Customer Accounts

A customer sells short 1,000 shares of XYZ at $60 in a margin account, regular way settlement. Two days after the trade, XYZ has dropped to $40. The minimum maintenance margin requirement is:

$12,000

When opening an options account, the customer must return the signed Options Agreement:

15 days after opening the account

Which statement is TRUE regarding initial and minimum maintenance margins for a long margin account?

Maintenance margin is 25%

Which of the following signatures must appear on the New Account Form when a customer has provided information over the phone?

Manager and Registered Representative

A customer makes a purchase of $22,100 of ACME Income Fund in her margin account. The customer must deposit:

$22,100

A customer shorts 1,000 shares of ABC stock @ $5 per share in a margin account. The customer must deposit:

$5,000

All of the following non-exempt securities are marginable EXCEPT:

securities included in the Pink Sheets

In order to open a new account for an individual customer, which information is NOT required on the new account form?

Highest school grade level completed

Prior to opening an options account, which of the following steps is NOT required?

Receiving the signed options agreement from the customer

What is a TRUE statement?

Regulation U controls credit from bank to broker

Under the requirements of the USA PATRIOT Act, if a member firm suspects that an account is engaging in money laundering, the firm is obligated to file a(n):

SAR

Which transaction can only be performed in a margin account?

Sale of a naked call

An employee of a CBOE member firm wishes to open an options account at another CBOE member firm. Which statement is TRUE?

Prior written approval must be obtained from the employer member

The FINRA suitability rule requires all of the following EXCEPT:

Qualitative Suitability

The minimum maintenance margin requirement for long stock positions is:

25% of the closing price of the security that day

Generally, new issues cannot be margined for the:

30 day period following issuance

The minimum maintenance margin for short stock positions is set at:

30% of the short market value

Under Regulation T, an extension for payment may FIRST be requested, under extraordinary circumstances, on the:

4th business day after trade date

What are the initial and minimum maintenance margins for stock positions in long accounts?

50 / 25

What are initial and minimum maintenance margins for stock positions in a short margin account?

50 / 30

The Regulation T initial margin requirement for long stock positions is:

50%

The Regulation T initial margin requirement for short stock positions is:

50%

To buy a listed stock in a margin account requires a deposit of:

50% of the price of the transaction

Under Regulation T, if no payment for a trade is received, the account is "frozen" for how many days?

90 days

A registered representative that has completed the certified financial planner designation has a customer base consisting mainly of senior citizens. The registered representative may refer to him- or herself as a:

"Certified Financial Planner"

A FINRA member firm uses a structure for its wealthy client group where a "team" of registered representatives with differing specializations services those accounts. This is:

permitted only if the firm documents name, role, and responsibilities of each member of the team

If an investor wishes to open a margin account, which paperwork is typically NOT required?

ACATS Form

Which of the following is NOT personal information related to a customer account?

Aggregated information about activities in all customer accounts at that broker-dealer

Which statement is FALSE when comparing a full power of attorney given in a brokerage account to a limited power of attorney?

Both can draw checks on the account

Interest charges on customer debit balances are based on the:

Broker Loan rate

Which joint account CANNOT be opened?

Business partner and business partner

In order to independently verify the identity of a corporation that wishes to open a brokerage account, which documentation is acceptable?

Certified articles of incorporation

Deposits of which of the following by a customer would NOT be indicators of potential money laundering?

Checks drawn on U.S. banks

If a customer does not return a signed options agreement, which statement is TRUE?

Closing transactions are permitted in the account

A customer has opened a margin account and has signed both the hypothecation agreement and the loan consent agreement. The brokerage firm can do all of the following with the customer's securities EXCEPT:

Commingle the customer's securities with securities owned by the brokerage firm

Under FINRA rules, all of the following are necessary to open a corporate account EXCEPT:

Corporate Minutes

Additional supporting documentation is needed to open all of the following customer accounts EXCEPT a:

Custodian Account

All of the following are types of joint accounts EXCEPT:

Custodian for a minor

Which transaction is subject to Regulation T?

Customer borrowing from a broker using securities as collateral

Call loans made by bank to broker-dealers are secured by which of the following?

Customer margin securities

Which of the following information is NOT required to be verified with the customer every 36 months?

Date of birth

Which of the following best describes "structuring"?

Depositing or withdrawing cash to or from an account in amounts just below Federal reporting requirements

All of the following are types of accounts in which securities transactions can be effected under Regulation T EXCEPT:

Discretionary account

All of the following procedures are required to open an account for an employee of another municipal securities firm EXCEPT:

Duplicate account statements must be sent to the municipal employer

Which statement is TRUE regarding joint accounts?

If a party in a Tenancy in Common account dies, his or her share is included in his taxable estate

Under MSRB rules, to make a suitable recommendation, the registered representative must have sufficient knowledge of the customer. Regarding recommendations to a customer, which statement is TRUE?

If the customer insists upon executing an unsuitable trade, the registered representative should execute the trade, note his or her exception to the trade in the client file, and mark the order ticket as "unsolicited"

Which statement is TRUE?

Regulation T only applies to non-exempt securities

Regulation U controls credit from:

bank to broker

All of the following statements are true about a member firm's Business Continuity Plan EXCEPT the BCP must:

be provided to customers every 36 months after the account is opened

The requirement for independent verification of a customer's identity when opening an account CANNOT be satisfied by examining a copy of the customer's:

birth certificate

All of the following transactions are permitted in a custodian account EXCEPT the:

short sale of common stock

In order to open a discretionary cash account, all of the following are required EXCEPT:

signed customer's agreement

To determine the suitability of recommendations made to a customer, inquiry should be made about all of the following EXCEPT:

Educational background

The minimum maintenance margin requirement for long stock positions is:

25%

Who can give trading authorization to another party in a brokerage account?

A second party can give trading authorization to a first party

Under FINRA rules, initial approval of new accounts, in writing, is performed by the:

General Principal

Credit from bank to broker is controlled under:

Regulation U

In a joint tenants with rights of survivorship account:

if one party dies, the other party wholly owns the account

Under FINRA rules, numbered accounts are:

permitted if the firm maintains a written statement of the customer attesting to ownership

To open a partnership account, the social security number(s) or tax identification number to be used is (are) the number(s) of:

the partnership

A customer that wishes to open a new account is asked by the registered representative for a government issued photo identification. The customer gives the representative a copy of his driver's license, which the representative notes has expired 3 months ago. Which statement is TRUE?

As long as another non-documentary method is used to verify the customer's identity, the account can be opened

The rules of the options exchanges require that if a customer's financial condition changes materially, which of the following must be amended?

Options Agreement

A customer buys 100 shares of ABC stock at $60 as an initial transaction in a margin account. At the end of the day, the stock is worth $50. The customer must deposit:

$3,000

A customer buys 100 shares of ABC stock at $70 as an initial transaction in a margin account. At the end of the day, the stock is worth $80 per share. The customer must deposit:

$3,500

A customer must be sent which of the following at, or prior to, opening an options account?

Options Disclosure Document

A customer buys 100 shares of ABC stock at $10 as an initial transaction in a margin account. The customer must deposit:

$1,000

A customer buys 1,000 shares of XYZ at $60 in a margin account, regular way settlement. Two days after the trade, XYZ has dropped to $40. The minimum maintenance margin requirement is:

$10,000

A customer buys 100 shares of ABC stock at $30 as an initial transaction in a margin account. The customer must deposit:

$2,000

A customer sells short 100 shares of ABC at $15 as an initial transaction in a new margin account. The customer must deposit:

$2,000

A customer sells short 100 shares of ABC at $17 as the initial transaction in a new margin account. The customer must deposit:

$2,000

As an initial transaction in a new margin account, a customer buys 100 shares of ABC at $35. The customer must deposit:

$2,000

As the initial transaction in a new margin account, a customer sells short 100 shares of DEF stock at $26 per share. The customer must deposit:

$2,000

A customer sells short 1,000 shares of ABC stock at $1.50 per share in an initial transaction in a new margin account. The customer must deposit:

$2,500

A customer sells short 1,000 shares of ABC stock at $2 in a margin account. The customer must deposit:

$2,500

A customer sells short 100 shares of ABC stock at $50 as an initial transaction in a margin account. At the end of the day, the stock has fallen to a price of $40 per share. The customer must deposit:

$2,500

A customer buys 1,000 shares of XYZ at $60 in a margin account, regular way settlement. Two days after the trade, XYZ has risen to $80. The minimum maintenance margin requirement is:

$20,000

A customer sells short 1,000 shares of XYZ at $60 in a margin account, regular way settlement. Two days after the trade, XYZ has risen to $80. The minimum maintenance margin requirement is:

$24,000

The maximum amount of customer securities that can be rehypothecated by a broker is:

140% of the debit balance

Under Regulation T, the time period granted by FINRA for an extension of payment on monies due is:

2 business days

Brothers Joe and John have a joint account with tenants in common. Which statement is TRUE regarding the activities in the account?

Orders may be entered into the account by Joe only or John only

All of the following information is needed to open a new cash account EXCEPT:

A list of external brokerage account holding

Which of the following BEST describes a guardianship account?

An account for an individual declared incompetent in a court proceeding

All of the following are types of fiduciary accounts EXCEPT:

Partnership Account

All of the following are types of joint accounts EXCEPT:

Partnership account

To open a cash account for a partnership, in addition to the new account form, which document is required?

Partnership agreement

Under the requirements of the USA PATRIOT Act, when opening a new account for a non-resident alien, which of the following must be obtained from the customer?

Passport number

When an account is frozen, which statement is TRUE?

Payment in advance is required for purchases occurring in the next 90 days

Which of the following is a TRUE statement about discretionary accounts?

Power of attorney must be obtained in writing from the customer before discretion can be exercised

Regulation T applies to which of the following:

Preferred stocks traded over-the-counter

To open an options account, inquiry must be made regarding all of the following aspects of the customer EXCEPT:

Education

Regarding arbitration agreements between member firms and customers, which statement is FALSE?

FINRA requires each customer to sign an arbitration agreement as part of the account opening process

Which regulator is responsible for enforcing provisions of the Bank Secrecy Act and the PATRIOT ACT?

FinCEN

All of the following persons can approve the opening of an account under MSRB rules EXCEPT the:

Financial and Operations Principal

Under FINRA rules, to ascertain which investments are suitable for a customer, the registered representative would inquire about all of the following EXCEPT:

Health status

A registered representative is allowed to choose which of the following in a transaction without requiring written trading authorization from the customer?

Price and time

How must an account opened under the Uniform Gifts to Minors Act be titled?

In the name of the custodian for the minor

Which of the following is NOT considered to be personal information about a customer account?

Internet cookies from visits to other firms' websites

Unless specific authorization is given, all of the following accounts cannot be opened as margin accounts EXCEPT a:

Joint Tenants Account

Which type of account is NOT required to follow the "Prudent Investor" rule?

Joint account

To open a margin account for a partnership, all of the following documentation is required EXCEPT:

Joint account agreement

Which of the following information is NOT needed to open a new customer account?

Liquid net worth of the customer

Which of the following securities can be purchased on margin?

Listed Corporate Bond

All of the following may be purchased on margin EXCEPT:

Listed stock options

What document, once signed, permits a broker dealer to borrow customer securities to effect short sales for other clients?

Loan consent agreement

Mr. Jones, a New York resident, is a widower with a 6 year old son. He opens an account for the son under the Uniform Gifts to Minors Act. Three years later, Mr. Jones remarries, and moves to California, a community property state. Under what conditions can Mrs. Jones enter orders into the UGMA account?

Mrs. Jones can not enter orders into the account under any circumstances

If an investor does not pay within the time period specified under Regulation T, all of the following statements are true EXCEPT:

No trading is permitted in the account for 90 days

A corporation is preparing a registration statement for a new issue offering consisting of 300,000 new shares and 200,000 existing shares held by officers. Which statement is TRUE?

None of the shares can be purchased on margin

A 79-year old widowed client telephones you, her representative, telling you the following: "I just received a phone call telling me that I have won the Mega Millions International Lottery, and that in order to release my winnings, I must wire $10,000 to pay for the international taxes due." She gives you the international wiring instructions and directs you to send out the wire. What action should you take?

Notify the trusted contact person on the account, who is listed as the client's daughter, and place a hold on the requested wire transfer

Who creates the list of SDNs that must be checked when opening an account for a foreigner or foreign entity?

OFAC

What is an acceptable way to open a brokerage account for an Investment Adviser?

Separate client accounts with a power of attorney given by each client to the broker dealer who will then oversee the investment adviser

Under Regulation T, an extension for payment may be requested on:

Settlement Date + 2

Which transaction may NOT be performed in a cash account?

Short sale of stock

In order to open a discretionary margin account, which of the following is NOT required?

Signature of Customer on New Account Form

All of the following are needed to open a cash account for a customer EXCEPT:

Signature of customer

A registered representative ("RR") has entered an order to buy 100 shares of ABC at $50 per share for a customer. The transaction is executed at $50 per share, and when the representative is reporting the trade to the customer, she notices that the account number on the executed order ticket is wrong. Which statement is TRUE?

The "RR" may change the account number on the order ticket to the correct number if the branch manager approves in writing

A client has an options account that is qualified to buy options and sell covered calls. The client calls his representative, telling him that he wants to sell naked calls in the account. Which statement is TRUE about this?

The "Special Statement for Uncovered Options Writers" must be provided before executing the transaction

An individual comes into your firm to open a cash account. When completing the new account form, the customer responds to the question "What is your age?" by stating "I am 15 years old." Which statement is TRUE?

The account can be opened by an adult as custodian for this person

An aunt wishes to open a custodian account to give a gift to her minor niece. Which statement is TRUE?

The account can be opened without restriction

A potential customer has visited the registered representative's branch office and is ready to open an account. The representative asks to see the customer's driver's license and the customer says "I will show it to you, but you cannot photocopy it - I am worried about identity theft." Which statement is TRUE?

The account cannot be opened unless the firm independently verifies the customer's identity using the driver's license information or another non-documentary method

Which statement is TRUE about a minor in a custodian account under UGMA (Uniform Gifts To Minors Act) reaching legal age?

The account must be transferred into the name of the new adult

A new customer has come into your firm to open an account. He tells you that he has recently inherited some money that he wants to invest. When completing the new account profile with the client, when you ask him for his address, he tells you that he was recently evicted, is staying at a hotel, and has no current address until he locates a new apartment. Which statement is BEST about this situation?

The address to be used for Customer Identification purposes is the address of a close relative

A new customer has come into your firm to open an account. He tells you that he is 21 years old, recently graduated from college and that he is looking for a job. He is contacting you because he recently inherited $250,000 and wants to invest it for growth and income. When you are completing the new account information, you ask him for his street address and he tells you that he was just evicted from his apartment and has moved into a long-stay hotel until he finds a new place to live. Which statement is BEST about this situation?

The address to be used for Customer Identification purposes is the address of a close relative

What is an acceptable method for opening an investment adviser account?

The adviser opens an Omnibus account holding all of his or her clients' funds and securities

A custodian account is established under UTMA in a State with a transfer age of 21. Legal age in the state is 18. At age 19, the beneficiary leaves college to go into business setting up a software company. The beneficiary wishes to use the assets in the UTMA account as "seed money" for the business. Which statement is TRUE?

The beneficiary can use the account assets only with the approval of the custodian

A member or associated person is allowed to select all of the following relating to a customer transaction without requiring a written trading authorization EXCEPT:

The security to be purchased

To open a new account for a trust, which statement is TRUE?

The tax identification number of the trust must be obtained

Which statement is FALSE regarding a customer account with a "full power" third party trading authorization?

The customer cannot designate that confirmations be sent only to the third party

A customer places an order to sell 100 shares of XYZ at the market. The initial execution report shows the trade occurring at $38.50 and this is reported to the client. The firm later discovers that the trade occurred at $38.25. Which statement is TRUE?

The customer must accept the actual sale price of $38.25

A customer places an order to buy 100 shares of ABC stock at $50 per share when the market price of the stock is at $60. The member firm fills the order at $58. By the time the error is discovered the next day, the stock is trading at $48. Which statement is TRUE?

The customer must be offered the $48 price per share

A customer places an order to sell 100 shares of ABC at the market. The initial execution report shows the trade occurring at $75.50. The firm later discovers that the trade occurred at $75.13. Which statement is TRUE?

The customer will receive $7,513 less any applicable commissions

Your customers wish to give a gift of securities to their friend's child. Which statement is TRUE?

The gift can be given in a custodian account without restriction

All of the following statements are true about opening a new margin account for the customer of an investment adviser EXCEPT:

The investment adviser must sign a margin agreement

A customer wishes to have his mail held for 6 months. Which statement is TRUE about this?

The mail can be held upon the customer's written request as long as the customer gives a valid reason for making the request

Which procedure is NOT required in order to open a new account for an individual customer?

The member firm must independently verify the validity of supporting government issued documents provided by the customer to prove identity

To open an options account, inquiry is NOT required regarding:

The name of other firms where the customer has accounts

A customer sends an e-mail to his registered representative with an order to buy 500 shares of ABCD at the market. Which statement is TRUE about accepting this order from the customer?

The order cannot be accepted because the firm cannot verify that it was the customer who actually sent the order

A registered representative takes an order from a customer to buy 100 shares of PSSS stock at $40 and writes the order ticket for processing. The registered representative fails to include the number of shares to be purchased on the ticket. Which statement is TRUE?

The order will be returned to the representative for entry of the order amount

A customer gives her registered representative instructions to buy 100 shares of XYZ stock during the trading day, if it looks attractive. As of the end of the day, the trade is not executed and the customer wants to extend the instructions through the end of the week. Which statement is TRUE?

The registered representative can do this only if the customer gives written instructions

A married registered representative with 2 children has a client who is her father-in-law. The father-in-law wants to establish a Trust account for his son (the representative's husband) and his 2 grandchildren. The grandfather wants to appoint the representative as the trustee and pay her a trustee fee. Which statement is TRUE about this?

The registered representative cannot act as the trustee because of the conflict of interest

A registered representative is soliciting a customer to purchase a security that has just been placed on his firm's "recommended" list, and which the representative feels is suitable for that customer. After discussing the recommendation, the customer is still resisting making a purchase. Which action by the registered representative is appropriate?

The registered representative should accede to the customer's wishes

A customer asks her representative for a quote on XYZ stock, which the representative informs the customer is currently $31.00 Bid - $32.10 Ask. The customer tells the representative to buy 1,000 shares at $32.10. The representative places a marketable limit order to buy. When the trade is confirmed with the representative, it shows execution at $33.10. The representative contacts the firm's operations department about this, and after making an inquiry to the exchange, the operations department determines that the exchange quotation of $32.10 was erroneous. Which statement is TRUE?

The transaction can be canceled at the discretion of the customer

A registered representative has taken an order from a customer to buy 100 shares of ABC stock @ $51 per share. The trade is executed at $57 per share and a confirmation is sent to the customer at this price. The lowest price at which the stock traded this day was $55 per share. Which statement is TRUE?

The transaction will be withdrawn from the customer's account and taken to the member's firm's account

Under FINRA rules, a written power of attorney is NOT required for a registered representative to choose which of the following order related items?

Time of execution

A registered representative solicits an order from a customer to buy 200 shares of XYZZ at $50. The customer agrees and the registered representative completes the order ticket and enters the order for execution. Once the member firm processes the order, the order ticket record must contain all of the following information EXCEPT:

Time of order solicitation

All of the following paperwork is customarily needed to open a margin account EXCEPT:

Trading authorization

TOD account registration stands for:

Transfer on Death of customer

Which of the following information is required on a individual new account form?

Type of account - cash or margin

All of following statements about the conduct of customer accounts are true EXCEPT:

Verbal trading authorizations (granting price discretion) are valid until revoked in writing

A registered representative quits her job at Broker-Dealer (BD) A and associates with BD B. The registered representative would like to maintain her existing brokerage account with BD A. Which statement is TRUE about this?

Written consent of BD B only is required

Earlier this year, a client of yours wrote a letter to the firm, requesting that his mail be held for 2 months, which your firm did. Later in the year, the customer writes another letter, asking that the mail be held for another 2 months. Which statement is TRUE about this?

You can follow the customer's written instructions and hold the mail for an additional 3 months if the letter included an acceptable reason for holding the mail

Under FINRA rules, if a member suspects that a senior citizen is being financially exploited:

a freeze can be placed for up to 15 business days on suspicious disbursements from the account, but not on other non-suspicious disbursements

All of the following information is required to open an account under FINRA rules EXCEPT:

a letter of reference for the customer

Customer account records to be kept by a registered representative under FINRA rules are:

a record by customer name or account number of each security position

A husband and wife have a joint account with a member firm. The wife calls the registered representative with instructions to liquidate their 500 share position of ABC stock. The registered representative should:

accept and execute the order as given

Information about SIPC, must be made available to customers:

at account opening only and annually thereafter

If an execution report shows that an erroneous execution has occurred, the responsibility for the trade rests with the:

brokerage firm executing the transaction

Under the provisions of Regulation T, a customer account will be frozen for 90 days if the customer:

buys a security on one day and sells the same security the next day at a profit in a cash account without depositing funds to pay for the full purchase amount

If a customer places an order with a registered representative and calls back 20 minutes later stating "Cancel the order!" If the order has not been executed, it:

can be canceled without any further action needed

A customer has been receiving confirmations and statements by mail and asks the registered representative if these can be sent by e-mail. The proper response is that this:

can be done if the customer requests by e-mail

An elderly customer has a discretionary account with your firm. The power of attorney signed by the customer for the account is non-durable. If the customer becomes mentally incapacitated, the registered representative handling the account:

can no longer effect discretionary trades for that customer

A customer has an existing cash account that holds many different positions in blue chip stocks. The customer has an investment objective of moderate growth and income. The customer contacts his representative, stating that "I think the market will be flat for a while, but I don't want to see my portfolio return drop." The registered representative recommends that the customer sell covered calls against some of the stocks held in the customer account. The representative:

cannot do so unless the account is qualified to trade options

Custodian accounts can be opened as a:

cash account only

All of the following statements are true regarding a customer account with a "full power" third party trading authorization EXCEPT:

checks drawn on the account can be made out to the customer or to the third party

To send trade confirmations to a person holding a power of attorney over a customer's account, written approval must be obtained from the:

customer

A new customer wishes to open an options account with your firm. All of the following procedures are required prior to the first trade EXCEPT the:

customer must complete an Options Agreement

Call loans made by banks to broker-dealers are secured by:

customer security positions in margin accounts held by the firm

When opening an account over the phone to trade stocks and options, all of the following signatures are needed on the new account form(s) EXCEPT:

customer signature

Short positions in margin accounts are marked to market:

daily

To open an options account, inquiry must be made into the customer's financial situation and needs in order to do all of the following EXCEPT to:

determine whether the customer should receive an Options Disclosure Document

The "convenience signer" in a "Convenience Account" has the right to:

draw checks from the account only for the benefit of the account owner

The requirement for independent verification of a customer's identity when opening an account can be satisfied by examining a copy of the customer's:

driver's license

Order ticket information must be recorded by the member firm prior to order:

entry

You have an elderly client who telephones you at the office, telling you the following: "I have been notified by certified mail that I have just won $100,000 in the Nigerian Government National Lottery, and in order to claim my prize, I need to wire $1,000 from my account to the Nigerian Lottery Overseas Bank." This client has a small individual account with your firm, where her adult daughter is named as the beneficiary. The action that you should take is:

escalate the request to a supervisor in the firm's compliance department

All of the following are allowable joint accounts EXCEPT:

father and 12-year old son

All of the following should be considered when determining the suitability of a municipal bond recommendation EXCEPT the customer's:

formal education level

A parent opens a custodian account for a 10-year old child. The grandparents donate into the account. If the investment income in the account exceeds Internal Revenue Service guidelines, the income is taxed at the:

gift and estate tax rate

The best way to ensure that a brokerage firm has an effective AML program is to:

have strong KYC procedures

FINRA defines a "customer complaint" as one that is received by the member firm:

in writing by mail

Jack Jones, age 82, has an individual account at your firm. He gives a full written trading authorization to his son, Jack Jones Jr. under a durable power of attorney. Upon the death of Jack Jones, the power of attorney:

is void

Two brothers wish to open an account at a broker-dealer. One brother will contribute $100,000 for a 25% interest and the other brother will contribute $300,000 for a 75% interest. They have stated that if one should die, then that person's share will go to a designated beneficiary. What kind of account should be opened?

joint account with tenants in common

Stock held in the custodian account is the subject of a rights offering. All of the following actions by the custodian are appropriate EXCEPT:

letting the rights expire unexercised

Interest income in a custodian account is reported on the tax return of the:

minor

Customer account statements must be sent:

monthly for accounts with trading activity and quarterly for inactive accounts

If a tenant in a joint account dies, the decedent's share is excluded from the taxable estate for accounts held as:

neither Joint Tenants with Rights of Survivorship nor Tenants in Common

The "convenience signer" in a "Convenience Account" has:

no claim on account assets upon the owner's death

A registered representative has been prospecting for new customers in neighboring states, and has contacted an individual who wishes to open an account with a $25,000 stock purchase. The customer is located 500 miles away from the representative's branch office. In order to open the account:

no physical contact is required between the customer and the registered representative, but the broker-dealer must verify the customer's identity by comparing information provided by the customer to a public database

A customer has been following the price movements of XYZ stock during this day's trading session. At 10 minutes prior to market close, the customer calls her representative and says: "Buy XYZ stock for me - get it at a good price - but make sure you get it." The customer hangs up and the representative calls the client back to ask how many shares she wants to buy, but she cannot be reached. The representative should:

not place the order

In order to open a new account for a customer, the customer's name, date of birth, address and tax identification number must be:

obtained prior to account opening and independently verified within a reasonable time before or after account opening

Under MSRB rules, a registered representative may perform a municipal securities transaction for a customer that he or she believes is unsuitable:

only at the specific direction of the customer

A married couple opens a joint margin account. The brokerage firm will send the Internal Revenue Service Form 1099 (Report of Interest and Dividends Earned) to the:

person whose social security number was given on the account form

Under the Know Your Customer Rule, in order to open and maintain a customer account, each registered representative must collect essential information so that the member firm can do all the following EXCEPT:

prevent significant losses in the account

Under the provisions of Regulation T, monies must be collected for securities purchases:

promptly

A customer that discovers an error on his or her account statement must report the error:

promptly to the member firm

A customer placed an order to buy 500 ABC @ $50. The order is filled and the execution report shows 700 shares being purchased at $50. The registered representative should:

report the situation to the branch manager for resolution

As the first trade in a new cash account, a customer buys $4,000 of securities. The customer mails a check for $3,000. When this is received by the broker, the customer is called and asked "Where is the other $1,000?" The customer responds that the check is in the mail. 2 business days later, the check does not arrive. The registered representative should:

sell enough securities to cover the $1,000 shortfall and freeze the account for 90 days

FINRA member firms are required to follow special procedures when opening accounts for all of the following EXCEPT an employee of a FINRA member firm who wishes to open a securities account at:

that firm

When opening a custodian account, the social security number to be used on the account is that of:

the minor

Recommendations by a registered representative to a customer are permitted when the:

the options agreement has not been returned within 15 days of account opening

An institutional investor will open a prime brokerage account for all of the following reasons EXCEPT:

to achieve lower commission costs by using one executing broker

When a custodian account is opened under UTMA (Uniform Transfers to Minors Act), the assets in the account must be:

transferred to the new adult at the age specified by the custodian

An indicator of potential money laundering by a customer would be:

wire transfers of $5,000 amounts out of the customer's account

A type of brokerage account where the customer is charged a single annual fee for all account services, regardless of activity in the account, is known as a:

wrap account