Chapter 11 Quiz Questions
A municipal finance professional works for a b/d seeking to underwrite a municipal securities offering by a local town. The mayor of the town is seeking re-election. The MFP, who lives in the town, contributed $100 to the mayor's re-election campaign 13 months ago. How much more can the MFP contribute w/o jeopardizing the b/d's business? a) $250 b) $200 c) $150 d) $50
c) $150 - Since the MFP lives in the town and can therefore vote for the mayor, he may contribute an additional $150 to the re-election campaign for a total of $250. $250 per campaign, not per year.
An associated person was originally registered in 2014 and it is now 2020. When is the next time he would be required to take Regulatory Element training? a) 2020 b) 2021 c) 2022 d) 2024
c) 2022 Reg Element training is due on the second anniversary of original registration and then every 3 years thereafter. The next time is 2022 (2014+2+3+3)
Any changes to info on Form U4 must be updated within how many days? a) 10 days b) 20 days c) 30 days d) 90 days
c) 30 days
How long do registered persons returning from active duty in the US military have to associate themselves with a member? a) 30 days b) 60 days c) 90 days d) 180 days
c) 90 days
Which of the following would be a violation of FINRA Conduct Rules regarding private transactions? a) An associated person being involved in a private transaction for compensation on behalf of a member firm. b) An associated person entering a transaction w/ an immediate family member not for compensation c) An associated person offering securities that are not registered with the SEC d) An associated person entering into a series of private transactions.
c) An associated person offering securities that are not registered with the SEC
All of the following statements about Form U4 predispute arbitration clause are correct EXCEPT: a) Member firms are required by FINRA to disclose to applicants that Form U4 contains a predispute arbitration clause b) The Form U4 predispute arbitration clause appears on U4 amendments c) By signing a Form U4, applicants are agreeing to settle discrimination cases against their employer through arbitration d) By signing a Form U4, applicants are consenting to settle customer disputes through arbitration
c) By signing a Form U4, applicants are agreeing to settle discrimination cases against their employer through arbitration -The predispute arbitration clause does not affect employees' rights to sue for discrimination, sexual harassment, or claims arising under the whistleblower statute
Uniform Termination Notice for Securities Industry Registration is also known as a) Form S-1 b) Form U4 c) Form U5 d) Form 10k
c) Form U5
Which of the following activities may a nonregistered person perform a) Qualify a potential customer b) Solicit business c) Provide quotes d) Charge commissions
c) Provide quotes
A registered rep has failed to complete her Regulatory Element on time. Which of the following is TRUE? a) The RR's registration will be revoked, and the RR will have to submit a new Form U$ and retake a qualification exam. b) The RR may continue to perform all duties as a registered person while completing the Regulatory Element, but must pay a penalty fee. c) The RR's registration will be inactive, so the RR must cease all activities as a registered person until the requirement is met. d) The RR will automatically be given a 120-day extension period to complete the required training.
c) The RR's registration will be inactive, so the RR must cease all activities as a registered person until the requirement is met.
Which of the following candidate qualifications would FINRA take into consideration when waiving a Qualification Exam requirement? a) Traveling the the testing center would create an extraordinary hardship for the candidate. b) Within the last 3 years, the candidate achieved a score of 90% or higher on a similar FINRA Qualification Exam. c) The candidate has related experience in the securities industry and/or investment banking. d) The candidate holds a master's degree from an accredited university in the field of Finance and Economics.
c) The candidate has related experience in the securities industry and/or investment banking.
Which of the following is true of the registered persons on inactive status serving in active duty in the U.S. Military? a) They are required to re-register at a member firm w/in 60 days of returning to work. b) Upon returning to a member firm, they must make up any continuing education requirements. c) They can continue to earn commissions. d) They are not required to re-register upon returning to work at their member firm.
c) They can continue to earn commissions. Reg persons on inactive status to to military service have 90 days to re-register when they return. If they don't register w/in 90 days, their 2yr clock will start, after which, they will need to retake the reg exam. They can continue earning commissions if their frim has arranged for another reg person to handle their accounts. FINRA waives the continuing edu req
The maximum value of a gift allowed by FINRA Rules is a) $25 per gift b) $50 per person per year c) $100 per gift d) $100 per person per year
d) $100 per person per year
If a municipal financial professional gives $300 to the campaign of the mayor in the city where the MFP lives, for what period of time is the MFP's employing muni firm prohibited form doing a negotiated underwriting with the muni issuer? a) 6 months b) 1 year c) 18 months d) 2 years
d) 2 years
According to FINRA rules, members are required to report any violations of laws, rules, and regulations within how many days? a) 3 days b) 10 days c) 15 days d) 30 days
d) 30 days - Members must report violations within 30 days. In addition, members are required to report certain events on the part of the member or an associated person related to the securities, insurance, commodities, financial and investment industries. This reporting rule also pertains to instances in which the member knew or should have known of the event.
According to FINRA rules on private securities transactions, an associated person entering into a series of private transactions without compensation must provide the member firm with all of the following EXCEPT: a) A statement of possible compensation b) A description of each proposed transaction c) The person's proposed role in the transactions d) A written notice on each transaction in a series
d) A written notice on each transaction in a series - In the case where a series of related transactions w/o compensation are involved, an associated person needs to provide only a single written notice
Selling away is a violation of FINRA rules. Which of the following activities on the part of a registered rep is identified with selling away? a) Accepting a noncash gift that exceeds $100 in a given year. b) Sharing in the profits or losses in a cust act w/o prior written authorization from the customer and the b/d. c) Opening an account at a different b/d w/o prior written consent from the employing firm. d) Engaging in a private securities transaction w/o prior written consent of the employer.
d) Engaging in a private securities transaction w/o prior written consent of the employer.
Which of the following is true regarding a private securities transaction? a) It is a transaction within the normal business activities of the member firm. b) Associated persons are allowed to participate in private securities transactions at any time c) It is also known as "controlled business" d) It is a violation of Conduct Rules
d) It is a violation of Conduct Rules
Individuals who supervise others engaged in the investment or securities business for a member firm are known as a) Securities Directors b) Representatives c) Broker/Dealers d) Principals
d) Principals
In order to participate in a private securities transaction, a reg rep must do which of the following? a) Notify his supervisor in writing once he has engaged in the transaction. b) Place a telephone call to his supervisor in advance of participating in the transaction. c) Complete the paperwork required by the firm and have his supervisor sign it once the transaction is completed. d) Send prior written notice to his supervisor outlining the transaction, his role, and the compensation structure.
d) Send prior written notice to his supervisor outlining the transaction, his role, and the compensation structure
All of the following are true regarding private securities transactions for compensations EXCEPT a) A person acts on behalf of the member firm. b) They must be approved by a person's member firm. c) They must be recorded on the member firm's books. d) The member firm does not have the authority to disapprove transactions.
d) The member firm does not have the authority to disapprove transactions.
If an associated person was originally registered in 2020, when is the next time the associated person will be required to complete the Firm Element training? a) 2020 b) 2021 c) 2022 d) 2025
a) 2020 Associated persons must complete their Firm Element training annually.
A Series 6 registered rep may take a customer order for all of the following investments Except a) A closed-end bond fund in the secondary market. b) a closed-end bond fund in the primary market. c) A no-load mutual fund. d) A sector mutual fund.
a) A closed-end bond fund in the secondary market. -A series 6 rep is not licensed to take orders for secondary market securities
Disclosing a part of the qualification exam to another person or using portions of present or past exams for study purposes is deemed a) A violation b) Unethical c) Allowable d) Permissible on a case-by -case basis
a) A violation
All of the following are grounds for statutory disqualification EXCEPT a) Any misdemeanor in the last 5 years b) Any felony in the last 10 year c) Lying on the Form U4 d) Being barred by another SRO
a) Any misdemeanor in the last 5 years
An individual who has been previously resisted w/ another firm is applying for registration w/ a new member firm. The new member firm has requested the Form U5 form the applicant. How many days must the applicant provide the Form U5 from his previous registration? a) 24 hours b) 2 business days c) 5 business days d) 10 calendar days
b) 2 business days
A background check must be performed within how many days after the Form U4 is filed w/ FINRA? a) 10 days b) 30 days c) 60 days d) 90 days
b) 30 days
An individual has completed a U4 form and is now subject to statutory disqualification. Which of the following reportable events triggered the disqualification? a) A written customer complaint alleging misappropriation of assets. b) A felony conviction for a DUI. c) A personal bankruptcy. d) A felony charge for theft.
b) A felony conviction for a DUI.
A private securities transaction exits when a representative a) Has a joint account with a family member. b) Is selling away. c) Makes a trade for his personal account. d) Is engaged in any outside business activity
b) Is selling away
How often must a broker/dealer report political contributions of their municipal finance professional to the SRO? a) Monthly b) Quarterly c) Biannually d) Annually
b) Quarterly
A Reg Rep would be required to notify a FINRA member firm about all of the following EXCEPT: a) Starting a consulting practice b) Receiving passive investment income c) Receiving referral fees from another registered rep d) Becoming a real estate agent as a side business
b) Receiving passive investment income - FINRA member firms are to be notified of any outside business activities. An associated person cannot accept compensations from any other entity for any business activity, other than a passive investment, unless the associated person has provided prior written notice to the member firm.
