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Free Series 55 – Equity Trader Limited Representative Exam Exam Questions and Answers
Last updated: April 1, 2025
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Series 55 – Equity Trader Limited Representative Exam
#Question
A trader identifies a pattern of insider buying in a stock. What could this indicate?
A.
Distress within the company
B.
A plan to dilute shares
C.
An unstable market focus
D.
Confidence in future growth
Correct Answer:
D
Insider buying can often indicate that those within the company have confidence in its future prospects.
#Question
If a portfolio manager changes the allocation strategy significantly, what is the probable impact?
A.
Increased risk exposure
B.
More balanced risk management
C.
No impact
D.
Higher transaction costs
Correct Answer:
A
Changing allocation strategies can lead to increased risk exposure depending on the new strategy's nature.
#Question
What might indicate a stock is undervalued?
A.
Short-selling activity
B.
High P/E ratio
C.
Consecutive earnings increase
D.
Low P/B ratio
Correct Answer:
D
A low P/B ratio might indicate that the stock is undervalued compared to its book value.
#Question
During economic downturns, what type of asset is often sought after by investors?
A.
Treasury bonds
B.
Growth stocks
C.
Commodities
D.
Real estate
Correct Answer:
A
Treasury bonds are often sought during downturns as safe-haven assets, providing stability.
#Question
In spot trading, what is most crucial for traders?
A.
Predicting earnings
B.
Market regulations
C.
Global economic events
D.
Currency rate fluctuations
Correct Answer:
D
Spot trading involves immediate transactions based on the current market rates; hence currency fluctuations are key.
#Question
A trader is considering a stock that is about to go ex-dividend. What action should they take?
A.
Short sell
B.
Buy the stock before the ex-dividend
C.
Sell immediately
D.
Ignore the dividend
Correct Answer:
B
Buying before the ex-dividend date secures entitlement to the upcoming dividend payment.
#Question
If a trader implements a value investing strategy, what emphasis should they place on?
A.
Stock price momentum
B.
Current trends
C.
Fundamental analysis
D.
Market manipulation
Correct Answer:
C
Value investing emphasizes evaluating stocks based on their fundamentals rather than market trends.
Series 55 – Equity Trader Limited Representative Exam
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