment Company
c)
Investment Banker
d)
Clearing Agency
173.
All of the following are common attributes for preferred stock and bonds EXCEPT:
a)
Periodic payments to owners
b)
Can be callable
c)
Fixed maturity date
d)
Fixed payment date
174.
Consider two bonds, A and B. They are both issued at the same time by the same corporate firm. They both have the same maturity, seniority and coupon. The only difference between the two bonds is that A is callable and B is not. Which of the following best describes the relationship between A and B?
a)
Bond A will have a lower yield than bond B
b)
Bond B will have a lower yield than bond A
c)
Bond A will have a higher yield than bond B
d)
Both A and B will have the same yields
175.
According to the Corporation Code of the Philippines, ________ is one where a corporation absorbs the other and remains in existence while others are dissolved.
a)
Acquisition
b)
Consolidation
c)
Liquidation
d)
Merger
176.
How many months interest are paid with the first coupon for a bond issued January 1, 2007 and first coupon April 1, 2007?
a)
1 month
b)
2 months
c)
3 months
d)
6 months
177.
In which of the following can a stockholder dissent, demand or withdraw his shares anytime?
a)
In case of amendment
b)
In case of sale
c)
In case of merger and consolidation
d)
All of the above
178.
Juan took his CIS exam license on January 5, 2010. He was a licensed salesman from 2010-2013. From 2013 to 2015, he was living in the US. He went back to the Philippines the next year and went to SEC to ask for the status of his license. What will SEC ask him to do?
a)
SEC will request for proof that he took the exam on 2010
b)
SEC will request for proof that he took the exam on 2016
c)
SEC will renew his license provided that he pays a fee
d)
SEC will not renew his license anymore
179.
Which type of share will be prioritized upon liquidation?
a)
Treasury
b)
Common
c)
Outstanding
d)
Preferred
100 %