Answer: The Correct Answer is B

Rationale: Accredited investors are individuals who earned more than $200,000/year for the last two years, or married couples who jointly earned more than $300,000/year for the last two years, or individuals (or married couples) who have a net worth greater than $1,000,000, excluding their primary residence. To qualify as an accredited investor on the basis of income, the individual or married couple must have exceeded the threshold for the past two years.

Answer: The Best Answer is A

Rationale: Prior to recommending any transaction to a retail customer, a dealer must exert “best efforts” to obtain information concerning the customer’s financial status, tax status, investment objectives, and any other information pertinent to making suitable recommendations on the customer’s behalf. This is generally referred to as suitability information, meaning the information that is necessary to be able to recommend suitable transactions to a particular client. Firms are not held to such strict suitability rules for institutional accounts, which are accounts belonging to institutional customers. If a dealer believes that an institutional customer is capable of independently evaluating risk and the customer regularly makes independent investment decisions, the dealer’s suitability requirements are fulfilled.

Answer: The Best Answer is A

Rationale: To find the equivalent taxable yield of a municipal bond, take the coupon yield of the municipal bond divided by (100 minus the investor's tax bracket.) In this example, .065 / (1.00-.25) = .0867 = 8.67%.