What is the primary purpose of the Investment Company Act of 1940?

a) Regulate the trading of securities on stock exchanges

b) Promote fair and efficient markets

c) Provide investor protection through disclosure requirements

d) Regulate investment companies such as mutual funds

Which of the following is an example of a non-marketable security?

a) Treasury bill

b) Common stock

c) Corporate bond

d) Mutual fund share

What does the term "liquidity risk" refer to in the context of investing?

a) The risk of losing the entire investment

b) The risk of fluctuating market prices

c) The risk of not being able to sell an investment quickly without significant price impact

d) The risk of a company defaulting on its debt obligations

What is the purpose of a prospectus in the securities industry?

a) Provide financial advice to clients

b) Sell shares of stock to the public

c) Disclose information about an investment offering to potential investors

d) Clear and settle securities transactions

Which of the following is a characteristic of a Roth IRA?

a) Contributions are tax-deductible

b) Withdrawals in retirement are tax-free

c) There is no annual contribution limit

d) Contributions are made by the employer, not the employee

What is the primary purpose of the Financial Industry Regulatory Authority (FINRA)?

a) Regulate and oversee broker-dealers and their registered representatives

b) Issue new securities to the public

c) Provide investment advice to clients

d) Set monetary policy and maintain the stability of the financial system

Which of the following is an example of a tax-exempt bond?

a) Treasury bond

b) Corporate bond

c) Municipal bond

d) Agency bond