SIE FINAL EXAM ( 7, 8, 9)
A broker-dealer can hold the mail of a customer who is travelling domestically for ___________, unless the customer provides an acceptable reason for the mail to be held for a longer time period
3 months
Contributions to non-qualified retirement accounts are made with ___ dollars.
After-tax
The Federal Reserve would like to stimulate the economy, which of the following actions would do so?
Buy Treasuries
The Bank Secrecy Act requires that cash transactions over________be reported to the FinCEN:
$10,000
FINRA requires members to maintain records of all communications with the public for a period of:
3 years from last use
A type of qualified retirement plan that is designed for employees of public schools and certain non-profit organizations is the:
403(b) plan
Which of the following describes trade shredding?
A representative breaks a client's trade request into smaller transactions in order to increase his commission fees
Which of the following is not true of a retail advertisement for a securities professional which uses a customer testimonial?
A testimonial is only allowed in print advertisements
A U.S. exporter prefers:
A weak dollar
FINRA considers which of the following to be retail communications?
All of these: Radio and television broadcasts, Signs, and billboards, Telephone or audio recording.
A broker-dealer must conduct a suitability analysis before it can:
Approve a customer account
Retail communications from firms that have been registered with FINRA for less than one year must be filed with FINRA's Advertising Regulation Department:
At least 10 business days prior to first use
Edward is a client of Andrew, a registered representative for ABCD Brokerage. Today, Edward's friend Sally, who works for a software company named Data Edge, informs him of an innovative software design that will be announced within a week or two. Developing this new software will be great for the company's publicity and most likely its bottom line, so Sally advises Edward to purchase stock in Data Edge. Edward takes Sally's advice and asks Andrew to buy 5,000 shares in Data Edge, which Andrew promptly does. Andrew was not aware of the information that Edward received from Sally. Two weeks later, the new software is announced and Data Edge's stock price quickly rises, netting a large gain for Edward. Which of the following is true?
Both Edward and Sally are guilty of insider trading
A company's CFO mentions to his cousin that the company's next earnings report will be terrible. The cousin immediately sells all his shares in the company. Who is guilty of insider trading?
Both the CFO and the cousin
SIPC is backed financially by which of the following groups?
Broker-dealers that are members of SIPC
If a person attends an event and writes down their name and contact information on a list, but has not signed an agreement to enter into a business relationship, what must the rep do if she wants to contact the potential customer?
Check the Federal do-not-call list first
Making excessive transactions in order to earn more commissions, while ignoring the best interests of clients is called:
Churning
Stocks whose performance track the ups and downs of the business cycle are called:
Cyclical stocks
The order of the phases of the business cycle is:
Expansion, peak, contraction, trough
An inverted yield curve will show shorter-term bonds as having _______ yields compared to longer-term ones.
Higher
Account designations that bypass probate include: I. Transfer on death II. Joint tenants in common III. For the benefit of IV. Joint tenants with rights of survivorship
I and IV
Relative to other currencies, a strong dollar tends to: I. make foreign travel less expensive for American tourists II. make foreign travel more expensive for American tourists III. make U.S. exports more affordable IV. make U.S. exports less affordable
I and IV
Order the following from lowest to highest rate of return: I. Federal funds II. Prime III. Discount IV. Broker call
I, III, IV, II
Which of the following would be considered defensive stocks? I. Automobile stocks II. Airline stocks III. Pharmaceutical stocks IV. Tobacco stocks
III and IV
Regarding money laundering, what is the step when funds are invested in legitimate vehicles?
Integration
When you open an account for a corporate customer, why do you need to be provided with a corporate resolution?
It authorizes opening the account and names the individuals with trading authority.
Joe is a registered person. In order to grow his business, Joe makes phone calls every morning starting at 8:00 a.m. and is careful to comply with both the Firm's Do Not Call List and the National Do Not Call List. On Tuesday, Joe calls one of his clients, Bob, at 8:30 a.m. Bob is upset with Joe and yells at him. Bob later places his name on the Firm's Do Not Call List and Joe calls him again two months later. Based on his actions, has Joe violated the Do Not Call rules?
Joe did not violate the rules with his first phone call to Bob, but did violate the rules with the second phone call two months later
Using material non-public information to make a trade in a security is:
Known as insider trading and is always a securities violation
The "fourth market" primarily refers to transactions involving:
Large institutional investors
All of the following are true about a revocable trust EXCEPT:
May not be amended in one's lifetime
The U.S. government delegates control over _________ to the Federal Reserve.
Monetary policy
Monetary policy is concerned with the supply of ________ and the cost of __________. Monetary policy is directed by the _________ which targets the _________ rate, the interest rate that large banks charge each other for overnight borrowing.
Money, credit, Federal Reserve, federal funds
A retail communication is a written or electronic communication written to ________ within 30 days.
More than 25 retail customers
A recession is marked by a contraction phase of the business cycle that lasts for:
More than 6 months
Which of the following would be described as an auction market?
NYSE
Inflation is most likely to occur at which of the following times in the business cycle?
Near the end of the expansion phase
The SEC's "Privacy of Consumer Financial Information" rules -- more commonly known as Regulation S-P -- limit the ability of financial institutions, including broker-dealers, investment companies, and investment advisers to share ____________ about their customers with ______________?
Nonpublic personal information, non-affiliated third parties
Member firms that have been registered with FINRA for less than ____________ must file all published public retail communications at least ______ business days prior to first use.
One year; 10
Matching buy/sell orders to create the appearance of high trading activity, in hopes of raising the price of the security is known as...
Painting the Tape
Which of the following is a fiscal policy that may slow down the economy?
Reduce government spending
A customer dies. Which wouldn't you need from a relative who will be serving as the trustee of the estate?
Stock power of attorney signed by the client
At withdrawal, pre-tax contributions and earnings in a traditional IRA are:
Taxed at the investor's ordinary income rate
A trust that comes into effect upon the death of the trustor is called a:
Testamentary trust
A husband and wife set up a JTWROS account. This means that:
The husband or wife will have all rights to the assets in the account once the other has passed away
In a normal yield curve, what is the relationship between yield and maturity?
The longer the maturity, the higher the yield
123 Markets LLC is a research and trading firm that specializes in technology stocks. The trade desk has learned that the research desk will be issuing a bullish research report on VdotCom next week and traders decide to size-up their current position by buying 20,000 shares before the price increases. 123 Markets LLC is guilty of:
Trading ahead of a research report
Which of the following describes insider trading?
Trading on the basis of material nonpublic information
Front-running refers to the practice of:
Trading on your own account ahead of a customer's block order
Contributions to a _______ IRA are made with pre-tax dollars.
Traditional
Regulation Best Interest requires a broker-dealer to act in a retail customer's best interest:
When a recommendation is made that the customer uses primarily for personal investing
Which of the following best describes interpositioning?
When a third-party is inserted between a broker-dealer and the best available market price, requiring a client to pay additional commissions
At what point does "correspondence" become retail communication?
When recipients exceed 25 retail investors
What type of account is a JTIC (Joint Tenants in Common)?
a joint account where each owner has his or her own individual interest in the account that is passed to his or her estate at death
What is the major difference between a trade deficit and a trade surplus?
a trade deficit means the U.S. has been importing more goods than exporting, whereas a trade surplus means the U.S. has been exporting more goods than importing
Roth IRA contributions are ___________, while withdrawals after age 59½ are ______________.
after-tax, tax-free
Which of the following is the BEST name for the market which is a physical location where buyers and sellers get together to trade securities?
auction market
Money moving into the U.S. economy versus money going out of the U.S. economy is tracked by:
balance of payments
A 401(k) plan is a type of:
defined-contribution plan
A New York Stock Exchange member who makes a market in a specific stock and maintains an orderly market for the shares of that stock is considered a:
designated market maker/specialist
Joe is an agent with written discretionary authorization in a client's account. He effects several transactions in a client's account in order to generate a larger commission for himself. This behavior is:
prohibited, because Joe should be placing his client's interest ahead of his own
