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Correct Answer: A

Explanation: Exco Resources’ new bond issue is a primary market transaction. The primary market refers to the market for new issues. The other three scenarios describe transactions in securities that are already being traded and are secondary market transactions.

Correct Answer: C

Explanation: Only Selections I and III are accurate statements regarding Regulation D. Regulation D enables smaller firms to raise capital more quickly and more cheaply, but it also restricts the resale of the securities being sold in a Regulation D offering. It does not exempt the issuing firm from all disclosure requirements, even if the issue is being sold to only a single investor. The disclosure requirements are minimal with a Regulation D offering, however.

Correct Answer: B

Explanation: Mutual fund shares are bought and sold through the fund itself. The shares will sell for at least net asset value, unlike shares of a closed-end investment company wherein prices are set by supply and demand forces. Mutual funds are open-end investment companies and have no fixed number of shares.

Correct Answer: D

Explanation: After passing the Series 6 and becoming a registered representative, you will be able to execute transactions in mutual funds and variable contracts only. A passing grade on the Series 6 qualifies you to be registered as a “limited representative.”

Correct Answer: D

Explanation: Since the MaxCharge fund has a 5% front-end load and a 12b -1 fee that is 0.25% of its average net assets, any rear-end load, it may have, is limited to 3.25%. The maximum sales charge that is allowed is 8.5%, and this includes the front-end load, rear-end load, and 12b-1 fee. Since MaxCharge has a front-end load and a 12b-1 fee that totals 5.25%, its rear-end load is limited to 8.5% - 5.25% = 3.25%.