SIE Exam Quiz 3B

How long must a BD hold the record of a complaint?

4 years

Which of the following is NOT true for trade confirmations?

Commissions are added to the sales proceeds to arrive at the amount the seller is to receive

Account statements provided to customers would reflect I. year-to-date activity in the account II. long positions, short positions, or both III. whether the account was discretionary or nondiscretionary IV. debit or credit balances

I and IV

A wealthy individual has established a trust and wishes to establish an account with your BD that permits the trust to engage in margin transactions. Which of the following statements regarding margin trading in trust accounts is TRUE?

It is permitted if provided for in the trust's documentation

A client of a brokerage firm opened an UTMA for her granddaughter 5 years ago, naming the child's father as the custodian. Through appreciation as well as additional contributions, the account value has grown to $50,000 and generates interest and dividend income in excess of $3,000. Who bears the liability for the taxes on this income?

The granddaughter

Many years ago, a client purchased 100 shares of ABC common stock. Due to stock splits, the customer's account now holds 500 shares of ABC. If the customer had the BD send out certificates for 200 of those shares in the mail, then

a nontrade confirmation would have to be generated

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 and 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

as an individual transfer on death (TOD) account

The following statements regarding electronic delivery of customer confirmations and statements are true EXCEPT

once customers agreed to electronic delivery, they can no longer receive paper copies

Customer account statements are required to be sent quarterly unless the account contains

penny stocks

One of the concerns of a registered representative (RR) is complying with the anti-money laundering (AML) rules promulgated under the Bank Secrecy Act. There are several stages to money laundering, and it is generally agreed that the one where money laundering is most easily detected is

placement

If 3 individuals have a tenants in common (TIC) account with your firm and one individual dies, then

the 2 survivors continue as co-tenants with the descendant's estate

When a client makes a trade, industry rules require that a confirmation be delivered no later than completion of the trade. Included on that confirmation would be all of the following information EXCEPT

the number of bonds in the transaction

All of the following would be legal investments in an IRA EXCEPT

whole life insurance issued by the ABC Life Insurance Company