Series 52 Exam Prep Free practice test →

Free Series 52 Practice Questions

10 free, exam-style Municipal Securities Representative Examination (Series 52) practice questions with answers and explanations. No signup required. Work through them below, then take the full free Series 52 practice test to study every exam domain.

These 10 free Series 52 questions are organized by exam domain, so you can see how each part of the Municipal Securities Representative Examination blueprint is tested. Reveal the answer and explanation under each question.

Domain 1: Municipal Securities 60% of exam

Question 1

A municipal water authority has issued revenue bonds under a net revenue pledge. Gross revenues for the year total $12 million, and operations and maintenance expenses are $4 million. Under the flow of funds, which obligation is satisfied FIRST from the remaining $8 million in net revenues?

  1. Debt service fund
  2. Renewal and replacement fund
  3. Surplus fund
  4. Debt service reserve fund
Show answer & explanation

Correct answer: A - Debt service fund

Question 2

A municipal underwriting syndicate is formed as an Eastern (undivided) account with four members, each allocated 25% of the bonds. Member A has sold its entire allocation, but $2 million in bonds remain unsold in the overall account. Which of the following is TRUE?

  1. Member A has no further financial obligation to the syndicate
  2. The unsold bonds are returned to the issuer at the offering price
  3. Only the senior manager is liable for the unsold balance
  4. Member A is liable for $500,000 of the unsold bonds
Show answer & explanation

Correct answer: D - Member A is liable for $500,000 of the unsold bonds

Question 3

An investor in the 32% marginal federal tax bracket is comparing a 4.25% tax-exempt municipal bond to taxable alternatives. The taxable-equivalent yield of this municipal bond is CLOSEST to:

  1. 2.89%
  2. 5.61%
  3. 6.25%
  4. 13.28%
Show answer & explanation

Correct answer: C - 6.25%

Question 4

An investor purchases a municipal bond at 96 in the secondary market. The bond was originally issued at par and has 10 years remaining to maturity. How is the 4-point discount treated for federal tax purposes?

  1. As ordinary income, accreted annually or recognized upon disposition
  2. As tax-exempt interest, accreted annually over the remaining life of the bond
  3. As a capital gain if held to maturity
  4. No tax consequence, because municipal bond gains are always exempt
Show answer & explanation

Correct answer: A - As ordinary income, accreted annually or recognized upon disposition

Question 5

An analyst reviewing the creditworthiness of a general obligation bond would consider all of the following EXCEPT:

  1. The issuer's tax collection rate and delinquency trends
  2. The debt service coverage ratio and rate covenant
  3. Assessed property valuation trends within the jurisdiction
  4. Overlapping debt from school districts sharing the same tax base
Show answer & explanation

Correct answer: B - The debt service coverage ratio and rate covenant

Question 6

A municipal bond with a 5% coupon is currently trading at 104. Which of the following correctly ranks the yield measures from LOWEST to HIGHEST?

  1. Coupon rate, current yield, yield to maturity
  2. Current yield, yield to maturity, coupon rate
  3. Yield to maturity, yield to call, coupon rate
  4. Yield to call, yield to maturity, current yield
Show answer & explanation

Correct answer: D - Yield to call, yield to maturity, current yield

Domain 2: Economic Activity, Government Policy, and the Behavior of Interest Rates 14% of exam

Question 7

The Federal Open Market Committee votes to purchase U.S. Treasury securities in the open market. The MOST likely immediate effect of this action is:

  1. The federal funds rate target range is formally raised
  2. Bank reserves decrease and short-term interest rates rise
  3. The discount rate is automatically lowered by an equal amount
  4. Bank reserves increase and interest rates decline
Show answer & explanation

Correct answer: D - Bank reserves increase and interest rates decline

Domain 3: Securities Laws and Regulations 26% of exam

Question 8

A municipal finance professional (MFP) who is registered to vote in State X makes a $200 political contribution to a gubernatorial candidate in State Y, where the MFP neither lives nor votes. Under MSRB Rule G-37, what is the consequence for the dealer?

  1. The dealer must return the contribution within 60 days to avoid a penalty
  2. No consequence, because the contribution is below the $250 de minimis threshold
  3. The dealer is banned from negotiated underwriting with State Y for two years
  4. No consequence, because only contributions above $1,000 trigger a ban
Show answer & explanation

Correct answer: C - The dealer is banned from negotiated underwriting with State Y for two years

Question 9

Under SEC Rule 15c2-12, an issuer that has entered into a continuing disclosure agreement must file notice of a material event with EMMA within:

  1. 5 business days
  2. 10 business days
  3. 30 calendar days
  4. 60 calendar days
Show answer & explanation

Correct answer: B - 10 business days

Question 10

A municipal securities dealer has been engaged as financial advisor to a county planning a new bond issue. The county then asks the same dealer to underwrite the offering. Under MSRB Rule G-23, the dealer should:

  1. Accept both roles provided a written disclosure is given to the county
  2. Accept if the dealer agrees to waive its financial advisory fee
  3. Decline the underwriting engagement for this issue
  4. Proceed if the county gives formal consent at a public meeting
Show answer & explanation

Correct answer: C - Decline the underwriting engagement for this issue

Ready for the real thing?

Practice hundreds more Series 52 questions with instant scoring, weak-area drills, and full exam simulations.

Start the free practice test See pricing