SIE Unit 3 & 4-Questions

c

BCO is currently quoted bid 42 ask 42.5 10 x 12. Your customer may be able to buy @ a. 1,000 shares @ $42/share b. 1,200 shares @ $42/share c. 1,200 shares @ $42.5/share d. 1,000 shares @ $42.5/share

b

A BD may give other firms' employees gratuities without violating the rules, provided the compensation's total value does not exceed a. $50 b. $100 c. $250 d. $500

d

A customer has returned a signed proxy statement for stock held in street name by a member firm. He did not indicate how he wanted to vote for any issues listed on his ballot. What action, if any, is required of the member firm? a. no action is required & no votes are cast b. firm must contact the beneficial owner of the stock & ask for direction on how to vote on the proposals listed c. firm may vote on the ballot as it sees fit for the benefit of the customer d. firm must vote in accordance with the reccomendations made by the issuer of the stock

b

A customer owns a diversified portfolio of large-cap stocks. This customer would like to compare her portfolio's performance to the overall market. The best index to use as a benchmark is which of the following? a. EAFE b. S & P 500 index c. Barclay's Aggregate Bond Index d. Russell 2000 index

a

A retirement plan that requires a formula-based payment for the retiree's life is a. pension plan b. defined contribution plan c. money purchase plan d. 401(k) plan

c

A stock power may be used to a. authorize discretionary trading b. place an unsolicited trade c. replace the owner's signature on the back of a certificate d. pay for a trade

b

A trust formed during the grantors lifetime that may be modified only by the original grantor is normally called a. irrevocable living trust b. revocable living trust c. A-B trust d. life insurance trust

a

A written customer complaint is retained a. 4 years b. 6 years c. 3 years d. until resolved

c

3 years ago your client, Lucy Jones, purchased 200 shares of Tremor Corporation. The shares have appreciated & she wants to take her profits. She would do this by entering a. opening sale b. short sale c. closing sale d. covering purchase

b

ABC stock is currently trading @ $63. Julia Miller would like to purchase ABC stock, but not at 63. If the price of ABC stock were to fall to $58 or less, then Miller wants to buy the stock. Which type of order should Miller place considering her objective? a. market order b. buy limit c. buy stop d. buy stop limit

c

All of the following are components of ordinary income except a. bonus from employer b. interest pmts made from a bond portfolio c. profit made from the sale of a long-held security d. consultation fees received from a client

a

All of the following are true of a 529 college savings plan except a. distribution must be complete by the beneficary's 30th birthday b. there are no taxes due for distributions used for qualified education expenses c. there is no income limit for the person making a contribution d. there is no annual contribution limits

a

All of the following are types of prohibited activities except a. wash sales b. pump & dump c. churning d. front running

c

All of the following must be retained indefinitely except? a. stock cert bonds b. articles of incorporation c. customer ledgers d. board meeting minutes

d

An individual applying for registration as an associated person will be rejected if he a. submitted an application for registration that omitted mention of a minor traffic violation that occurred 2 years ago b. failed 2 include the zip code on his home address c. is under a court injunction regarding a domestic issue d. is under an order of a foreign financial regulator denying, suspending, or revoking his registration of barring him from association w/ a BD

c

An individual opens an account with your firm. She tells you that upon her death, she wants any assets in the account to be divided, equally among her 3 children. She also wants the ability to change the allocation in the event that conditions change & one of the children is in greater need than the others, but she does not want to incur any significant legal expense. You would suggest that the account be opened a. as a joint account with the right of survivorship b. as a joint account w/ tenants in common c. as an individual transfer on death account d. under a discretionary power

a

As a means of protecting the integrity of the industry & protecting the investing public, associated persons of FINRA member firms must submit fingerprint records to a. US attorney general b. state attorney general c. SEC d. FBI

a

Entering a sale of stock short without locating the shares first is an uncovered short and is a violation of a. Regulation SHO b. Regulation SHRT c. the uptick rule d. short against the box

a

FINRA retains regulatory jurisdiction for how long after a registered person terminates association with a member firm? a. 2 years b. 120 days c. 1 year d. 90 days

c

How soon after termination must Form U-5 be filed with CRD? a. 60 days b. 90 days c. 30 days d. 120 days

a

If 3 individuals have tenants in common account w/ your firm and one individual dies, then a. the 2 survivors continue as tenants, along w/ the decedent's estate b. the account must be liquidated & the proceeds split evenly between the 2 survivors & the decedent's estate c. trading is discontinued until the executor names a replacement for the deceased d. the account is converted to joint tenants with rights of surviorship

c

In a stock buyback, the shares are purchased by which of the following? a. owner b. board of directors c. issuer of the shares d. investment trust

c

In order to contribute to both a traditional IRA & Roth IRA in the same year, a customer must have sufficient a. ordinary income b. passive income c. earned income d. portfolio income

a

MGS stock is quoted at 15.20 bid-ask 15.22 5 x 12. The spread is a. $0.02 b. $0.25 c. $0.2 d. 2

b

Mr Perez began contributing $3,000 a year to a Roth IRA account 10 years ago when he was 50 years old. The account value today has grown to $60,000. He withdraws $5,000 from the old account. Mr Perez will owe taxes on a. entire amount b. none of the withdrawal c. principal portion of the withdrawal d. gains plus a 10% penalty for premature distribution

d

Ms. Chiang executes a trade to purchase 100 shares of ABC corporation common in her cash account on Thursday, June 30th. Cash must be in her account sufficient to pay for the trade by the close of business on a. July 1 b. July 2 c. July 3 d. July 5

c

Seabird Securities does not have any firm policies regarding or lending arrangements between associated persons and customers. Under which of the following circumstances would a registered rep be allowed to borrow from a customer? a. borrowing from his Uncle Joe b. borrowing from Dustin, his college buddy c. under no circumstances d. borrowing from Dr. Duvall, his optometrist

c

Seabirds Airlines pays a $0.40 a share quarterly dividend, & shares are currently trading @ $32/share. The current yield for Seabird is a. 1 1/4% b. 2 2/2% c. 5% d. 10%

c

Seacoast Securities is a new FINRA member firm. It is preparing a new marketing campaign, including a mass mail advertisement. The advertisement must a. be filed with FINRA within 10 days of 1st use b. be filed with the SEC within 10 days of 1st use c. be filed with FINRA @ least 10 days before use d. be approved by a FINRA before use

c

The Office of Foreign Asset Control is a division of a. State Department b. Justice Department c. Treasury Department d. Fed

d

The Windmill Growth Fund declares a 15 cent dividend for shareholders as record of Wednesday, November 12th. The most likely ex-dividend date is a. Monday, Nov 10th b. Tuesday, Nov 11th c. Wednesday, Nov 12th d. Thursday, Nov 13th

c

The current quote for DEF stock is 49.50 bid-ask 49.75. If an investor wanted to buy or sell DEF stock, we can conclude which of the following? I. The best price anyone in the secondary market is willing to sell at is 49.50 II. The best price anyone in the secondary market is willing to sell at is 49.75 III. The best price anyone in the secondary market is willing to buy at is 49.50 IV. The best price anyone in the secondary market is willing to buy at is 49.75 a. I & III b. I & IV c. II & III d. II & IV

d

The customer must agree to 3 specific elements of a trade before the trade's execution for the trade to be non-discretionary. Which of the following is not required? a. action b. asset c. allowance d. amount

a

The purchase of an equity option settles, ________, the exercise of an equity option settles _____ a. T+1, T+2 b. T+2, T+1 c. same day, T+1 d. T+2, T+3

b

The receptionist @ a BD opens all incoming mail & forwards it to various departments & people of the firm. Which of the following statements is true? I. Receptionist must be fingerprinted II. Does not need fingerprint III. must be registered w/ FINRA IV. doesn't need registration a. I & III b. I & IV c. II & III d. II & IV

d

When an investor is long a stock a. the investor is bearish b. buying the stock in the secondary market will close the position c. there is unlimited gain potential d. the investor is bullish

c

When opening a new brokerage account that will allow for margin trading, all of the following forms are required except a. account application b. credit agreement c. consent to loan agreement d. hypothecation agreement

d

Which of the following investments would not be allowed in a custodial account? a. covered call options b. small company stocks from an emerging market c. blue chip stocks d. uncovered call options

a

Which of the following is a nonfinancial consideration or circumstance? a. has the customer even been divorced? b. what is the customer's current income? c. how much is the customer's mortgage balance? d. what is the balance of the customer's 401K?

b

Which of the following is a taxable event for an investor when it occurs? a. stock dividend distribution b. cash dividend distribution c. forward split d. reverse split

c

Which of the following is correct regarding the continuing education regulatory element requirements? a. training must be completed within 120 days of the person's second registration anniversary and every 5 years thereafter b. training must be completed within 120 days of the person's first registration anniversary and then annually thereafter c. training must be completed within 120 days of the person's second registration anniversary and every 3 years thereafter d. training must be completed annually

c

Which of the following is not a rule under the TCPA of 1991? a. calls must be made between 8am and 9pm in the prospect's time b. solicitors must identify themselves and their company c. calls must be made between 9am and 8am in the prospect's time d. all telemarketing firms must maintain a do not call list

c

Which of the following is not a step in the money laundering process? a. placement b. layering c. insertion d. integration

d

Which of the following is not one of the 3 classes of communication with the public? a. institutional b. retail c. correspondance d. educational

d

Which of the following records has a 3 year retention requirement? a. amendments to the partnership agreement b. trade blotters c. customer statements d. order tickets

a

Which of the following statements concerning the delivery of statements is not correct? a. must be sent monthly b. must be sent @ least quarterly c. must be sent for any month in which there is activity d. must be sent monthly if the account holds penny stocks

a

Which of the following transactions done in a single day would not cause a firm to file a Currency Transaction Report (CTR)? a. deposits of a series of 4 checks @ $3,000 each b. 22 deposits of $500 cash c. 4 deposits of $3,000 cash & an outbound wired funds transaction for $10,000 d. withdrawal of $12,000 from an account followed by a deposit of $11,000 cash into a third party account

c

Which of the reasons for termination from Form U-5 do not require a detailed explanation? I. Discharged II. Permitted to resign III. Deceased IV. Voluntary V. Other a. I & II b. II & III c. III & IV d. I, II, V

c

You overhear a discussion about a RR being disciplined because of selling away. Which of FINRA's conduct rules was violated? a. outside business activity b. accepting excessive noncash compensation c. private securities transactions d. failure to direct the client's trade to the best available market

b

Your client, Dan Brown, believes the Seabird Coffee Comp's shares are significantly overvalued and will soon drop sharply in value. In order to profit from this drop, he could a. buy calls on Seabird common stock b. sell Seabird shares short c. sell Seabird shares long d. sell puts on Seabird common stock

d

Your client, Mrs. Watt, sold her investment in Ohm Electric Company on June 10 for $22/share. She purchased the stock on July 10 of the previous year for $18/share. She has realized a. long term capital loss b. long term capital gain c. short term capital loss d. short term capital gain

b

Your customer calls & requests that you purchase 300 shares of Seabird Coffee Company. He recently read an article online about the company's new collaboration with Sorag coffee makers and likes the prospects of Seabird. This is an example of a. solicited trade b. unsolicited trade c. discretionary trade d. suggested trade

a

Your customer has $120,000 in ordinary income in the prior tax year. This customer also sold 2 stock positions- the first for a gain of $47,000 and the second for a loss of $50,000. For that tax year, the customer will pay tax on a. $117,000 in ordinary income and zero net gains b. $117,000 in ordinary income & $3,000 in gains c. $120,000 in ordinary income & zero net gains d. $120,000 in ordinary income & $3,000 in net gains

d

Your customer places a trade to buy 1,000 shares of Seabird Airlines @ a limit of 32 FOK. When the order reaches the floor of the exchange, there are 500 shares available to buy @ 32. What is the likely outcome of the trade? a. 500 shares filled, 500 share order remains until filled or canceled @ the end of the day b. 500 shares filled, rest of the order is canceled c. 500 shares filled @ 32, 500 @ the market d. order canceled, nothing done

b

Your customer purchases 200 shares ABC stock @ $9 a share in a cash account. The customer is expected to deposit how much to pay for the trade? a. $900 b. $1,800 c. $2,000 d. $450

b

Your customer purchases 200 shares of ABC stock @ $9/share in a margin cash account. The customer is expected to deposit how much to pay for the trade? a. $900 b. $1,800 c. $2,000 d. $450

b

Your customer, Cleveland Brown, would like you to be able to place trades in his account as and when you think best. In order to trade on a discretionary basis in Mr. Brown's account, you will need authorization from which of these? I. FINRA II. a principal III. customer IV. state administrator a. I & II b. II & III c. I & III d. I & IV