s7 c17

A customer's initial trade in a margin account is the short sale of 500 shares of DEF stock at $20. After making the required deposit, the credit balance in the account is:

$15,000

Regulation NMS applies to which TWO of the following choices? Listed equity trades Listed debt trades Quotes available for manual execution Quotes available for electronic execution

1 and 4

A customer enters a sell stop-limit order for 100 shares at 18.50. The last round-lot sale that took place before the order was entered was 18.88. Round-lot sales that took place after the order was entered were at 18.60, 18.25, 18.38, 18.50, and 18.63. The execution price is:

18.50

Which TWO of the following orders is a designated market maker (DMM) prohibited from accepting on his book? 1. An open (GTC) order 2. A market order 3. A day order 4. A not-held order

2 and 4

Quotes for non-Nasdaq, over-the-counter-traded equities can be obtained from the: 1. Third market 2. OTC Pink Market 3. Consolidated Quotation System 4. OTC Bulletin Board

2 and 4 only

To protect against a loss in a short sale, an investor can: 1. Sell a call 2. Enter a stop-loss order 3. Buy a call 4. Buy a put

2 or 3 only

A company is considering listing its common stock on an exchange. Place the following trading venues in order from LEAST to MOST stringent listing requirements. 1. NYSE 2. Nasdaq Capital Market 3. Nasdaq Global Market 4. Nasdaq Global Select Market

2, 3, 1, 4

Use the following quote to answer this question. ABC 25.13 + .25 B 25 A 25.25 Excluding any markups, what price will a customer pay to purchase the security?

25.25

Which of the following securities is NOT quoted on the Consolidated Quotation System (CQS)?

A security on the Pink Sheets

ABC Brokerage, a broker-dealer, purchases 600 shares of stock from a market maker to fill a customer's buy order. ABC has acted as a:

Agent

Which of the following lists assists a broker-dealer in making a reasonable determination that a security is available to be borrowed from another broker-dealer in order to effect a short sale transaction?

An Easy-to-Borrow List

A Nasdaq market maker is quoting a stock as follows: Bid 23.50, Offer 23.70, 10 x 5. This means that the market maker will:

Buy 1,000 shares at 23.50 and sell 500 shares at 23.70

A customer is willing to accept a partial execution on an order to buy up to 800 shares of XYZ stock at 30. If the client does not want the unexecuted portion to be left open, this order should be entered as:

Buy 800 XYZ at 30 IOC

A market maker is quoting a stock as follows: Bid 23.50, Offer 23.70. This means that the market maker will:

Buy shares at 23.50 and sell shares at 23.70

If a customer is short 1,000 shares of RST stock, the customer:

Can use a buy stop order to limit losses if the stock advances

Compared to selling short, buying a put option:

Does not require the client to arrange to borrow the stock

When a market maker gives a quote for a stock without qualification, the quote is a:

Firm quote for 100 shares

Which of the following choices is a feature of the Nasdaq Level II System?

Firm quotes of all the market makers in a stock

Buy-stop orders or sell-stop orders can provide all the following features, EXCEPT:

Give a broker discretion when the order is activated

A broker-dealer is acting as a principal in which of the following scenarios? 1. Selling bonds from inventory to an individual 2. Selling bonds from inventory to another broker-dealer 3. Buying bonds from another broker-dealer for inventory 4. Buying 500 bonds to fill an insurance company's order for 250 bonds

I, II, III, and IV

Ms. Thomas calls her registered representative with an order to buy up to 2,000 shares of XYZ at $35 per share right now and do not leave the unexecuted portion as a day or open order. Ms. Thomas has entered a(n):

Immediate-or-cancel order

Level I of Nasdaq indicates the:

Inside market for the security listed

Which of the following statements is FALSE regarding a broker-dealer acting as a market maker in a stock?

It makes money by charging commissions for executing transactions

If an at-the-opening order is not executed:

It will be cancelled

A broker-dealer that will both buy a security from a customer and sell a security to a customer from its inventory is a:

Market maker

A customer sells 500 shares of stock to a broker-dealer that acts as a market maker in the stock. The broker-dealer acted in a(n):

Principal capacity and charged the customer a markdown

A customer sells 500 shares of stock to a broker-dealer, a registered market maker in this stock. The broker-dealer acted in a(n):

Principal capacity and charged the customer a markdown

Quotes for non-Nasdaq, over-the-counter (OTC) traded equities can be obtained from the:

The OTC Bulletin Board (OTCBB)

When selling a security for a customer, all of the following items MUST be included on the sell order ticket, EXCEPT:

The customer's Social Security number

All of the following statements are TRUE concerning marketwide circuit breakers, EXCEPT:

The levels are calculated on a monthly basis

On the NYSE, an investor enters an order to buy 400 shares of HRJ at $56 per share. Which of the following statements is TRUE regarding this order?

The order may be partially filled

A registered representative enters an order for a client. In error, the RR purchases shares of the wrong security. Which of the following statements is TRUE?

The shares must be placed in the broker-dealer's error account

Kyle, a client at TLC brokerage firm, anticipates a decline in the earnings of LPOP. LPOP is a thinly traded issue. Which of the following statements BEST describes what the RR should disclose to Kyle?

The stock may be difficult to sell short because the shares may not be available to borrow

Which of the following statements is TRUE concerning Trade Reporting and Compliance Engine (TRACE) reports?

The system is used for corporate bonds

A trader at your firm executes an order for a corporate bond. The trade must be reported to the:

Trade Reporting and Compliance Engine (TRACE)

A customer is short 100 ABC at $120. The market is moving up sharply and the customer decides to cover her short position. The customer instructs her registered representative to cover the short position at the market on the close. The order:

Will be executed as close as possible to the closing price