Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Which of the following would be considered an “issuer” transaction?
  1. Jacob calls his broker and places an order to purchase 100 shares of Hasbro, Inc. on the open market.
  2. Maria purchases 500 shares of Dodge and Cox’s International Fund, a mutual fund investing in foreign securities.
  3. Kim sells an AT&T bond she holds that still has three years remaining to maturity.
  4. None of the above is an “issuer” transaction.
Explanation
Answer: B - When Maria purchases shares of Dodge and Cox’s International Fund, it is an “issuer” transaction. Shares of mutual funds are bought and sold through the fund itself, so the money she pays for the shares is received by Dodge and Cox, the issuer of the shares. Jacob’s purchase of Hasbro stock and Kim’s sale of her AT&T bond are non-issuer transactions. Neither Hasbro nor AT&T receive the proceeds from these transactions. In Jacob’s case, another investor receives the cash; and in Kim’s cash, she receives the cash.
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