A dealer serves as underwriter of a city's bond issue and gives advice on that issue. How does the municipal advisor definition in Exchange Act Section 15B(e)(4) treat the dealer?Answer: It is excluded while serving as an underwriter. Source: Securities Exchange Act of 1934, Section 15B(e)(4)(C), 15 U.S.C. 78o-4. Outline: MSRB Series 50 Content Outline (June 2018), Part 1, 1.1.2.
A municipal advisor advised a county on its bond issue. The advisor's affiliate now wants to buy those bonds from the county for the affiliate's own account. How does MSRB Rule G-42(e)(ii) treat the purchase?Answer: It is a prohibited principal transaction. Source: MSRB Rule G-42(e)(ii) and (f)(ix). Outline: MSRB Series 50 Content Outline (June 2018), Part 1, 1.1.3.
A municipal advisor professional gives $400 to the campaign of a mayor she is entitled to vote for. The mayor can influence which advisor the city hires. What follows under MSRB Rule G-37?Answer: A two-year ban on advisory business with the city. Source: MSRB Rule G-37(b)(i) and (b)(ii). Outline: MSRB Series 50 Content Outline (June 2018), Part 1, 1.1.3.
Show all 50 questions (47 more)
SEC and MSRB rules for municipal advisors, continued
A municipal advisor's client is a private college that borrows bond proceeds through a state authority, so the client is an obligated person. Which duty does MSRB Rule G-42(a) place on the advisor?Answer: A duty of care. Source: MSRB Rule G-42(a)(i) and (ii). Outline: MSRB Series 50 Content Outline (June 2018), Part 1, 1.1.3.
For how long must a registered municipal advisor preserve the books and records that SEC Rule 15Ba1-8 requires it to make?Answer: Not less than five years, the first two in an easily accessible place. Source: SEC Rule 15Ba1-8(b)(1), 17 CFR 240.15Ba1-8; MSRB Rule G-9(h). Outline: MSRB Series 50 Content Outline (June 2018), Part 1, 1.1.2.
Under Section 15B(c)(1) of the Exchange Act, to whom is a municipal advisor deemed to have a fiduciary duty?Answer: Any municipal entity it advises as a municipal advisor. Source: Securities Exchange Act of 1934, Section 15B(c)(1), 15 U.S.C. 78o-4. Outline: MSRB Series 50 Content Outline (June 2018), Part 1, 1.1.1.
Municipal finance 18
A $1,000 bond with a 4% coupon is bought at a price of $800. What is its current yield?Answer: 5.00%. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Current Yield'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.3.1.1.
A callable premium bond is quoted at a dollar price. Its yield to maturity is 3.40%, its yield to the first call at 102 is 2.95% and its yield to the par call is 3.10%. What is its yield to worst?Answer: 2.95%. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Yield to Worst'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.3.1.1.
A certificate of participation gives its holder a pro rata share in a pledged revenue stream. What is that stream usually?Answer: Lease payments subject to annual appropriation. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Certificate of Participation (COP)'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.2.1.
A city's sewer bonds are secured by sewer charges and also by the city's full faith and credit. What kind of bond is this?Answer: A double-barreled bond. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Double-Barreled Bond'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.2.1.
A customer buys $100,000 par of 5% municipal bonds. Interest was last paid on January 1 and the trade settles on April 16. On a 30/360 basis, how much accrued interest does the buyer pay the seller?Answer: $1,458.33. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Accrued Interest'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.3.1.1.
A hospital borrows the proceeds of bonds issued by a county authority and is legally committed to pay the debt service. In municipal disclosure, what is the hospital?Answer: An obligated person. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Obligated Person' and 'Obligor'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.1.2.
A moral obligation bond carries a covenant that any shortfall in debt service will be put in the budget recommendation to the governing body. What is the governing body's legal position?Answer: It may appropriate the money but is not obligated to. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Moral Obligation Bond'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.2.1.
An advisor plots yields on bonds of the same quality and finds that short-term rates exceed long-term rates. What is this yield curve called?Answer: Inverted or negative. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Yield Curve'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.4.4.
An investor in a variable rate demand obligation puts the bond back to the tender agent after the required notice. What price is the investor paid?Answer: Par plus accrued interest. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Variable Rate Demand Obligation (VRDO)'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.2.1.
An issuer with variable rate bonds enters a swap in which it pays the counterparty a fixed rate and receives a variable rate. What has the issuer done?Answer: Synthetically converted variable rate debt to fixed rate debt. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Floating-to-Fixed Rate Swap'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.2.4.
Bids in a competitive sale may be compared by net interest cost (NIC) or true interest cost (TIC). What does TIC take into account that NIC does not?Answer: The time value of money. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'True Interest Cost (TIC)' and 'Net Interest Cost (NIC)'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.3.1.1.
For whose benefit does the trustee under a bond contract act in a fiduciary capacity?Answer: The bondholders. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Trustee'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.1.7.
How does a standby bond purchase agreement differ from a letter of credit that supports variable rate demand obligations?Answer: It has termination events and is not unconditional. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Standby Bond Purchase Agreement'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.1.4.
In an advance refunding, what does the verification report prepared by an independent accountant demonstrate?Answer: That escrow cash flows will pay the refunded bonds. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Verification Report'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.1.8.
Refunding bonds are issued on March 1. The refunded bonds stay outstanding until their first call date, August 1 of the same year. How is the refunding classified?Answer: An advance refunding. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Advance Refunding' and 'Current Refunding'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.3.2.3.
Which participant in a bond issue customarily gives the opinion that the bonds have been validly issued and, where intended, are tax-exempt?Answer: Bond counsel. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Bond Counsel'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.1.3.
Why do issuers most commonly buy State and Local Government Series (SLGS) securities from the Treasury?Answer: To fund a refunding escrow within arbitrage restrictions. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'SLGS'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.2.2.
Within the Federal Reserve System, which body is responsible for open market operations?Answer: The Federal Open Market Committee. Source: Board of Governors of the Federal Reserve System, 'Federal Open Market Committee'. Outline: MSRB Series 50 Content Outline (June 2018), Part 2, 2.4.1.
Credit analysis and due diligence 6
A city lies inside a county and a school district that both have bonds outstanding. What is the city's proportionate share of that debt called?Answer: Overlapping debt. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Bonded Debt'. Outline: MSRB Series 50 Content Outline (June 2018), Part 3, 3.1.5.
A government's annual comprehensive financial report must meet standards set by which body?Answer: The Governmental Accounting Standards Board. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Annual Comprehensive Financial Report (ACFR)'. Outline: MSRB Series 50 Content Outline (June 2018), Part 3, 3.1.4.
A water authority pays every interest and principal payment on time but lets its rates fall below the level the bond contract requires. What has occurred?Answer: A technical default. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Default'. Outline: MSRB Series 50 Content Outline (June 2018), Part 3, 3.4.
In a government's financial statements, what are other post employment benefits (OPEB)?Answer: Retiree benefits other than pensions, such as medical. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Other Post Employment Benefits (OPEB)'. Outline: MSRB Series 50 Content Outline (June 2018), Part 3, 3.2.
Under 11 U.S.C. 109(c), which is a condition for an entity to be a debtor under Chapter 9 of the Bankruptcy Code?Answer: It is specifically authorized by state law to be a debtor. Source: U.S. Bankruptcy Code, 11 U.S.C. 109(c). Outline: MSRB Series 50 Content Outline (June 2018), Part 3, 3.4.
Under the know-your-client provision in the supplementary material to MSRB Rule G-42, which facts must a municipal advisor use reasonable diligence to know and retain?Answer: Essential facts about the client and the authority of each person acting for it. Source: MSRB Rule G-42, Supplementary Material .10. Outline: MSRB Series 50 Content Outline (June 2018), Part 3, 3.3.
Structuring, pricing and executing debt 15
A buyer is allotted bonds in a primary offering and resells them at once for a profit, never meaning to hold them. What is this practice called?Answer: Flipping. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Flipping'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.2.3.
A revenue bond contract has an additional bonds test. What must the issuer typically show before it issues more bonds on parity with the outstanding ones?Answer: Revenues cover old and new debt service by a set ratio. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Additional Bonds Covenant or Test'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.1.6.
A stadium financed with revenue bonds is destroyed by fire, and the bond contract lets the issuer redeem the bonds with the insurance money. What kind of redemption is this?Answer: An extraordinary redemption. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Extraordinary Call or Redemption'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.1.3.
A water system has gross revenues of $12 million, operation and maintenance expenses of $7 million and annual debt service of $4 million. Under a net revenue pledge, what is debt service coverage?Answer: 1.25 times. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Coverage' and 'Net Revenues'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.1.5.
An insured bond carries the insurer's rating. What is the rating assigned to the bond on a stand-alone basis, without regard to the insurance?Answer: The underlying rating. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Underlying Rating'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.2.7.
An issue has bonds maturing in each year from 2027 to 2040, none subject to mandatory sinking fund redemption. What are these bonds?Answer: Serial bonds. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Serial Bonds' and 'Term Bonds'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.1.1.
An issuer may designate an offering as bank qualified if it reasonably expects its tax-exempt issuance for the calendar year to stay within what amount?Answer: $10 million. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Bank Qualified (BQ)'; Internal Revenue Code Section 265(b)(3). Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.2.6.
In a competitive sale, to which bidder does the issuer award the bonds?Answer: The one whose conforming bid has the lowest interest cost. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Competitive Sale'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.3.1.
In which kind of sale are pre-sale orders almost exclusively seen, and how are they treated when bonds are allocated?Answer: Competitive sales; they normally get top priority. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Pre-Sale Order'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.2.2.
Interest on which kind of municipal bond may be subject to the federal alternative minimum tax?Answer: Certain private activity bonds. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Alternative Minimum Tax (AMT)'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.1.11.
Once the order period begins, what is the most common order of priority in an underwriting syndicate?Answer: Group net, then net designated, then member orders. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Priority Provisions'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.3.2.
What does a non-appropriation clause in a lease financing allow?Answer: The lessee may end its obligations if money for the payments is not appropriated. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Non-Appropriation Clause' and 'Abatement Clause'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.1.10.
What must an issuer pay to exercise a make whole call?Answer: A lump sum based on the present value of the unpaid interest. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Make Whole Call'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.1.3.
Which system is the official source for official statements and for continuing disclosures on outstanding municipal issues?Answer: EMMA, operated by the MSRB. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Electronic Municipal Market Access (EMMA) System'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.4.2.
Why is a preliminary official statement nicknamed a red herring?Answer: A red-print legend says offers are not made on the basis of it. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Preliminary Official Statement (POS)'. Outline: MSRB Series 50 Content Outline (June 2018), Part 4, 4.4.1.
Issuance requirements 5
A school district plans to issue bonds in May 2026 to pay off its 2016 bonds, which cannot be redeemed until 2028. What does IRS Publication 4079 say about interest on such an issue?Answer: Interest is taxable: it is an advance refunding issued after 2017. Source: IRS Publication 4079, Tax-Exempt Governmental Bonds, 'Limitations on Refunding Governmental Bonds'. Outline: MSRB Series 50 Content Outline (June 2018), Part 5, 5.1.2.
An issuer owes arbitrage rebate on a long-term tax-exempt issue. Under Treasury Regulation 1.148-3(f), by when must the first rebate installment be computed?Answer: For a date not later than 5 years after the issue date. Source: Treasury Regulation 1.148-3(f)(1), 26 CFR 1.148-3. Outline: MSRB Series 50 Content Outline (June 2018), Part 5, 5.1.4.
Internal Revenue Code Section 147(f) requires public approval of a private activity bond issue. When approval comes from the applicable elected representative, what must come before it?Answer: A public hearing following reasonable public notice. Source: Internal Revenue Code Section 147(f), 26 U.S.C. 147; MSRB Glossary, 'TEFRA'. Outline: MSRB Series 50 Content Outline (June 2018), Part 5, 5.1.2.
Under Internal Revenue Code Section 141(b)(1), an issue meets the private business use test when more than what share of its proceeds is to be used for private business use?Answer: 10 percent. Source: Internal Revenue Code Section 141(b), 26 U.S.C. 141. Outline: MSRB Series 50 Content Outline (June 2018), Part 5, 5.1.2.
Under the continuing disclosure undertaking that SEC Rule 15c2-12 describes, how soon must notice of a listed event, such as a payment delinquency, be provided?Answer: Within ten business days after the event. Source: SEC Rule 15c2-12(b)(5)(i)(C), 17 CFR 240.15c2-12. Outline: MSRB Series 50 Content Outline (June 2018), Part 5, 5.1.3.
How this list was compiled: Our own questions, written to the five functions of the Municipal Advisor Representative Qualification Examination (Series 50) Content Outline that the MSRB publishes, last updated June 2018 (https://www.msrb.org/sites/default/files/2022-09/Series-50-Content-Outline.pdf, read 2026-10-14): SEC and MSRB rules regarding municipal advisors 12 of 100 questions, municipal finance 35, issuer's credit analysis and due diligence 12, structuring, pricing and executing municipal debt products 31, requirements related to the issuance of municipal debt 10. The bank of 50 holds 6, 18, 6, 15 and 5. Every fact was read on 2026-10-14 in the public text the question names: the MSRB Glossary of Municipal Securities Terms, Third Edition (https://www.msrb.org/sites/default/files/2022-08/MSRB-Glossary-of-Municipal-Securities-Terms-Third_Edition-August-2013.pdf); MSRB Rules G-9, G-37 and G-42 on msrb.org; Exchange Act Section 15B, Bankruptcy Code Section 109 and Internal Revenue Code Sections 141, 147 and 265 on govinfo.gov; SEC Rules 15Ba1-8 and 15c2-12 and Treasury Regulation 1.148-3 on ecfr.gov; IRS Publication 4079; and the Federal Reserve Board's page on the Federal Open Market Committee. Licence: Questions, choices and explanations are original work of this site.
How it works
The free Series 50 study guide is the MSRB's content outline, linked below the questions. This page adds 50 practice questions in its proportions. Unofficial: not affiliated with the MSRB or FINRA. Not investment, tax or legal advice.
Read the full guide
Five functions, in the MSRB's shares
The outline splits 100 scored questions 12, 35, 12, 31 and 10 across advisor rules, municipal finance, credit analysis, structuring and pricing, and issuance requirements. This bank of 50 holds 6, 18, 6, 15 and 5.
Sources by name
Rule answers cite Exchange Act Section 15B, SEC Rules 15Ba1-8 and 15c2-12 and MSRB Rules G-37 and G-42. Finance answers cite the MSRB's Glossary of Municipal Securities Terms; tax answers cite the Internal Revenue Code and IRS Publication 4079.
A half-length run
The timed exam asks all 50 in 90 minutes with the MSRB's 71% pass mark: half the real exam's 100 scored questions and half its three hours.
Sort refundings by the 90-day line: current within 90 days, advance beyond it. Advance refunding bonds issued after 2017 are not tax-exempt.
An advisor owes a fiduciary duty to a municipal entity client and a duty of care to an obligated person client.
Questions and answers
Is there a free Series 50 study guide?
The MSRB's Series 50 content outline is a free PDF that lists every function and topic on the exam. This page adds 50 practice questions that name the source behind each answer, and it is not the MSRB's guide.
What is the Series 50 exam?
The Municipal Advisor Representative Qualification Examination. The MSRB develops it for people who engage in municipal advisory activities on a municipal advisor's behalf, and FINRA administers it.
How many questions are on the Series 50 exam?
110 multiple-choice questions in three hours: 100 are scored, and 10 are unscored pretest questions spread through the exam. Each question has four answer choices.
What is the passing score for the Series 50?
71%, as the MSRB's outline states. The score is the number of scored questions answered correctly, so it pays to answer every question.
How much does the Series 50 exam cost?
$265, as the MSRB's page of professional qualification examinations listed it on the day this page was checked.