YEP

Key rules to protect the public?

1. members must offer the securities at the public offering price. 2. securities industry insiders may not take advantage of their insider status to gain access to new issues for their own benefit. 3. member firms may not withhold securities in a public offering for their own benefit.

Records of original entry must be recorded no later than the next business day and must be kept readily available for

2 years

Firm element training requires member firms to prepare training how frequently?

Annually

Which of the following would require the filing of a suspicious activity report (SAR)?

Any transaction alone or in aggregate involving at least $5,000 and appears to serve no business or legal purpose.

Who would not be considered Municipal Financial Professionals?

Associated persons whose activities are limited solely to sales or have only clerical or ministerial functions

Which of the following is a characteristic shared by both corporate debentures and income bonds?

Both must pay principal as it comes due

A married couple opens a new account with a broker-dealer as tenants in common. In explaining the details of the account to the couple, the registered representative would not indicate which of the following?

Certificates may be registered in the name of either party.

Which of the following are three-year or six-year records?

Compliance and Procedures Manual List of home, regional, and branch offices

Which of the following are true of traditional IRAs but not of Roth IRAs?

Contributions may be deductible There is a 50% penalty for failing to take the required minimum distribution (RMD)

Which of the following records must be kept for six years?

Customer statements Customer new account forms

True or False: FINRA prepares the firm element of a firm's training?

False

A registered representative has left a firm and joined another. The new firm must obtain a copy of the Form U-5 filled out by the old firm. Where might the new firm obtain a copy of the form?

From the new employee From Financial Industry Regulatory Authority (FINRA)'s Central Registration Depository (CRD)

Which of the following would be true with regard to capital gains?

If an asset is sold within one year (12 months or less) of its purchase, the gain is considered to be short-term and taxed at the same rate as the taxpayer's ordinary income. If the asset is held for more than a year, the gain is considered to be long term and is taxed at a favorable rate.

Is breakpoint sale a market manipulation?

No

Can warrants or rights be purchased on margin?

Only warrants can be purchased on margin

What is the formula for gains or losses for tax purposes?

Proceeds minus cost basis

Which of the following are required in discretionary accounts?

Prompt approval by a principal following each discretionary trade

If a broker-dealer holds the stock of an investor in street name, which of the following must be forwarded to the investor promptly upon receipt?

Proxy statements relating to upcoming shareholder meetings Quarterly financial and other reports generated by the issuer

Which of the following is considered a benefit for broker-dealers offering margin accounts to their customers?

The additional income generated from the payment of margin interest

What is the requirement for broker-dealers regarding customer account statements?

They must be provided at least quarterly.

Regarding purchases on margin, which of the following is true?

Warrants can be purchased on margin, but rights cannot.

Correspondence

any written or electronic communication that is distributed or made available to 25 or fewer retail investors within any 30 calendar-day period.

Your client wants to invest in a managed fund that he can trade intraday. What is his best option?

closed-end fund

When the Federal Open Market Committee (FOMC) directs that Treasury securities be sold in the open market, this

decreases the money supply.

In regards to treasury securities, what does the Federal Open Market Committee to decrease the money supply?

directs that treasury securities should be sold in the open market

What do you do to eliminate a short position?

enter closing order to purchase

Roth IRAs

have no minimum required distributions at any age can be contributed to in the same year as a traditional IRA

For the risk disclosures found in the options disclosure document (ODD), all of the following would be accurate disclosures except

if a maintenance call is not met, the customer must direct which securities to sell.

How are certificates registered in regards to joint accounts?

in the names of all parties to the account

What do institutional communications specifically exclude ?

internal communications such as memos

A customer wishes to sell short 1,000 shares of ABC. Prior to executing the order, the registered representative must

locate shares that can be lent to effect the sale.

What is structuring?

making multiple deposits to stay under the radar of having a CTR filed

Which if the following may not be purchased on margin but can be used as collateral for a margin loan after being held for 30 days?

mutual funds

Regarding the purchase of new equity issues (IPOs), restricted persons may

not purchase shares of a new issue

When a broker-dealer pledges customer securities to a bank as collateral for a margin loan, the pledge is known as

rehypothecation

Combination Offering

sale proceeds for shares being sold to the investing public will go to some of the existing shareholders who want to divest of their shares as well to the corporation

What should a client do when he owns a position and wants to get out of it?

sell to close

What cannot be done in a cash account?

selling short to open

A customer who tries to disguise deposits of more than $10,000 in currency by making multiple smaller deposits in currency is guilty of

structuring

A company offers to repurchase outstanding debt securities it has issued directly from its bondholders for cash in what would commonly be known as

tender offer

The bid price represents

the price the broker-dealer is willing to pay when buying a security. the price a customer will receive when selling a security.

Which of the following records must be kept by a broker-dealer firm for three years?

trial balances

After receiving a written complaint letter from a client, a registered representative should

turn the complaint over to the appropriate supervisor or principal.

What things may never be used in a seminar?

use a designation that is largely unknown representative is introduced as someone approved by Financial Industry Regulatory Authority (FINRA) to answer questions from senior investors

Each of the following investments and practices are deemed ineligible for an IRA or any other retirement plan except

variable annuities