Quiz #4 Trading Markets

A customer places an order to sell 100 shares of ABC stock that he cannot deliver by settlement date. The order ticket should be marked: A Sell - MKT B Sell - GTC C Sell - Long D Sell - Short

D Sell - Short

Which statements are TRUE about the NYSE automated trading system? I Orders are routed directly to the Specialist (DMM) for executionII Use of the system eliminates floor brokerage feesIII Any size order can be accommodated on the systemIV Completed trades are reported electronically without the use of floor generated execution tickets

1, 2, 4

Which of the following statements are TRUE about the NYSE Super Display Booksystem? I Market and Limit orders are acceptedII There is no limitation on order sizeIII Execution reports are routed directly to the firm via computerIV Orders cannot be placed on the Specialist's book (DMM's book) through the system

1, 3

Which statements are TRUE? I TRF reports trades of NASDAQ issues listed in the NASDAQ SystemII TRF reports trades of NASDAQ issues listed in the ADFIII TRACS reports trades of NASDAQ issues listed in the NASDAQ SystemIV TRACS reports trades of NASDAQ issues listed in the ADF

1, 4

A customer wants to speculate on a market decline by selling short a thinly traded security that is on the "threshold list" without borrowing the shares for delivery on settlement. The customer should be told that: I this is a prohibited practice known as a "covered short sale"II this is a prohibited practice known as a "naked short sale"III if the security is not delivered on settlement, the security must be bought and replaced in 13 consecutive settlement daysIV if the security is not delivered on settlement, the customer's account must be frozen for 90 days

2, 3

Sell stop orders are: I placed above the current market II placed below the current market III triggered as the market rises IV triggered as the market falls

2, 4

The mandatory buy-in provision of Regulation SHO: I applies to a fail to deliver of any equity security that is sold shortII applies to a fail to deliver of a threshold list security that is sold shortIII must be completed within 3 consecutive settlement daysIV must be completed within 13 consecutive settlement days A I and III B I and IV C II and III D II and IV

2, 4

Under Regulation SHO, a "threshold" security is one that: I is easy to borrowII is hard to borrowIII cannot be sold short under any circumstances, but can be sold longIV if sold short and not delivered within 13 consecutive settlement days, it must be bought-in

2, 4

In a riskless or simultaneous transaction, which of the following statements are TRUE? I The firm is acting as agent in the transactionII The firm is acting as principal in the transactionIII The transaction must comply with the 5% PolicyIV The transaction does not have to comply with the 5% Policy

2,3

Which statements are TRUE about nominal quotes? I A nominal quote represents an actual price at which the dealer is willing to buy or sellII A nominal quote represents an approximation of market value, at which the dealer is not obligated to buy or sellIII Nominal quotes must be identified as such when givenIV No identification of a nominal quote is required when given

2,3

When comparing street name registration to direct registration: I street name registration records the owner's name on the books of the transfer agentII direct registration records the owner's name on the books of the transfer agentIII dividend and interest payments on street name securities are received from the issuer or transfer agentIV dividends and interest payments on direct registration securities are received from the issuer or transfer agent

2,4

If a customer buys a fully-paid security that is part of the DTC DRS program, the customer will receive: I physical stock certificatesII uncertificated book-entry registrationIII payments of dividends or interest from the broker-dealerIV payments of dividends or interest from the issuer or transfer agent

2.4

A dealer buys 10,000 shares of ABC common at $20 for its inventory. One week later the stock is quoted at $22 - $23, and a customer buys 100 shares from the dealer at a net price of $24. Under the FINRA 5% Policy, a fair and reasonable mark-up is based upon which price? A $20 B $22 C $23 D

23

The Secondary Market is divided into how many submarkets? 2 3 4 5

4

CQS is open between: I 9:00 AM ET II 9:30 AM ET III 6:00 PM ET IV 6:30 PM ET

9am -6:30pm ET

The ex date for stock splits and stock dividends is set at: A 1 business day after the payable date B 1 business day after the record date C 2 business days prior to payable date D 2 business days prior to the record date

A 1 business day after the payable date

A market maker enters a quote of $10.50 Bid; $10.75 Ask; with a size of "1 x 1" into the NASDAQSystem. If a market order to sell is entered into the system for 500 shares, and this dealer's quote is matched, the market maker will be obligated to buy: A 100 shares at $10.50 B 100 shares at $10.75 C 500 shares at $10.50 D 500 shares at $10.75

A 100 shares at $10.50

A market maker enters a quote of $31.50 Bid; $32.00 Ask; with a size of "3 x 5" into the NASDAQ System. If a market order to sell is entered into the system for 500 shares, and this dealer's quote is matched, the market maker will be obligated to buy: A 300 shares at $31.50 B 500 shares at $31.50 C 300 shares at $32.00 D 500 shares at $32.00

A 300 shares at $31.50

The Specialist (DMM) accepts which of the following orders on his book? A Day B Good Through Week C Good Through Month D Good Til Canceled

A Day

Which statement is TRUE about agency transactions? A In an agency transaction, a commission is charged B In an agency transaction, a mark-up or mark-down is charged C In an agency transaction, both a commission and a mark-up or mark-down are charged D In an agency transaction, neither a commission, nor a mark-up nor mark-down are charged

A In an agency transaction, a commission is charged

The SEC regulation that requires market centers to accept automated executions that do not discriminate against any class of users of their systems is: A Regulation NMS B Regulation ATS C Regulation SHO D Regulation M

A Regulation NMS

A customer places a marketable order to buy 1,000 shares of ABCD stock, an NYSE listed company. The customer directs that the trade be routed to the BATS exchange for execution and not be sent to the NYSE. Which statement is TRUE about this? A The customer's instructions are to be followed and the order must be sent to the BATS exchange B The order must be sent to the NYSE for execution C The order must be sent to the market with the largest display size D The order cannot be accepted from the customer

A The customer's instructions are to be followed and the order must be sent to the BATS exchange

Which statement is TRUE regarding a customer's order to buy 400 XYZ @ $34.50 Day placed on the New York Stock Exchange? A The order is entered on the Specialist's book (DMM's book) B The floor broker must stay with the order until it is executed C The order must be executed in full D The order must be executed at the exact price specified

A The order is entered on the Specialist's book (DMM's book)

A broker-dealer holds a limit order to buy 100 shares of ABC stock at $20.00 for a customer. Which of the following trades is an example of trading ahead of a customer? A The purchase of 100 shares of ABC for the firm's trading account at $19.50 prior to executing the customer's order B The purchase of 100 shares of ABC for the firm's trading account at $20.50 prior to executing the customer's order C The long sale of 100 shares of ABC out of the firm's trading account to the customer at $20.00 D The short sale of 100 shares of ABC out of the firm's trading account to the customer at $20.00

A The purchase of 100 shares of ABC for the firm's trading account at $19.50 prior to executing the customer's order

The only order listed that is reduced on the ex date is an open: A buy limit B buy stop C sell limit D buy limit DNR

A buy limit

All of the following dates are needed to compute the total purchase price of a municipal bond traded in the secondary market that is quoted on a yield basis EXCEPT: A dated date B maturity date C settlement date D in whole call date

A dated date

Rule 605 of Regulation NMS requires: A each market center to prepare monthly electronic reports about its quality of executions and effective spreads B each broker-dealer to prepare quarterly reports on its routing of non-directed orders, including the 10 largest venues where orders were routed C market makers in OTC stocks to display any customer limit orders that are better-priced than the dealer's own quote D any order execution facility to execute the order at the NBBO, even if that execution facility is posting an inferior quote

A each market center to prepare monthly electronic reports about its quality of executions and effective spreads

A customer owns 100 shares of an NYSE listed preferred stock and notices that the typical daily trading volume in the issue is less than 1,000 shares. The customer wants to sell the stock and asks his broker what will happen if there is no ready buyer for the stock. The broker should respond that the Specialist (DMM) on the NYSE floor: A is obligated to buy the stock at the current market B is obligated to buy the stock at the limit price, if one is specified by the customer C must look for a buyer for the shares on the NYSE floor D is not obligated to buy the stock at the market

A is obligated to buy the stock at the current market

A person who makes a secondary market in securities is called a(n): A market maker B registered representative C underwriter D retail broker

A market maker

A customer wants to buy a stock that is very liquid and wants an immediate execution. The order type that should be placed is a: A market order B limit order C stop order D not held order

A market order

Which callable municipal bond issue MUST be priced to a "refunding call" date? A premium bond callable in 5 years at 100 B premium bond callable in 5 years at 105 C discount bond callable in 5 years at 100 D discount bond callable in 5 years at 105

A premium bond callable in 5 years at 100

The "right of rejection" in a municipal bond sale refers to the: A refusal by a municipal dealer to accept a delivery of bonds tendered to that firm by another municipal securities dealer B return of municipal securities that have been previously accepted on a delivery C procedure where a municipal dealer that bought securities, but has not yet received them, can close-out the transaction D settlement method where payment is made on delivery, or, if the dealer does not have the monies, the delivery may be rejected

A refusal by a municipal dealer to accept a delivery of bonds tendered to that firm by another municipal securities dealer

An NMS stock is current quoted at $16.10 Bid - $16.30 Ask. A customer wishes to place an order to buy 1,000 shares of the stock at $16.111. The registered representative should: A refuse to accept the order B route the order to an ATS C route the order to an exchange D accept the order and round the price to $16.11

A refuse to accept the order

NASDAQ market makers that receive trades for execution are required to report: A trades within 10 seconds of execution B trades within 60 seconds of execution C each bid - ask quote disseminated D each nominal quotation given

A trades within 10 seconds of execution

Under SEC Rule 605 of Regulation NMS, market centers, in their monthly reports on order execution, must disclose all of the following information EXCEPT: A trading volumes B speed of executions C rates of price improvement D fill rates

A trading volumes

An 8% general obligation bond is issued with 20 years to maturity. A customer buys the bond on a 7.50% basis. The bond contract allows the issuer to call the bonds in 5 years at 102 1/2, with the call premium declining by 1/2 point a year thereafter. The bond is puttable in 5 years at par. The price of the bond to a customer would be calculated based on the: A 5 year call at 102 1/2 B 5 year put at 100 C 10 year call at 100 D 20 year maturity

A 5 year call at 102 1/2

An order for a New York Stock Exchange listed issue is routed by the member firm to an Electronic Communications Network (ECN) rather than to the exchange floor. This practice is permitted: A if the price offered by the ECN is better B only if the customer consents C only if an attempt to fill the order on the NYSE fails D only if the NYSE is closed

A if the price offered by the ECN is better

Customer fully paid and excess margin securities in accounts of broker-dealers are held by the: A broker-dealer B Depository Trust Corporation C National Securities Clearing Corporation D Options Clearing Corporation

B Depository Trust Corporation

An order to sell 100 shares of ABC at 50 GTC on the Specialist's book (DMM) is a: A market order B limit order C stop order D stop limit order

limit order

A market maker enters a quote of $20.50 Bid; $21.00 Ask; with a size of "5 x 5" into the NASDAQ System. If a market order to buy is entered into the system for 1,500 shares, and this dealer's quote is matched, the market maker will be obligated to sell: A 500 shares at $20.50 B 500 shares at $21.00 C 1,500 shares at $20.50 D 1,500 shares at $21.50

B 500 shares at $21.00 A market order to buy will be matched, in sequence, against the "Ask" quotes in the system, from lowest to highest. Such a market order "sweeps" the book from low to high price, until it is filled. Because this dealer's Ask of $21.00 is only for 500 shares, this is the amount that the system will match. It will then move to the next Ask quotes from other dealers, in sequence, until the order is filled for 1,500 shares

The regular hours of operation of the NASDAQ system are: A 9:00 AM - 4:00 PM ET B 9:30 AM - 4:00 PM ET C 9:30 AM - 6:00 PM ET D 9:00 AM - 8:00 PM ET

B 9:30 AM - 4:00 PM ET

Quotes placed by market participants in unlinked ECNs can be accessed through: A ATS B ADF C ACES D ACT

B ADF

Broker-dealers are permitted to execute all of the following over-the-counter transactions EXCEPT: A Agency trades where the customer is charged a fair and reasonable commission B Agency trades where the customer is charged a fair and reasonable mark-up or mark-down C Principal trades where the customer is charged a fair and reasonable mark-up or mark-down D Simultaneous transactions where both buyer and seller are charged a fair and reasonable commission

B Agency trades where the customer is charged a fair and reasonable mark-up or mark-down

A customer places an order to either buy 1,000 shares of ABC stock at 100 GTC; or to buy 1,000 shares of ABC stock at 110 Stop GTC when the market price of ABC is 104. The order is taken by the member firm's internal order system and 200 shares are filled at 100. The order that will appear on the firm's internal order system after the partial execution is: A Buy 800 ABC at 100 GTC / The order to Buy 1,000 ABC at 110 Stop GTC is canceled B Buy 800 ABC at 100 GTC / Buy 800 ABC at 110 Stop GTC C Buy 800 ABC at 100 GTC / Buy 1,000 ABC at 110 Stop GTC D Buy 1,000 ABC at 110 Stop GTC / The order to Buy 1,000 ABC at 100 GTC is canceled

B Buy 800 ABC at 100 GTC / Buy 800 ABC at 110 Stop GTC

Regular way trades of all of the following securities settle "next business day" EXCEPT: A Options B U.S. Government Bonds C U.S. Government T-Bills D Municipal Debt

D Municipal Debt

Which statement is TRUE about the Gray Market? A It is the trading venue for unsponsored ADRs B It is illiquid and nontransparent C It is not subject to regulation by FINRA D It is another name for a Dark Pool

B It is illiquid and nontransparent

An OTC confirmation that discloses the remuneration to be received by the member and which makes available to the customer the name of the contra-broker is required for: A Non-NASDAQ principal trades B Non-NASDAQ agency trades C position trades D primary trades

B Non-NASDAQ agency trades

On ex dividend date, which orders are reduced for cash dividends? A Orders placed above the current market B Orders placed below the current market C Orders placed at the current market D All of the above

B Orders placed below the current market

A member firm receives a large block order to buy 100,000 shares of XYZ stock, which is not actively traded. Which customer(s) of the firm can buy XYZ stock prior to the filling of the block trade? A The registered representative who received the order B Other customers of the firm who place buy orders, if the firm has information barriers in place C Any customer of the firm who places an unsolicited order D No customer can buy the stock until the block order to buy is filled

B Other customers of the firm who place buy orders, if the firm has information barriers in place

All of the following information appears on a municipal bond trade confirmation EXCEPT: A Agency or principal capacity B Paying agent name C Broker-dealer name D Accrued interest

B Paying agent name

DEFF stock is currently trading at $24, down $4 from yesterday's close. A client places a market order to short 100 shares of DEFF. Which statement is TRUE? A The order cannot be accepted because the stock has declined by more than 10% during the trading day B The order can be accepted, but can only be filled on an up-bid C The order can be accepted, but can only be filled if the stock is not on the threshold list D The order can be accepted and filled without conditions

B The order can be accepted, but can only be filled on an up-bid

A simultaneous trade is performed on the OTC market. Under FINRA rules, the transaction is: A prohibited B allowed and must conform to the 5% Policy C allowed if a commission or mark-up is only charged on one side of the transaction D allowed if the combined mark-up does not exceed 8 1/2%

B allowed and must conform to the 5% policy

An OTC equity trader has received a large influx of sell orders for ABC stock and, to fill them, has taken an extremely large long position in the firm's inventory account. The dealer would most likely: A decrease the ask price in the OTCBB B decrease the bid price in the OTCBB C decrease the mark-down to customers that sell D place an "OW" in the OTCBB

B decrease the bid price in the OTCBB

An order ticket to sell 100 shares of ABC short means that the seller will: A deliver shares that are owned on settlement date B deliver shares that are borrowed on settlement date C not deliver shares on settlement date, but will deliver a due bill instead D not deliver shares on settlement date, but will deliver the shares on a future date

B deliver shares that are borrowed on settlement date

Rule 606 of Regulation NMS requires: A each market center to prepare monthly electronic reports about its quality of executions and effective spreads B each broker-dealer to prepare quarterly reports on its routing of non-directed orders, including the 10 largest venues where orders were routed C market makers in OTC stocks to display any customer limit orders that are better-priced than the dealer's own quote D any order execution facility to execute the order at the NBBO, even if that execution facility is posting an inferior quote

B each broker-dealer to prepare quarterly reports on its routing of non-directed orders, including the 10 largest venues where orders were routed

The "trade-through" rule of Regulation NMS: A prohibits an order from being routed to a market that will pay for the order B prohibits a market maker on an exchange from executing a trade at an inferior price to that posted by another market at that moment C requires member firms to execute any order received within 1 second of execution D requires member firms to use automated clearing and settlement of all trades

B prohibits a market maker on an exchange from executing a trade at an inferior price to that posted by another market at that moment

Under SEC Rule 606 of Regulation NMS, broker-dealers are required to compile statistical information on routing of customer non-directed orders to market venues, and make this information available to customers: A monthly B quarterly C semi-annually D annually

B quarterly

The "right of reclamation" in a municipal bond sale refers to the: A refusal by a municipal dealer to accept a delivery of bonds tendered to that firm by another municipal securities dealer B return of municipal securities that have been previously accepted on a delivery C procedure where a municipal dealer that bought securities, but has not yet received them, can close-out the trade D settlement method where payment is made on delivery, or, if the dealer does not have the monies, the delivery may be rejected Review

B return of municipal securities that have been previously accepted on a delivery

If a customer sells short a security that is on the "threshold list" and the member firm fails to deliver the security on settlement, the: A customer's account will be frozen for 90 days B security must be bought-in no later than 13 consecutive settlement days from trade date C customer's account must be restricted under Regulation T D customer's margin requirement will be increased from 50% to 100% of the sale amount

B security must be bought-in no later than 13 consecutive settlement days from trade date

The Master Manufacturing Company has just announced a tender offer for its own common stock. Master is offering to buy up to 100% of the company's stock at $20 per share contingent on at least 64% of the outstanding shares being tendered. After the announcement of the offer, the stock closed on the NYSE up 2.50 at $18.75. A customer has 100 shares of Master stock in his cash account. The customer tells you that he wishes to "cash out" his position. You should recommend that the customer: A tender the shares B sell long C sell short D hold the shares for a better offer

B sell long

Stocks that are listed on the New York Stock Exchange can also typically be listed and traded on: A the American Stock Exchange (NYSE American) B the Chicago (Midwest) Stock Exchange C the Chicago Board Options Exchange D Instinet

B the Chicago (Midwest) Stock Exchange

Third Market Makers must report their trades of exchange listed stocks to the Consolidated Tape: A within 10 seconds of execution during all hours of the day B within 10 seconds of execution during the hours that the NYSE is open C at the close of the trading day D at the opening of the trading day

B within 10 seconds of execution during the hours that the NYSE is open

Which municipal bond quoted on a yield basis MUST be priced to the "refunding call" date? A 6% coupon; 7% basis; callable at 100 B 6% coupon; 7% basis; callable at 105 C 8% coupon; 7% basis; callable at 100 D 8% coupon; 7% basis; callable at 105

C 8% coupon; 7% basis; callable at 100

XYZ Corporation announces a 10% stock dividend, followed by a 5% "spin off" of a subsidiary business. A customer who owns 200 shares of XYZ will receive: A 20 shares of XYZ and 10 shares of the spin-off B 10 shares of XYZ and 10 shares of the spin-off C 20 shares of XYZ and 11 shares of the spin-off D 20 shares of XYZ and cash equal to 5% of the value of the spin-off

C 20 shares of XYZ and 11 shares of the spin-off

A due bill is used to: A reclaim a mutilated stock certificate B assign a stock certificate to a new owner C claim a dividend that is sent to the wrong person D claim against a brokerage firm in an arbitration proceeding Review

C

All of the following statements are true regarding the FINRA 5% Policy EXCEPT: A Under the policy, a 1% mark-up can be considered to be excessive B The policy applies to both over-the-counter agency and principal transactions C The policy applies to mutual fund and initial offerings of direct participation program D Municipal securities transactions are not subject to the policy

C

A trade is considered to be a "block trade" if the amount is for a minimum of: A 100 shares B 1,000 shares C 10,000 shares D 100,000 shares

C 10,000 shares

Which of the following describes an "agency cross" transaction? A A customer directs the broker to sell one stock and use the proceeds to buy another B A dealer receives a buy order from a customer and the dealer purchases stock into inventory and resells it to a customer C A market order to buy and a market order to sell come in at the same time from two different customers for the same stock and amount and are matched D A stock is bought and an equivalent security is simultaneously sold short

C A market order to buy and a market order to sell come in at the same time from two different customers for the same stock and amount and are matched

The system that compares trades of NASDAQ issues and reports the trades to the Network C Tape is called: A ACES B OATS C ACT D ADF

C ACT

Which of the following securities can be traded using the NASDAQ Market Center Execution System (Single Book)? A NASDAQ Global Market issues B NASDAQ Capital Market issues C All NASDAQ issues D All securities trading in the secondary market

C All NASDAQ issues

What entity was created to provide clearing and settlement efficiencies by immobilizing securities and to make "book entry" changes to ownership of securities? A FRB B OCC C DTC D PSA

C DTC

GE Corporation has declared a cash dividend to stockholders of record on Tuesday, November 22nd. The last day to buy GE shares BEFORE they go ex dividend is? A Wednesday, November 16th B Thursday, November 17th C Friday, November 18th D Monday, November 21st

C Friday, November 18th

When ABC stock is trading at $40.50, an equity trader places an order to buy 500,000 shares of the stock at 3:58 PM ET, filled at $40.60, and places another order to buy 400,000 shares at 3:59 PM filled at $40.90. Because of these actions, the stock closes at $41. The equity trader then uses those purchased shares to fill Market-On-Close orders to buy that the firm was holding for clients. This is an example of: A Insider trading B Front running C Marking the close D Painting the tape

C Marking the close

Super Display Book is the automated trading system for the: A NASDAQ Stock Market B American Stock Exchange (NYSE American) C New York Stock Exchange D Instinet Stock Market

C New York Stock Exchange

An option trade confirmation discloses all of the following EXCEPT: A Type of option and name of underlying security B Expiration and strike price C Open interest and trading volume D Execution price and commission

C Open interest and trading volume

A client believes that XYZZ stock has topped out in price and is ready for a steep drop. What recommendation would give the customer the smallest profit if this occurs? A Buy an XYZZ put option B Sell short XYZZ stock C Sell an XYZZ call option D Buy 1 XYZZ warrant

C Sell an XYZZ call option

Which statement is TRUE about the NASDAQ Regular Market trading session? A The session starts earlier than the NYSE opening B The session ends later than the NYSE closing C The session coincides with NYSE trading hours D The session starts later than the NYSE opening and closes later than the NYSE closing

C The session coincides with NYSE trading hours

A sell order for a customer is considered to be "long" if the customer is long: A a call option on the stock being sold that has not yet been exercised B the stock and will not deliver the shares on settlement C a convertible bond that has been converted into the stock being sold for delivery on settlement D a warrant on the stock being sold that has not yet been exercised

C a convertible bond that has been converted into the stock being sold for delivery on settlement

The "OATS" system is an: A automated order routing and execution for customer market orders B electronic trade negotiation system between dealers C electronic order record maintenance system D automated trade reporting and comparison system

C electronic order record maintenance system

The inside market "NBBO, National bid best offer" found on NASDAQ Level I, is the: A lowest bid and lowest ask B lowest bid and highest ask C highest bid and lowest ask D highest bid and highest ask

C highest bid and lowest ask

Over-the-counter dealers are also called: A registered representatives B specialists (DMMs) C market makers D two-dollar brokers Review

C market makers

A customer places an order with a member firm that is "Good through the month." The person responsible for canceling the order if it remains unexecuted after the month is up is the: A customer B Specialist (DMM) C member firm D NYSE

C member firm

Under MSRB rules, yield to worst means that: A all municipal bonds quoted on a yield basis must be priced to maturity B municipal par bonds quoted on a yield basis must be priced to maturity C municipal discount bonds quoted on a yield basis must be priced to maturity D municipal premium bonds quoted on a yield basis must be priced to maturity

C municipal discount bonds quoted on a yield basis must be priced to maturity

Under the FINRA 5% Policy, proceeds transactions are subject to: A one mark-up based on the sell side only B one mark-up based on the buy side only C one mark-up based on the buy and sell side combined

C one mark-up based on the buy and sell side combined

An investor owns 200 shares of a stock that has split 2 for 1. The investor will get the additional 200 shares by: A redeeming the old certificate with the transfer agent and receiving a new certificate for 400 shares B submitting a due bill for the additional 200 shares C receiving a new certificate for 200 shares and a sticker to place on the old certificate with the new par value per share D obtaining a letter of validation from the transfer agent stating that the certificate now covers 400 shares

C receiving a new certificate for 200 shares and a sticker to place on the old certificate with the new par value per share

Under the FINRA 5% Policy, all of the following would be considered when determining a fair and reasonable mark-up to a customer in an over-the-counter principal transaction EXCEPT the: A size of the purchase B cost of the security to the dealer C relative frequency of trades in that security D current market price of the security

C relative frequency of trades in that security

All of the following trade securities on the New York Stock Exchange EXCEPT: A Two dollar broker B Floor brokers C Specialist (DMM) D Registered Representative

D Registered Representative

A floor broker enters the crowd around the Specialist's (DMM's) post to buy 20,000 shares of ABC at the market for a public customer. The Specialist (DMM) tells the trader "20,000 shares of ABC have been stopped at 25." This means that: A trading in the stock has been completely stopped B the stock can not trade higher than $25 per share C the Specialist/DMM has guaranteed a price of $25 to the trader D the trader is prohibited from buying at any price other than $25

C the Specialist/DMM has guaranteed a price of $25 to the trader

OTC securities that are not currently quoted in the OTCBB or Pink OTC markets are: A traded on regional stock exchanges B traded in the black market C traded in the gray market D not permitted to be traded

C traded in the gray market

A customer has entered a day order to buy 500 shares of ABC stock at $21 on the NYSE. Later in the same day, the customer tells the broker to change the order to GTC. The registered representative should: A immediately cancel the old order and enter the new order B immediately enter the new order, leaving the old order undisturbed C wait till the end of the day, and if the existing order was not executed, enter the new order D enter a change order directing the Specialist/DMM to change the order duration Review

C wait till the end of the day, and if the existing order was not executed, enter the new order

If a municipal bond, callable at par, is quoted on a yield basis that is lower than the nominal yield, the price of the bond to a customer would be calculated based on: A nominal yield B current yield C yield to call D yield to maturity

C yield to call

A new customer calls a representative and says the following: "I own 1,000 shares of DEF stock, which is currently held at another broker-dealer. I want to sell the shares at the market." The representative accepts the order from the customer. The order ticket should be marked: A long sale B long sale - exempt C short sale D short sale - exempt

C Short sale

Regulation NMS required market centers to do all of the following EXCEPT: A electronically link and make quotes accessible in real time B provide for automated execution at the best price within 1 second C execute all short sales on stocks that are declining in price on an up bid D put procedures in place to prevent trade-throughs

C execute all short sales on stocks that are declining in price on an up bid

Which of the following first markets does NOT trade stocks? A NYSE B AMEX (NYSE American) C PHLX D CBOT E CME

CBOT (Chicago board of trade) is futures market

All of the following are requirements for a company to move its listing from another market to the NYSE EXCEPT: A 2,200 shareholders B Average monthly trading volume of 100,000 shares C $100,000,000 aggregate market value of outstanding shares D Minimum dividend payout of $5 per share E Minimum debt to equity ratio of 50%

D Minimum dividend payout of $5 per share E Minimum debt to equity ratio of 50%

A corporation is making a tender offer for all of its common shares. Which of the following customers CANNOT tender the shares? A Customer A, who is long 100 shares of ABC in a custodial account B Customer B, who is long 100 shares of ABC in a cash account C Customer C, who is long 200 shares of ABC, and short 100 shares of ABC in a margin account D Customer D, who is long 100 shares of ABC, and short 200 shares of ABC in a margin account

Customer D, who is long 100 shares of ABC, and short 200 shares of ABC in a margin account

hich of the following is NOT a feature of the NASDAQ System (Single Book)? A Both agency and proprietary orders are accepted B Orders may be split to get the best execution C A reserve quote feature allows automatic quote updating D 30 seconds must elapse between each automatic trade execution

D 30 seconds must elapse between each automatic trade execution

Which of the following describes a riskless principal or simultaneous transaction? A Selling a security and using the proceeds to purchase a different security B Buying a security into inventory direct from a customer with a mark-down C Buying and simultaneously selling short the same security in different markets to lock in a price differential D After receiving a buy order, the dealer purchases the stock into inventory and resells it to a customer

D After receiving a buy order, the dealer purchases the stock into inventory and resells it to a customer

A client believes that XYZZ stock has bottomed in price and is ready for a steep rebound. Which recommendation has the lowest profit potential? A Buy an XYZZ call option B Buy XYZZ rights C Buy XYZZ warrants D Buy XYZZ stock and sell an XYZZ call

D Buy XYZZ stock and sell an XYZZ call

All of the following are arbitrage transactions EXCEPT: A Buy a security on the NYSE / Sell that security on the PHLX B Buy a convertible bond on the NYSE / Sell the common stock of the same issuer on the NYSE C Buy the stock of one company that is the target of a tender offer / Sell the stock of the company that is making the offer D Buy a security on the NYSE / Sell that security on the NYSE

D Buy a security on the NYSE / Sell that security on the NYSE

All of the following can result in the establishment of a short position EXCEPT: A Arbitrage transaction B Sale of a security "against the box" C Position trades of borrowed shares D Selling a long position

D Selling a long position

Comparing the first and second markets, which statement is FALSE? A The First Market is an auction market B The Second Market is a negotiated market C The First Market has listing standards D The Second Market has listing standards

D The Second Market has listing standards

A customer places an order to sell 500 ABC at $50 on the NYSE, "Immediate or Cancel." The order to sell reaches the trading post at the same time as a buy order for 300 shares of ABC at $50. Assuming that the Specialist/DMM does not fill the remaining 200 shares at that price, which statement is TRUE? A The order will not be executed since all 500 shares cannot be sold and is canceled B The order will not be executed since all 500 shares cannot be sold, but the floor trader can try re-execution at a later time C The order will be executed for 300 shares, with the unexecuted portion (200 shares) remaining open on the Specialist's (DMM's) book D The order will be executed for 300 shares, with the unexecuted portion (200 shares) canceled

D The order will be executed for 300 shares, with the unexecuted portion (200 shares) canceled

A member that has knowledge of a client order that has not been entered on a marketplace that could reasonably be expected to affect the market price of the security is prohibited from all of the following EXCEPT: A entering a proprietary order for the purchase or sale of that security B soliciting an order from another person for the purchase or sale of that security C informing any other person, other than in the necessary course of business of the client order D accepting an unsolicited order to buy from a client

D accepting an unsolicited order to buy from a client

Buy stop orders can be used for all of the following reasons EXCEPT to: A protect a profit on short positions B limit loss on short positions C acquire stock if a resistance level is broken D acquire stock if a support level is broken

D acquire stock if a support level is broken

A customer places an order with a registered representative to sell 5,000,000 shares of ABC stock (NYSE listed) "at the market." The registered representative should: A submit the order B contact the Specialist/DMM on the trading floor C contact a Third Market Maker D contact the firm's large block trading desk

D contact the firm's large block trading desk

A trade confirmation for an Over-The-Counter Bulletin Board stock shows the following: "We sold to you 100 shares of XXXX @ $7 Net" In this transaction, the member firm acted as a(n): A agent, and charges a commission in addition to the Net price B agent, and charges a commission included in the Net price C dealer, and charges a mark-up in addition to the Net price D dealer, and charges a mark-up included in the Net price

D dealer, and charges a mark-up included in the Net price

A Specialist (DMM) on the NYSE is quoting ABC stock as follows: $50.05 - $50.06 30 x 60 The Specialist/DMM receives an order via Super Display Book to buy 6,000 shares of ABC at the market. The Specialist/DMM will: A place the order on his book for execution B fill 3,000 shares at $50.05 and place the unfilled portion of the order on his book C fill 6,000 shares at $50.05 D fill 6,000 shares at $50.06

D fill 6,000 shares at $50.06

All of the following statements are true about "odd lot" transactions EXCEPT: A orders for odd lot amounts have no standing on the NYSE trading floor B an odd lot is an order for less than the normal trading unit of 100 shares C odd lot transactions are handled by the Specialist (DMM) D odd lot commissions are set by the NYSE

D odd lot commissions are set by the NYSE

The Specialist (DMM) performs all the following functions EXCEPT: A trades for his own account B executes orders for other brokers C executes odd lot orders D participates in new issue syndicates

D participates in new issue syndicates

A trader enters an order to buy ABCD stock into NASDAQ at 5 cents higher than the current best bid, establishing a new best bid, and then immediately cancels the order. This is a prohibited practice known as: A front running B interpositioning C trading within the inside market D spoofing

D spoofing

All of the following orders can be placed in the NASDAQ System (Single Book) EXCEPT: A market order B marketable limit order C limit order D stop orders

D stop orders

A "Right of Rejection" can be used when: A the buyer accepts delivery of securities that later prove to have a problem B the seller refuses to deliver securities by the settlement date C a trade settles after the record date and the buyer refuses to accept the securities because the price has fallen D the buyer refuses to accept securities on the settlement date because there is a problem with the securities

D the buyer refuses to accept securities on the settlement date because there is a problem with the securities

If a municipal bond, callable at par, is quoted on a yield basis that is higher than the nominal yield, the price of the bond to a customer would be calculated based on: A yield to call B yield to put C current yield D yield to maturity

D yield to maturity

Regular way trades of which of the following securities settle "next business day"? I U.S. Government debtII Listed stockIII Municipal debtIV Listed options

I U.S. Government debt IV Listed options

Which statement is TRUE? A AON orders can be executed in part or in full B FOK orders can be executed in part or in full C AON orders are canceled if the entire order is not executed on one attempt D FOK orders are canceled if the entire order is not executed on one attempt

FOK orders are canceled if the entire order is not executed on one attempt

A trade takes place directly between a bank and an insurance company without the use of a broker. This trade took place in the: A First Market B Second Market C Third Market D Fourth Market

Fourth Market (btw institutions)

Which call covenants MUST be considered when computing the dollar price of a municipal bond quoted on a yield basis? I "In Whole" Call II Sinking Fund Call III Extraordinary Optional Call IV Calamity Call

I "In Whole" Call

Which orders guarantee price but not execution? I Buy Limits II Buy Stops III Sell Limits IV Sell Stops

I Buy Limits III Sell Limits

Which orders, if executed guarantee a specific price or better? I Buy Limits II Buy Stops III Sell Limits IV Sell Stops

I Buy Limits III Sell Limits

Which of the following securities are ACTIVELY traded in the Over-The-CounterMarket? I Common stocks II U.S. Government bonds III Real Estate Investment Trusts IV Limited Partnership Direct Participation Programs

I Common stocks II U.S. Government bonds III Real Estate Investment Trusts

Which of the following statements are TRUE regarding NASDAQ Level II? I Each market maker posting a quote must be willing to trade at least 1 round lot of 100 shares II Each market maker posting a quote must be willing to trade at least 10 round lots of 100 shares III If a market maker refuses to honor a quote, this is called "backing away" IV If a market maker refuses to honor a quote, this is called "selling away"

I Each market maker posting a quote must be willing to trade at least 1 round lot of 100 shares III If a market maker refuses to honor a quote, this is called "backing away"

Quotes shown in the NASDAQ System (Single Book) are: I Firm II Unfirm III 1-Sided IV 2-Sided

I Firm IV 2-Sided

Which of the following trades are reported through ACT's Trade Reporting Facilities (TRFs)? I NASDAQ Market Center trade of a NASDAQ listed stock II Super Display Book trade of an NYSE listed issue III Trade of an NYSE listed issue in the Third Market IV Trade of a listed option contract on the CBOE

I NASDAQ Market Center trade of a NASDAQ listed stock III Trade of an NYSE listed issue in the Third Market

Which statements are TRUE? I OATS intakes orders for NASDAQ issues II ACT intakes orders for all NASDAQ issues III OATS matches and reports completed trades of NASDAQ issues IV ACT matches and reports completed trades of NASDAQ issues

I OATS intakes orders for NASDAQ issues IV ACT matches and reports completed trades of NASDAQ issues

Bid and Ask quotes for non-NASDAQ "over-the-counter" stocks can be obtained from the: I Pink Sheets II Yellow Sheets III OTC Bulletin Board IV Consolidated Quotations Service

I Pink Sheets III OTC Bulletin Board

Which statements are TRUE? I Quotes for NYSE listed issues, regardless of the market venue where the quote originates, are found on CQS II Quotes for NYSE listed issues, regardless of the market venue where the quote originates, are found on the UQDF III Quotes for NASDAQ listed issues, regardless of the market venue where the quote originates, are found on CQS IV Quotes for NASDAQ listed issues, regardless of the market venue where the quote originates, are found on the UQDF

I Quotes for NYSE listed issues, regardless of the market venue where the quote originates, are found on CQS IV Quotes for NASDAQ listed issues, regardless of the market venue where the quote originates, are found on the UQDF

Which of the following statements are TRUE regarding stop orders? I Stop orders are placed "away" from the current market II Stop orders allow a specific execution price to be "locked in" III Stop orders can limit loss on a long stock position IV Stop orders can protect a profit on a long stock position

I Stop orders are placed "away" from the current market III Stop orders can limit loss on a long stock position IV Stop orders can protect a profit on a long stock position

Which statements are TRUE when comparing the NYSE and NASDAQ markets? I The Specialist (DMM) trades on the NYSE II The Specialist (DMM) trades on NASDAQ III The Market Maker trades on the NYSE IV The Market Maker trades on NASDAQ

I The Specialist (DMM) trades on the NYSE IV The Market Maker trades on NASDAQ

When comparing Specialists (DMMs) on the NYSE to market makers on NASDAQ, which statements are TRUE? I The Specialist/DMM is obligated to make a continuous competitive market in the stock II The Specialist/DMM is not obligated to make a continuous competitive market in the stock III The market maker is obligated to make a continuous competitive market in the stock IV The market maker is not obligated to make a continuous competitive market in the stock

I The Specialist/DMM is obligated to make a continuous competitive market in the stock IV The market maker is not obligated to make a continuous competitive market in the stock

A customer has previously entered an order to sell 100 shares of ABCD at $9.50. The quotations terminal shows the last trade of ABCD taking place at $9.50 yet the customer's order has not been executed. Which are valid reasons for this? I The trade at $9.50 was performed by another market maker II There were other limit orders at the same price ahead of the customer's order III The trading department has closed for lunch IV The firm sold the stock for its own account at $9.50 ahead of the customer's order

I The trade at $9.50 was performed by another market maker II There were other limit orders at the same price ahead of the customer's order

Which of the following would be found on a "when, as, and if issued" confirmation? I Trade Date II Settlement Date III Execution Price IV Amount of Accrued Interest

I Trade Date III Execution Price

Which of the following securities are traded in the secondary market? I U.S. Government bonds II U.S. Government savings bonds III Municipal bonds IV Municipal bond funds

I U.S. Government bonds III Municipal bonds

Under the provisions of Rule 606 of Regulation NMS, which of the following must be disclosed to customers by member firms upon request? I Which market received the customer order II Whether the order was directed or non-directed III The time of execution of the order IV The best market for the security at the time of execution

I Which market received the customer order II Whether the order was directed or non-directed III The time of execution of the order

The NYSE Specialist (DMM), when trading for his own account, trades: I the market trendII against the market trendIII to dampen market volatilityIV to enhance market volatility

I against the market trend III to dampen market volatility

Orders that are placed lower than the current market are: I buy limits II buy stops III sell limits IV sell stops

I buy limits IV sell stops

If a firm effects trades solely on an principal basis, the firm: I carries inventory II does not carry inventory III is a market maker IV is not a market maker

I carries inventory III is a market maker

In an inefficient market: I dealer spreads are wide II dealer spreads are narrow III trading volume is high IV trading volume is low

I dealer spreads are wide IV trading volume is low

A sell stop order is executed: I in falling markets II in rising markets III at the price specified IV at the market price A I and III B I and IV C II and III D II and IV

I in falling markets IV at the market price

In an over-the-counter agency trade, the member firm executing the order: I is a broker II is a dealer III charges a mark-up IV charges a commission A I and III B I and IV C II and III D II and IV

I is a broker IV charges a commission

A Day order placed "market - at the open": I must be executed that day II may be executed at the opening on the next day III will be executed at the opening market price or canceled IV will be executed as close to the opening price as possible

I must be executed that day III will be executed at the opening market price or canceled

Regular way trades of U.S. Government securities settle: I next business dayII in 2 business daysIII in Clearing House fundsIV in Federal Funds

I next business day IV in Federal Funds

A market maker that compensates a retail member firm for sending its customer orders to that market maker is: I paying for order flow II interpositioning III engaging in a prohibited practice under SEC rules IV permitted to do so, subject to best execution requirements

I paying for order flow IV permitted to do so, subject to best execution requirements

Dark Pools are: I regulated as broker-dealers II regulated as exchanges III subject to Regulation ATS IV not subject to Regulation ATS

I regulated as broker-dealers III subject to Regulation ATS

An all or none order: I requires the trader to execute the order in full II allows the trader to execute the order in part or in full III allows the trader to make more than one attempt to fill the order IV requires the trader to make only one attempt to fill the order

I requires the trader to execute the order in full III allows the trader to make more than one attempt to fill the order

A municipal term bond with 9 years remaining has been pre-refunded at 102 to a call date 2 years in the future. If a customer buys this bond, the yield shown on the confirmation will be computed: I to the call date II to maturity date III including any call premium IV excluding any call premium

I to the call date III including any call premium

Which of the following are part of the Second Market? I NYSE II Pink OTC Market III NASDAQ IV OTCBB

Pink OTC Market OTCBB These are quotes over phone, not exchanges

When performing over-the-counter transactions, which of the following statements are TRUE? I A firm is allowed to give preference to an order for its own account before a customer's account if the transaction is for a short sale II A firm is not allowed to give preference to an order for its own account before a customer's account under any circumstances III A firm is allowed to act as both broker and dealer in the same transaction IV A firm is not allowed to act as both broker and dealer in the same transaction

II A firm is not allowed to give preference to an order for its own account before a customer's account under any circumstances IV A firm is not allowed to act as both broker and dealer in the same transaction

Which of the following securities are actively traded in the secondary market? I Open end funds II Closed end funds III Real estate investment trusts IV Direct participation programs

II Closed end funds III Real estate investment trusts

Which of the following statements are TRUE about a stock trade effected "for cash" in a cash account? I Payment is required in part II Payment is required in full III Settlement occurs the same business day IV Settlement occurs in 2 business days

II Payment is required in full III Settlement occurs the same business day

Which statements are TRUE regarding the NYSE Specialist (DMM)? I The Specialist/DMM is under the obligation to act as the intermediary if there are 2 other floor brokers that are willing to trade with each other II The Specialist/DMM is under the obligation to act as the intermediary if there are no other floor brokers that are willing to trade that security III The Specialist/DMM is under the obligation to disintermediate himself if there are 2 other floor brokers that are willing to trade with each other IV The Specialist/DMM is under the obligation to disintermediate himself if there are no other floor brokers that are willing to trade that security

II The Specialist/DMM is under the obligation to act as the intermediary if there are no other floor brokers that are willing to trade that security III The Specialist/DMM is under the obligation to disintermediate himself if there are 2 other floor brokers that are willing to trade with each other

Which statements are TRUE regarding DK notices? I They are sent to customers II They are sent to contra-brokers III They are used to confirm the details of the trade IV They are used to reconcile unmatched trades

II They are sent to contra-brokers IV They are used to reconcile unmatched trades

In riskless principal "simultaneous" transaction, the dealer: I buys a security into inventory in advance of filling a customer order to buy that security II buys a security into inventory after receiving a customer order to buy that security III charges a mark-up to the customer IV does not charge a mark-up to the customer

II buys a security into inventory after receiving a customer order to buy that security III charges a mark-up to the customer

If a firm effects trades solely on an agency basis, the firm: I carries inventory II does not carry inventory III is a market maker IV is not a market maker

II does not carry inventory IV is not a market maker

Execution of a trade routed to an ECN is: I guaranteed since the ECN is a market maker in the security II not guaranteed since the ECN executes trades solely by matching customer orders III subject to the "best execution" rule IV not subject to the "best execution" rule

II not guaranteed since the ECN executes trades solely by matching customer orders III subject to the "best execution" rule

Proceeds transactions are: I matching a buy order from one customer to a sell order for the same security from another customer II selling a security for a customer, and buying another security for the same customer III permitted under FINRA rules IV prohibited under FINRA rules

II selling a security for a customer, and buying another security for the same customer III permitted under FINRA rules

When a firm "position trades," it: I trades on an agency basis for customers II trades on a dealer basis for its own account III takes inventory positions, both long and short IV interpositions itself between a customer and another dealer

II trades on a dealer basis for its own account III takes inventory positions, both long and short

Sell limit orders: I used to sell securities at prices that are lower than the current market price II used to sell securities at prices that are higher than the current market III guarantee a specific execution price or better IV do not guarantee a specific execution price or better

II used to sell securities at prices that are higher than the current market III guarantee a specific execution price or better

The OTCBB includes quotes for: I NASDAQ Global Market stocks II NASDAQ Capital Market stocks III Non-NASDAQ issues

III Non-NASDAQ issues

Which of the following orders would be reduced on ex date? I Buy 100 ABC @ 50 DNR II Buy 100 ABC @ 60 Stop III Sell 100 ABC @ 60 IV Sell 100 ABC @ 50 Stop

IV Sell 100 ABC @ 50 Stop

A market or limited price order which is to be executed in whole or in part as soon as such order is represented in the Trading Crowd, and the portion not so executed is canceled, is a(n): A All or None B Fill or Kill C Immediate or Cancel D Not Held

Immediate or Cancel

The Third Market trades: A listed and unlisted stocks between institutions without the use of a broker B listed securities on the trading floors of regional exchanges C unlisted securities over-the-counter D listed securities over-the-counter

listed securities over-the-counter

The system for automated trading of NASDAQ issues is called: A OTCBB B Super Display Book C Pink Sheets D NASDAQ System (Single Book)

NASDAQ System (Single Book)

Which of the following first markets does NOT trade futures contracts? A NYMEX B NYSE C CBOT D CME

NYSE

Trades of NYSE-listed securities that take place in all markets are consolidated and reported through the: A Network A Tape B Network B Tape C Network C Tape D Network D Tape

Network A Tape

Trades of NASDAQ listed securities that take place in all markets are consolidated and reported through the: A Network A Tape B Network B Tape C Network C Tape D Network D Tape

Network C Tape

Which of the following is a First Market? A Pink OTC Market B Primary Market offerings of new issues C New York Stock Exchange trading D Trading of U.S. Government securities

New York Stock Exchange trading

The SEC regulation that requires large ECNs to publicly display their quotes so that they can be traded against electronically is: A Regulation NMS B Regulation ATS C Regulation SHO D Regulation M

Regulation ATS

The Consolidated Quotations Service shows quotes from which of the following sources for NYSE listed issues? I New York Stock Exchange Specialist/DMMII Boston Stock Exchange SpecialistIII Pacific Stock Exchange SpecialistIV Third Market Maker

all

The Consolidated Tape reports trades of NYSE listed issues that occur: A on the NYSE Floor B on Regional Exchanges C in the Third Market D all of the above

all

The Specialist (DMM) on the exchange performs which of the following functions? I Acts as a dealer trading for his own account II Executes orders for other brokers III Executes round lot orders IV Executes odd lot orders

all

Last sale information is available for which of the following? I NYSE listed issuesII NASDAQ listed issuesIII Pink Sheet issuesIV CBOE listed issues

all

Which of the following are considered in determining a fair and reasonable price in a municipal principal transaction? I Best judgment of the dealer as to the value of the securitiesII Dollar amount of the transactionIII Expenses incurred by the municipal dealer in effecting the transactionIV The fact that the municipal dealer is entitled to a profit in this transaction

all

Which of the following are entered into OATS? I Orders to buy NASDAQ issues II Orders to sell NASDAQ issues III Orders to buy OTC issues IV Orders to sell OTC issues

all

Which of the following statements are TRUE about stop orders? I Buy stop orders can accelerate price advances in bull markets II Sell stop orders can accelerate price declines in bear markets III Buy stop orders limit losses on short stock positions IV Sell stop orders limit losses on long stock positions

all

Which of the following statements are TRUE regarding quotes provided on NASDAQ Level II? I Quotes are shown for round and mixed lots II Quotes are shown for up to 999,999 shares III Bid and ask quotes are shown IV The minimum quote size is 100 shares

all

Which of the following statements are TRUE regarding the Super Display Booksystem? I Orders are routed directly to the NYSE DMM for execution II Only round lots are permitted; odd lot orders cannot be entered into the system III Member firms prefer to use the system because it is more efficient and cheaper than manually handling the orders IV Executed trades are directly reported to the member firm that entered the order

all

Last sale reports are available for trades of all of the following securities EXCEPT: A Municipal bonds B Eurodollar bonds C Stocks listed on a stock exchange D Stocks listed in the Pink Sheets Review

b

Under NYSE rules, every "responsible broker or dealer" who communicates bids and offers on the exchange floor (also known as "addressing the crowd") must comply with all of the following rules EXCEPT: A any bid or offer for less than the normal trading unit has no standing in the trading crowd B the highest bid and the lowest offer have precedence in all cases C bids and offers must be publicly announced D bids and offers are set by floor officials during unusual situations

bids and offers are set by floor officials during unusual situations

John Jones has both a cash account and an IRA account at your firm. Mr. Jones calls and asks that 2,000 shares of DEF stock be purchased at the market in his IRA account. The trade is executed, however the transaction was recorded in Mr. Jones' cash account. The proper procedure to correct this is to: A enter a sell order in Mr. Jones' cash account for 2,000 shares of DEF at the market and simultaneously enter a buy order for the same amount in Mr. Jones' IRA account B obtain written permission from the trustee of the IRA account to transfer the 2,000 shares of DEF from the cash account to the IRA account C create a written record canceling the transaction from the cash account and rebilling the transaction to the IRA account, approved by the branch manager D obtain written permission from the customer to transfer the DEF stock position from the cash account to the IRA account

create a written record canceling the transaction from the cash account and rebilling the transaction to the IRA account, approved by the branch manager

If a market maker gives a customer a quote of 34.00 - 34.50, it is considered a: A subject quote B workout quote C firm quote D

firm

Under NYSE rules, every "responsible broker or dealer" who communicates bids and offers on the exchange floor (also known as "addressing the crowd") must comply with all of the following rules EXCEPT: A any bid or offer must be for at least the normal trading unit in that security B the highest bid and the lowest offer have precedence in all cases C bids and offers must be publicly announced D if two bids (or offers) are made at the same time and price, the smaller order has precedence

if two bids (or offers) are made at the same time and price, the smaller order has precedence

Over-the-Counter price quotes for equity securities can be found in which of the following? I Pink SheetsII Black ListIII Yellow Sheets

pink

Over-the-counter stock price quotes can be found in which of the following? A Red herring B Yellow List C Pink Sheets D Black List

pink

The individuals who make a secondary market in corporate bonds include all of the following EXCEPT: A market makers B dealers C traders D registered representatives

registered representatives

All of the following are requirements for a company to have its stock quoted on the OTCBB EXCEPT: A the company must be registered with the Securities and Exchange Commission B the company must be current in its filings with the Securities and Exchange Commission C there must be a minimum of 1 registered market maker quoting the security D the stock must be quoted at a minimum price of $1 per share

the stock must be quoted at a minimum price of $1 per share