SIE Unit 3
A client opens a new margin account and as the initial trade, purchases 300 shares of MS Corporation common stock at $10 per share. The firm would send the client a margin call for...
$2,000
A customer opens a margin account and, upon account approval, does an initial transaction purchasing 100 shares of MJS common stock at $25. How much will the customer need to deposit?
$2,000
An investor purchased 100 shares of ACME shoelace stock for $20 per share. Four years later, the investor sold the stock for $28 per share. This investor would report these transactions, on a per share basis, as...
$20 cost basis, $8 capital gain
An investor owns 500 shares of stock whose current market value is $20 per share. The stock undergoes a split, after which the investor owns 400 shares. What is the new price of the investor's stock?
$25 per share
A 72 year old customer has a $30,000 required minimum distribution (RMD) calculated to be taken from an IRA. If the customer is in the 20% income tax bracket and only withdraws $25,000 from the account, how much in taxes and penalties will be owed?
$8,500
Each of the following are likely to be found on a trade confirmation...
-CUSIP -commission -description
All of the following MAY be purchased on margin...
-NASDAQ listed stocks -municipal securities -exchange listed securities
A customer leaves the sale proceeds from a recent transaction in the account. This amount would be considered...
-a free credit balance -available to the customer at any time
Of the following, which would be considered institutional communications with the public?
-a letter to a municipality offering your firm's services as an underwriter -a letter to another broker/dealer regarding potential business together -a communication with an individual designated to act on behalf of your institutional customer
WRJ stock is quoted as 21 bid, 21.5 offer. Which of the following is TRUE?
-a purchase can be made at $21.15 per share if buying at the market -the spread is $.15
An investor owning 500 shares of stock worth $40 per share receives notice that the stock will undergo a split. When the split is completed, the investor owns 400 shares of stock worth $50 per share. The split must have been...
-a reverse split -an uneven split
Which of the following corporate actions are designed to allow investors to buy shares of stock under specific, defined conditions?
-a rights of offering -issuing warrants
Which of the following is true for a forward stock split adjustment?
-aggregate poison value remains unchanged -number of shares increases
In a proxy contest, which of the following must register with the Securities and Exchange Commission?
-all persons participating in proxy solicitation -all persons providing shareholders with unsolicited advice
Regarding a member firm's continuing payment of commissions to a retired registered representative (RR), each of the following statements are true...
-an agreement to pay continuing commissions to retired RRs must be in writing -commissions may be paid to a representative's beneficiary or estate after death -a retired RR may receive commissions derived form new customers to the book
All of the following would be legal investments in an IRA...
-annuities issued by the ABC Life Insurance Company -mutual funds -gold coins made by the US Treasury
Which of the following would NOT be considered violations?
-as soon as a customer opens a margin account and signs the loan consent agreement the BD lends all of the securities in the customer's account to other customers for the purpose of selling short -Mr. Smith makes a deposit into his spouse's account for the purpose of meeting a margin call
Which of the following are associated with manipulative, deceptive, or fraudulent devices?
-breakpoint sale -capping
Each of the following activities would be deemed a violation of FINRA rules...
-breakpoint sales -parking -marking the close
All of the following are TRUE regarding breakpoints for mutual funds...
-breakpoints must be disclosed to potential investors -a breakpoint sale is considered to be a sale just below a breakpoint -the greater the investment, the lower the sales charge
All of the following are taxable to the investor...
-cash dividends -capital gains distributions -semiannual interest payments
As long as it is not restricted in any documentation, margin trading is permissible in which of the following accounts?
-corporate -ownership
Which of the following must be opened as a cash account?
-custodial accounts -individual retirement accounts
Which of the following records must be kept by a broker-dealer firm for 6 years?
-customer new account forms -stock records
All of the following are TRUE regarding customer account statements...
-customer statements must be sent at least quarterly, activity or not -customers must be alerted to report any inaccuracies or discrepancies promptly -customer statements containing penny stocks must be sent monthly, even if no activity occurred in the account
A registered representative is discussing fee-based and commission based accounts with a customer. All of the following are TRUE...
-disclosure of what services the fees cover in a fee-based account must be made to the customer before the account is opened -a commission based account bills for each transaction separately -a fee-based account charges a single annual fee that can be a fixed dollar amount or a percentage of assets under management
The Securities and Exchange Commission (SEC) requires that notice of corporate actions be given for all of the following...
-dividend payments on the issuer's common stock -the issuance of warrants to be attached to a bond offering -a reverse split on the issuer's common stock
All of the following are possible actions of an investor who has received stock rights...
-exercise the rights to purchase the new stock at a discount -allow the rights to expire unexercised -sell the rights for a short-term capital gains or loss
Which fo the following orders MUST be immediately filled in their entirety?
-fill or kill (FOK) -market at open
For the risk disclosures found in the options disclosure document (ODD), all of the following would be accurate disclosures...
-firms can increase their in-house margin requirements without advance notice -customers are not entitled to an extension of time to meet a margin call customers can lose more money than initially deposited
The USA PATRIOT Act's required Customer Identification Program is designed chiefly to prevent...
-funding of terrorist activities -money laundering
Which of the following are available to participants in a 401(k) plan that are not available to IRA holders?
-hardship withdrawals -loans against the vested balance
Roth IRAs...
-have no minimum required distributions at any age -can be contributed to in the same year as a traditional IRA
Which of the following would be TRUE with regard to capital gains?
-if an asset is sold within one year (12 months or less) of its purchase, the gain is considered to be short-term and taxed at the same rate as the taxpayer's ordinary income -if the asset is held for more than a year, the gain is considered to be a long-term and is taxed at a favorable long-term rate
Under what circumstances could a member firm holding stock in street name vote the shares as it sees fit?
-if the customer does not return the signed proxy statement by the 10th day before the shareholders' meeting -if the matters to be voted on are of minor importance
Which of the following describes the consequences of a stock split?
-if the number of shares goes up, the price goes down -if the number of shares goes down, the price goes up
Which of the following orders need NOT be immediately filled in their entirety...
-immediate or cancel (IOC) -all or none (AON)
Which of the following orders need NOT be immediately filled in their entirety?
-immediate or cancel (IOC) -all or none (AON)
All of the following statements about securities purchases are TRUE...
-in a cash account, the customer pays in full for securities -in a short margin account, customers borrow securities for short sales -in a large margin account, customers borrow money for securities purchases
Which of the 2 following criteria, taken together, would cause a particular fact to be considered insider information under the Insider Information and Securities Fraud Enforcement Act of 1988?
-it is not known to the general public -it could have a strong effect on the welfare of the corporation
In order for a registered representative of a member firm to receive any form of compensation, such as commissions, after terminating employment, all of the following statements are correct...
-it would be permissible to pay continuing commissions to a surviving spouse -there must be a contract in effect calling for these continuing commissions -the agreement must be entered into before the termination of employment
All of the following are stages of money laundering...
-layering -integration -placement
Which of the following would constitute improper use of a customer's securities or funds?
-lending securities for a short sale when the client has agreed to it on the phone -borrowing a client's funds without permission, though it will be repaid the same day
Under the Uniform Transfers to Minors Act (UTMA) a custodian has control over the account and can do each of the following...
-liquidate, trade, or hold securities -buy or sell securities -exercise rights or warrants
All of the following are bullish positions...
-long calls -long warrants -long stock
Account statements provided to customers would reflect...
-long positions, short positions, or both -debit or credit balances
All of the following would be required for a new margin account...
-margin (credit agreement) -hypothecation agreement -new account agreement
Which of the following are account types that can be opened at a broker dealer?
-margin account -cash account
Each of the following investments and practices are deemed ineligible for an IRA or any other retirement plan...
-margin account trading -life insurance -collectible fine are
Considering a customer's non financial considerations is as important as considering the customer's financial concerns. Included in the category of non financial considerations are...
-marital status -number and ages of dependents
Which of the following are NOT 3-year or 6-year records?
-minutes of a director's meeting -customer complaints
Which of the following activities constitute pegging?
-multiple purchases a security during a down market to keep it from falling -protecting a short call option from being exercised by placing sell orders during the day in the underlying stock
Electronic delivery of documents requires all of the following...
-procedures to show that delivery took place as intended -procedures to deliver the information in paper form upon request -assurance of confidentiality of the documents and personal information
If a broker-dealer holds the stock of an investor in street name, which of the following must be forwarded to the investor promptly upon receipt?
-proxy statements relating to upcoming shareholder meetings -quarterly financial and other reports generated by the issuer
An associated person of a FINRA member firm has been guilty of forging a customer's signature on a document relating to a securities transaction. Under the Code of Procedure, FINRA could impose any of the following sanctions...
-requiring the person to retake the licensing exam before resuming work -a fine far in excess of the amount involved in the transaction -suspension from FINRA that might cause the person extreme hardship
All of the following are valid terms describing stock splits...
-reverse split -even split -uneven split
An exception report would most likely be generated by which of the following observations?
-seeing activity in the account of a deceased person -receiving an execution for 300 shares when the order was only 100
Regarding the taxation of gains on securities, all of the following are TRUE...
-short-term gains are taxed at less favorable ordinary income tax rates -long-term gains are taxed at more favorable long-term rates -capital gains are associated with the sale of securities and other real assets
All of the following are considered unique or nonstandard corporate actions...
-takeover -merger -tender offer
All of the following would require that updated account information be sent to the customer for confirmation within 30 days...
-the account is a newly opened one -36 months have passed since the account was opened -the customer informs the firm of a change in investment objectives
When making unsolicited cold calls to prospects, a registered representative MUST disclose all of the following to the individual called...
-the address at which the caller may be contacted -the caller's name -the name of the member broker-dealer firm
An investor purchased 100 shares of LMN in 2013 at a price of $40 per share. Soon after, the LMN declared a 25% stock dividend. Three years after the shares were purchased, they were sold at $50. Which of the following statements are CORRECT?
-the adjusted cost basis of the shares is $32 -there is a long term capital gain on all the shares sold
The current quote for DEF stock is 49.50 bid - 49.75 ask. If an investor wanted to buy or sell DEF stock, we can conclude which of the following?
-the best price anyone in the secondary market is willing to sell at is 49.75 -the best price anyone in the secondary market is willing to buy at is 49.50
The current quote for DEF stock is 49.50 bid - ask 49.75. If an investor wanted to buy or sell DEF stock, we can conclude which of the following?
-the best price anyone in the secondary market is willing to sell at is 49.75 -the best price anyone in the secondary market is willing to buy at is 49.50
A mutual fund has breakpoints at $25,000, $50,000, $100,000, and $250,000. Which of the following transactions might be considered a breakpoint sale?
-the client purchases $48,000 worth of shares -the client purchases $96,000 worth of shares
For each transaction, a customer must be sent or given a written confirmation of the trade at or before the completion of the transaction, the settlement date. Information on that trade confirmation would include...
-the commission charged on an agency transaction -the CUSIP number (if any)
The tax rate on qualified dividends depends on which of the following?
-the current IRS tax code -the tax bracket of the shareholder
What happens to the contents of a custodian account in the event of the death of the beneficial owner (the minor child)?
-the custodian's fiduciary responsibility ceases -the account passes to the minor's estate
Generally before borrowing from or lending to a customer, a registered representative must advise the firm in writing a receive written permission. Which of the following would be an exception to the written notice and approval requirement?
-the customer is an immediate family member of the RR -when the customer is a lending institution and the loan is a standard commercial lending transaction
The term "investment strategy" applies to all of the following...
-the customer's preference in bond investments -how much the customer may reasonably invest -the customer's investment goals
The benefits of designating a brokerage account as "transfer on death" (TOD) are that...
-the designation avoids probate -the account holder may still make beneficiary changes for the account
The following statements regarding electronic delivery of customer confirmations and statements are TRUE...
-the firm must have procedures in place to show that the information sent has been delivered as intended -customer must provide written consent to electronic delivery -the firm must have procedures in place to show that the confidentiality and security of personal information are protected
The following statements regarding electronic delivery of customer confirmations and statements are true...
-the firm must have procedures in place to show that the information sent has been delivered as intended -customers must provide written consent to electronic delivery -the firm must have procedures in place to show that the confidentiality security of personal information are protected
All of the following is TRUE about an investor who sells a stock short...
-the investor will close his position by purchasing the stock -the price of the stock must go down in order to profit -the investor is bearish
All of the following is true about an investor who sells a stock short...
-the investor will close his position by purchasing the stock -the price of the stock must go down in order to profit -the investor is bearish
An investor has opened an individual brokerage account for use in a small business and has given a business partner power of attorney (POA) over the account. Which fo the following persons may have access to the account for trading purposes?
-the investor's partner who was given the POA -the investor who opened the account
FINRA and other SRO's place extreme importance on knowing your customer. That involves knowing both financial and non-financial considerations. All of the following are non-financial considerations...
-the number of children the client has -the client's attitude toward risk -the client's age
When a client makes a trade, industry rules require that a confirmation be delivered no later than completion of the trade. Included on that confirmation would be all of the following information...
-the number of shares of stock in the transaction -the CUSIP number -the capacity in which the BD executing the trade acted
All of the following would be included in notice of corporate action regarding a stock dividend...
-the rate of the dividend -the declaration date -the record date
The president of a pharmaceutical company sells his stock int he company after learning that the Food and Drug Administration (FDA) is going to deny sales of a new drug that it was reviewing for the company. The registered representative that executes the order and knows of the denial informs a key client and recommends the client sell their stock in the pharmaceutical company. According to the Insider Trading and Securities Fraud Enforcement Act of 1998, all of the following are guilty of insider trading...
-the registered representative -the registered representative's client -the president of the pharmaceutical company
If a registered representative is sharing in profits and losses with a customer, all of the following statements apply...
-the representative may share in gains and losses but only in proportion to the representatives' share of the investment money -the representative must receive prior written permission form the principal before the arrangement may be made -if the customer is an immediate family member of the representative, sharing in gains and losses need not be proportional
Distinguishing between a sell stop order and a sell stop limit order, which of the following are TRUE?
-the sell stop limit order becomes a sell limit once triggered -the sell stop order becomes an order to sell at the market triggered
A shareholder had arranged to vote by proxy at the corporation's annual shareholder's meeting but later decided to vote the shares personally. All of the following statements regarding this situation are TRUE...
-the shareholders may instead vote personally as they wish -the proxy may be assigned to yet another person -the shareholders may still abstain from voting altogether
All of the following unregistered persons may under certain circumstances receive commission from a FINRA member firm...
-the spouse of a retired broker who is still owed commissions -a foreign nonmember firm ineligible for FINRA membership -a retired broker who still has commissions coming from preretirement trades
As they apply to knowing your customer and making recommendation which of the following are TRUE statements?
-the term investment strategy applies to recommendations to buy, hold and sell -non-financial considerations such as marital status and age should be considered as well as financial considerations when making recommendations
Which of the following are required if a registered representative is to share in profits and losses with a customer?
-the trades must be done in a joint account -the principal must give permission in writing for the arrangement
Your firm must provide an account statement to a customer this month if...
-there are penny stocks in the account -activity has occurred in the account this month
All of the following are TRUE regarding market indexes...
-they are performance standards investors can monitor -they can demonstrate the overall direction of the market -they can be used to compare against the performance of one's portfolio
Calls made regarding all of the following under the Telephone Consumer Protection Act of 1991 (TCPA) are exempt...
-those made for legitimate debt collection purposes -those on behalf of a tax-exempt nonprofit organization -those made to parties with whom the caller has an established business relationship
An investor owning 500 shares of MES stock received notice that the stock had undergone a 2:1 forward split when the stock's market price was $10 per share. The investor now owns...
1,000 shares worth $5 per share
Interest on a 7% corporate bond would be paid to the investor as...
2 semiannual checks for $35 each
An investor discovers that exactly 2 years and 9 months ago, the investor was given fraudulent information on a security that prompted the investor to sell it. As a result, the investor lost money. How long does the investor have to bring action?
2 years
A customer enters the following order: Sell 1,000 shares of XYZ at 23. Which of the following executions would the customer accept?
23.50
A corporation with 1 million shares of stock outstanding wishes to sell another 250,000 shares. When management conducts a rights offering, a shareholder owning 100 shares will be given stock rights to purchase how many additional shares...
25 shares
To ensure that the information obtained form each new customer is accurate, firms must furnish to each customer a copy of the account record within how many days of opening the account?
30
A customer has just notified the brokerage firm of a change of address. How long does the broker-dealer have to provide the customer with an amended account record for confirmation?
30 calendar days
An order is entered by a customer to sell at 30 stop limit. Once the order is entered, the stock trades in the following sequence: 32, 29, 31 and 33. The order would be executed and the investor would receive a price of...
31
Once a customer account has been opened at a broker-dealer, rules require that updating information on the account record occur no less frequently than once every...
36 months
All of the following are considered unique or nonstandard corporate actions EXCEPT...
3:1 stock split
How long must a BD hold the record of a complaint?
4 years
How long must a BD hold the record of complaint?
4 years
An investor owns 200 shares of MN) common stock. The company's management has proposed a 2 for 1 stock split. If the price of the stock at the time of the split is $50, what would the investor's adjusted position be?
400 shares of $25
Records relating to a currency transaction report must be retained for...
5 years
Financial institutions such as broker-dealers must report when there is an event, transaction, or series of events or transactions that appear to be questionable to...
FinCEN (financial crimes enforcement network)
A stock trade took place on Tuesday, July 2. When would regular way settlement normally take place?
Friday, July 5
As investor has a long position in OMQ stock. After selling the stock at a loss, the investor could purchase which of the following and not violate the wash sale rule?
OMQ put options
A joint trading account can be created and profits and losses shared between which of the following parties?
RR and mother-in-law, and only the mother-in-law has contributed to the account
The regulation enacted by the SEC to protect the privacy of customer information is known as...
Regulation S-P
Which of the following retirement plans does not require minimum distributions once the participant has reached age 70 1/2?
Roth IRA
Regular way settlement for corporate securities is...
T+2 business days
By the SEC definition, when is the latest that payment in full for purchased securities may take place in a cash account?
T+4 business days
Which of the following securities is exempt from the Regulation-T margin requirements but still subject to an initial margin requirement as determined by the broker-dealer?
T-notes
A bank employee has noticed that one of its customers has deposited $9,000 in his account ever Monday, Wednesday and Friday for the past 4 weeks. Through the action could be legitimate, the customer might be trying to circumvent which of the following...
The Bank Secrecy Act
Which of the following publishes and maintains a list of known terrorists and drug traffickers and those controlled by them or acting on their behalf?
The Office of Foreign Assets Control (OFAC)
Which of the following securities will settle regular way, T + 1?
Treasury bond
A corporate stock is purchase on Friday, April 2, regular way. When will the trade settle?
Tuesday, April 6
An investor purchased an MJS corporation 6% 20-year bond at issue for $950. Two years later, the investor sold the bond for $925. This investor experienced...
a $25 capital loss
Your customer opens a position at 45 and then closes it later at 47. This represents...
a 2-point gain or loss
Mr. Smith enters a trade in a stock at the same time as Mr. Jones, who has inside information regarding the company, Mr. Smith is considered...
a contemporaneous trader
A registered person has left the securities industry and now has a manufacturing job. Under what circumstances may this formerly registered person continue to receive commissions from work done at the person's old firm?
a contract must have been signed by the registered person and the firm specifying what commissions are still to be paid
Which of the following statements is the MOST correct regarding customer accounts?
a customer may open both a cash and margin account at the same time
Which of the following is TRUE regarding accounts trading on margin?
a fiduciary account may only trade on margin if it is specifically permitted int he trust or custodial agreement
Which of the following could be granted a selling concession or commission by a FINRA member firm, though the recipient lacks registration?
a foreign non-member firm, provided it agrees to abide by FINRA rules
Which of the following may receive a commission from a FINRA member firm?
a foreign nonmember firm that agrees to abide by FINRA rules
An investor owning 400 shares of stock receives notice that the stock will be split. When the split is complete, the customer owns 1,200 shares of stock. The split must have been...
a forward, even split
An investor owning 400 shares of CDS stock receives notice that the stock will be split. When the split is complete, the customer owns 600 shares of stock. The split must have been...
a forward, uneven split
SKRAM corporation is appealing directly to the shareholders of IDNIC corporation to acquire shares of IDNIC stock. This appeal is best described as...
a hostile takeover with IDNIC the target company
A customer has given permission for securities in an investment account to be used for the purpose of other customers who want to borrow them in order to sell those securities short. This would have entailed the customer signing...
a loan consent form
Regarding a member firm's continuing payment of commissions to a retired registered representative (RR), each of the following statements are true EXCEPT...
a member firm may pay continuing commissions to its retired RRs that are derived from accounts held for continuing customers, regardless of whether customer funds or securities are added to the accounts during retirement
Which of the following is an acceptable investment for an IRA?
a mutual fund specializing in speculative bonds
Many years ago, a client purchased 100 shares of ABC common stock. Due to stock splits, the customer's account now holds 500 share of ABC. If the custom had the BD send out certificates for 200 of those shares in the mail, then...
a non trade confirmation would have to be generated
Many years ago, a client purchased 100 shares of ABC common stock. Due to stock splits, the customer's account now holds 500 shares of ABC. If the customer had the BD send out certificates for 200 of those shares in the mail, then...
a non trade confirmation would have to be generated
If a shareholder does not wish to attend an annual stockholders' meeting, but still wishes to vote, the shareholder may confer a limited power of attorney on another party to vote the shares. This power is know as...
a proxy
Electronic delivery of documents requires all of the following EXCEPT...
a recording fo the customer verbally agreeing to such receipt
Which of the following would be considered excessive transactions?
a registered representative busy and sells the same security for a customer three times during a single day
If a stock is at risk of failing to maintain the minimum price requirements to remain listed on the NYSE, the most likely corporate action taken to preserve the listing could be...
a reverse split
The price of a certain stock has diminished over the last several months to the point were it may be delisted by the exchange where it trades. Ac action an issuer could take in this case would be...
a reverse split
An investor with no existing positions in MMS stock sells 100 shares. This is...
a short bearish position
A corporation divests itself of all of the shares of another company it owns. This is known as...
a spin-off
All of the following unregistered persons may under certain circumstances receive commissions from a FINRA member firm EXCEPT...
a suspended broker who recommend's the broker's firm for a transaction
A member firm suspects financial exploitation of a senior customer. Which of the following is TRUE regarding actions that can be taken?
a trusted contact person if one was named can be contacted and a temporary hold on disbursements from the account can be administered
An investor notices that a bond purchased several years ago at 95 is now priced at 90. The investor sells the bond for 90, then immediately repurchases it for 90. This action is known as...
a wash sale
An investor sells ABC stock at a loss to offset a capital gain. However, the following week, the investor buys call option on ABC stock. This activity can be defined as...
a wash sale
An investor notices that a bond originally bought at 95 some years ago is now trading at a price of 88. The investor sells the bond, then buys it back the next day for 88.5 with the intention of declaring a loss from the original purchase and sale of this year's tax return. This would be known as...
a wash sale, and taking the loss is prohibited
Regarding the potential financial exploitation of seniors, impacted accounts would be those for individuals...
age 65 and older, or age 18 and older who the member reasonable believes has a mental or physical impairment that renders the individual unable to protect his or her own interests
An investor receives an unsolicited email about a startup company trading for pennies. The email notes that a patent for a new technology is forthcoming and investors need to get in now. The next day the investor set lost of info on the same stock in an internet chat room. The hype seems to be similar to what was received in the email blast. Being cautious, the investor senses that this could be...
an effort to spread market rumors in an attempt to manipulate the stock
Which of the following would NOT require delivery of notice?
an interest payment on a corporate bond
Of the following, which would NOT be considered institutional communications with the public?
an internal memo promoting a new product that will be offered to your firm's institutional customers only
A broker-dealer's business continuity plan (BCP) should be reviewed...
annually by a principal of the firm
A fiduciary would best described as...
any person legally appointed and authorized to represent another person, act on that person's behalf, and make whatever decisions are necessary to the prudent management of the account
The category of correspondence, one of the three identified as being communications with the public, is defined as...
any written or electronic communication that is distributed or made available to 25 or fewer retail investors within any 30 calendar day period
Which of the following must precede the first trade in an account?
approval of the new account by a principal
A stock is purchased on June 10 of this year and sold on January 10 of next year for a profit of $200. How will the $200 be taxed?
as a short term capital gain, taxed at the ordinary income rate
A stock is purchased on June 10 of this year and sold on January 10 of next year for a profit of $200. How will the $200 be taxed?
as a short-term capital gain, taxed at teh ordinary income tax rate
An individual opens an account with your firm. She tells you that upon her death, she wants any assets in the account to be divided equally among her 3 children. She also wants the ability to change the allocation in the event that conditions change and one of the children is in greater need than the others, but she does not want to incur any significant legal expense. You would suggest that the account be opened...
as an individual transfer on death (TOD) account
An individual opens an account with your firm. She tells you that upon her death, she wants any assets in the account to be divided equally among her 3 children. She also wants the ability to change the allocation in the event that conditions change and one of the children is in greater need than the others, but she does not want to incur any significant legal expenses. You would suggest that the account be opened...
as an individual transfer on death (TOD) account
An investor has been putting aside funds for retirement in a nonqualified variable annuity for over 5 years. She is now age 66 and takes a lump-sum distribution. How are the earnings taxed?
as ordinaryincome
If a broker-dealer suspects that a transaction involves funds derived from illegal activity, a suspicious activity report (SAR) would be triggered at what threshold?
at least $5,000 in funds or other assets
A market maker provides a firm quote to another broker/dealer then refuses to buy or sell at the price quoted. This is a violation where the market maker is said to be...
backing away
Failure to honor a firm quotes is called...
backing away
Each of the following are likely to be found on a trade confirmation EXCEPT...
bond credit rating
Which fo the following would be considered earned income?
bonus received from employment
If a registered representative allows a customer to unknowingly buy investment company shares in an amount just under a dollar bracket that would qualify for a reduced sales charge, or encourages such a purchase, this is known as...
breakpoint sale violation
Which of the following orders can be used to close a short position in CDT stock that consists of 1,000 shares?
buy 1,000 shares of CDT
ABC Stock is currently trading at $63. Julia Miller would like to purchase ABC stock, but not at $63. If the price of ABC stock were to fall to $58 or less, then Miller wants to buy the stock. Which type of order should Miller place considering her objective?
buy limit
ABC stock is currently trading at $63. Julia Miller would like to purchase ABC stock, but not at $63. If the price of ABC stock were to fall to $58 or less, then Miller wants to buy the stock. which type of order should Miller place considering her objective?
buy limit
Recommendations regarding investment strategies under the "know your customer" (KYC) rule would not apply to recommendations to...
buy or sell commodities
Which of the following is accurate?
buy to open = long = bullish
All of the following may be purchased on margin EXCEPT...
call and put contracts
What are the 2 basic types of return on investment?
capital gains and income
Entering orders designed to keep a stock from rising...
capping
There area number of prohibited actions that can be considered market manipulation. One of them that is primarily used by investors who have written call options contracts is...
capping
If a customer wishes to open a cash account in his name only and allow a third party to make trading decisions, but not withdraw cash and securities, he must instruct his broker-dealer to open a...
cash account with limited power of attorney
Which of the following is a taxable event for an investor when it occurs?
cash dividend distribution
Margin calls can be met with deposits of...
cash or fully paid for marginal securities
Which of the following settlement arrangements has trade and settlement occurring on the same day?
cash settlement
A registered representative with discretionary authority has been doing two or three trades per week in her customer's discretionary account. The volume of transactions is not in keeping with the historic activity in the account and the trades don't all align very well with the account objectives. A principal notes that other than generation commissions, the trades seem to have little profit potential. This is likely a red flag for...
churning
In accordance with the terms of the Telephone Consumer Protection Act, all of the following statements are TRUE EXCEPT...
cold calls may be made between 8a and 9p in the time zone form which the representative is making the call
Which of the following is NOT TRUE for trade confirmations?
commissions are added to the sales proceeds to arrive at the amount the seller is to receive
Which of the following is NOT true for trade confirmations?
commissions are added to the sales proceeds to arrive at the amount the seller is to receive
All of the following would be required for a new margin account EXCEPT...
consent to loan agreement
A hypothecation agreement would be best described as a...
contract allowing securities to be pledged for the loan
All of the following are exempt from the Federal Reserve Board (FRB) Regulation T margin requirements EXCEPT...
corporate stocks
Shares to sell short have been located in order to be borrowed. Once sold short, these shares will be known as...
covered
In a custodial account for a minor, which of the following would be allowable investments or strategies?
covered call options
Which of the following must be signed by a customer wanting to open a margin account?
credit and hypothecation agreements
Which of the following records must be maintained for 6 years?
customer ledgers (statements)
A company's board of directors (BOD) approves a dividend payment. When this occurs it is recognized as the...
declaration date
All of the following are stages of money laundering EXCEPT...
diversification
Which of the following would lead to a standardized cost-base adjustment for stockholders?
dividend
In order for a registered representative of a member firm to receive any form of compensation, such as commissions, after terminating employment, all of the following statements are correct EXCEPT...
earnings from referred business from existing clients would be eligible for payment
A closing transaction can be...
either a buy or a sell
An opening transaction can be...
either a buy or sell
Aninvestor who has a short position in 500 shares of JKH common stock would eliminate that position by...
entering a closing purchase order for 500 shares of JKH
In the dividend disbursement process three of the four critical dates are determined by the board of directors but one is determined by either FINRA for OTC stocks or the exchange for listed stocks. Which one is it?
ex-dividend
A violation known as "churning" refers to...
excessive transactions done solely for the purpose of generating commissions
A registered representative is discussing fee-based and commission based accounts with a customer. All of the following are TRUE EXCEPT...
fee-based accounts are most suitable for those who do very little trading during the course of a year
Suspicious activity reports (SARs) are...
filed to the Financial Crimes Enforcement Network (FinCEN) as required by the USA PATRIOT Act
A customer has requested that your BD hold mail for them while they are traveling. Which of the following is TRUE?
firms may choose or choose not to hold customer mail when requested to
A customer has purchased a stock and then sold it before paying for the purchase. This is generally known as...
freeriding
Brokers placing orders for their own account ahead of notable large customer orders that are known to be entering the market in an attempt to gain from the price movement that is likely to occur is an example of what prohibited activity?
front running
Placing orders to buy or sell stock ahead of orders that could move the market...
front running
A customer receives a Regulation T margin call for $3,200. To meet the deposit, requirement, which of the following can be deposited?
fully paid for marginal securities totaling $6,400 in market value
Which of the following might be considered a red flag in a customer's account activities?
funds and securities are moved form one account to another for no apparent reason
A customer's account has been frozen. Which of the following is TRUE if the customer wants to purchase more securities?
funds to pay in full must be available in the account before the buy order is entered
Which of the following would NOT be considered ordinary income for tax purposes?
gains gotten from the sale of securities
Regarding the taxation of gains on securities, all of the following are TRUE EXCEPT...
gains on securities for a position held at least 12 months are not taxable
Which of the following describes the results of a 1 for 2 reverse stock split?
half as many shares at twice the original price
A married couple have equal 50% ownership interests in a tenants in common account (TIC). If one party to the account dies, what happens to the shares in the account?
half, or 50% of the shares, would belong to the remaining party and the balance would be distributed to the estate of the deceased party
All of the following are possible actions of an investor who has received stock rights EXCEPT...
hold the rights for a possible long-term capital gain
Under regulation S-P nonpublic personal information would not include a customer's...
home address
For the risk disclosures found int eh options disclosure document (DD), all of the following would be accurate disclosures EXCEPT...
if a maintenance call is not met, the customer must direct which securities to sell
Under what circumstances could a broker-dealer firm share in a financial loss with a customer?
if the loss was due to an error not he part of the firm
Which of the following order types allow for partial execution the remainder being cancelled?
immediate or cancel (IOC)
A market order to buy must be executed when and at what available price?
immediately, at the lowest
Should a member firm or an associated person be found in violation of FINRA's conduct rules, a number of sanctions may be imposed. However, under the Code of Procedure, FINRA may NOT...
impose a prison sentence on the violator
An associated person of a FINRA member firm has been guilty of forging a customer's signature on a document relating to a securities transaction. Under the Code of Procedure, FINRA could impose any of the following sanctions EXCEPT...
imprisonment for a specified period
A registered representative is explaining discretionary and non discretionary accounts to a customer. Only one of the following statements is accurate and can be made by the RR. Which is it?
in a nondiscretionary account no order can be entered without your prior approval
In which of the following accounts would the use of margin always be prohibited?
individual retirement accounts
Under the Telephone Consumer Protection Act of 1991 (TCPA) administered by the Federal Communications Commission (FCC), a telephone solicitation is defined as a telephone call...
initiated for the purpose of encouraging the purchase of investment products only such as securities
Income from an investment in a debt securities is known as...
interest
The Securities and Exchange Commission (SEC) requires that notice of corporate actions be given for all of the following EXCEPT...
interest payments on the issuer's debt instruments
A registered representative is appointed the fiduciary for a trust account. Which of the following is TRUE?
investment decisions must be made in accordance with the prudent investor rule
An investor purchased and then sold a security 8 months later for a gain. This gain...
is considered to be a short-term gain, and it will be taxed at the same rate as the taxpayer's other ordinary income
If a margin deposit is late, an extension request made by the broker-dealer...
is not required but can be made, and may or may not be granted
Which of the following is TRUE for a buy stop order?
it becomes a market order once triggered (elected)
Regarding the regulation T requirement, which of the following is TRUE?
it is currently 50% but can be changed at any time by the FRB
A wealthy individual has established a trust and wishes to establish an account with your BD that permits the trust to engage in margin transactions. Which of the follow gin statements regarding margin trading in trust accounts is TRUE?
it is permitted if provided for in the trust's documentation
A wealthy individual has established a trust and wishes to establish an account with your BD that permits the trust to engage in margin transactions. Which of the following statements regarding margin trading in trust accounts is TRUE?
it is permitted if provided for in the trust's documentation
Under FINRA's code of procedure which of the following is NOT a sanction that could be imposed against a firm or registered person?
jail sentence for an associated person of the firm
Selling shares not yet borrowed or located to be borrowed is...
known as naked short sale and is prohibited
A broker-dealer is confronted with margin deposit due but not yet received. The BD can choose to take no action, neither selling out the securities nor requesting an extension, if the amount due is...
less than $1,000
Short sellers have..
limited profit potential and an unlimited loss potential
A broker-dealer firm opening a corporate account must establish all of the following EXCEPT...
location of any account records the corporation will keep when received
An investor is long 300 shares of MAS at 45. The stock has just undergoing a 3:1 split. The investor's new position is...
long 900 shares at 15
Ownership of a security indicates that one is...
long the position and bullish
All of the following is TRUE about an investor who sells a stock short EXCEPT...
loss is limited to the amount of the investment
All of the following is true about an investor who sells a stock short EXCEPT...
loss is limited to the amount of the investment
For margin transactions taking place through introducing broker-dealers, those who do not clear their own transactions, extension requests are...
made by the clearing firm
A registered representative is opening a new account for a senior citizen age 68. The RR must...
make a reasonable effort to obtain the name and contact information for a trusted contact person
A customer of a securities firm has concluded that selling short would be an effective trading technique to reach his investment goals. Assuming the firm's principal agrees to permit the customer to effect short sales, what type of account would be most suitable for short selling?
margin account
A market maker owning 70,000 shares of HCHS stock noted that it is down .25 on the day so far. Near the very end of the trading day the market maker enters an order to buy 100 shares at the market. This is likely an attempt to...
mark the close
Which of the following is not a category of communications with the public designated by FINRA?
market letters
Subject to market liquidity, which of the following orders is most likely to be executed immediately?
market order
Falsely reporting trades that never occurred or entering orders to influence the closing price of a stock...
marking the close
Transactions designed to give the illusion of increased activity or volume in a stock...
matched orders
The income level of a donor...
may affect contributions into a Coverdell ESA
If the beneficiary of a custodian account dies, the securities in the account pass to the...
minor's estate
All of the following are TRUE regarding customer accounts statements EXCEPT...
monthly statements need not be sent if the only account activity is the receipt of interest or dividends
Which of the following may NOT be purchased on margin but can be used as collateral for a margin loan after being held for 30 days?
mutual funds
An individual is solicited with a cold call made by a registered representative. He tells the representative he is not interested in this investment or in making any future investments. Which of the following actions is required by the Telephone Consumer Protection Act of 1991?
no calls may be made to the prospect by anyone at the firm
What dollar limit is placed on damages if a suit is filed based on allegations of manipulative practices?
no dollar limit
A member firm believes that financial exploitation of a senior customer is being attempted. While not required to, but allowed to, they put a temporary hold on disbursements of cash and securities form the account. The temporary hold should be...
no longer than 15 business days unless a state regulator or agency of jurisdiction extends if longer
Each of the following activities would be deemed a violation of FINRA rules EXCEPT...
notice filing
A broker-dealer's business continuity plan to be enacted in the event of a significant business disruption requires all of the following EXCEPT...
notification to regulators within 1 hour of the event
A broker-dealer's customer will be relocating for a position with a higher salary and bonus potential. This requires...
notification to the broker-dealer of the change within 30 days
All of the following are valid terms describing stock splits EXCEPT...
odd split
Under the USA PATRIOT Act, financial firms must create and maintain records of wire transfers only...
of $3,000 or more
A corporation is issuing a bond with an interest rate below that which is commonly being offered for this type of bond. To improve the bond's marketability without reducing the capital to be obtained, which of the following actions might the corporation take?
offer a warrant on the stock with each bond
If left unexecuted, a good til cancel (GTC) order will automatically be cancelled when?
on the last business day of April and the last business day of October
When securities are bought and sold, ownership changes hands between the buyer and the seller...
on the settlement date of the transaction
The following statements regarding electronic delivery of customer confirmations and statements are true EXCEPT...
once customer agreed to electronic delivery, they can no longer receive paper copies
The follow gin statements regarding electronic delivery of customer confirmations and statements are TRUE EXCEPT...
once customers agreed to electronic delivery, they can no longer receive paper copies
Corporate accounts may trade on margin...
only if it is not listed as being restricted from doing so in the corporate charter
A partnership account wants to trade on margin. When would this be permitted?
only if it is not restricted from doing os in the partnership resolution
How an account is registered determines...
ownership and control of the investments in the account
A married couple have 2 children, both still minors. Which of the following UTMA accounts could be opened?
parent as custodian for one of the children
Any activity intended to keep a stock price stable...
pegging
Customer account statements are required to be sent quarterly unless the account contains...
penny stocks
Customer account statements are required to be sent quarterly, unless the account contains...
penny stocks
One of the concerns of a registered representative (RR) is complying with the anti-money laundering (AML) rules promulgated under the Bank Secrecy Act. There are several stages to money laundering, and it is generally agreed that the one where money laundering is most easily detected is...
placement
Those who look to hide money from government agencies and law enforcement to avoid the payment of taxes or to fund criminal enterprises often look to launder money in the following order...
placement, layering, integration
A registered representative wants to place advertisements in his daughters youth athletic league quarterly sponsorship booklet. He wants to convey in the weekly bulletin at his church that he specializes in retirement planning and 529 plans. Which of the following statements regarding these advertisements is TRUE?
pre-approval by a principal of the broker dealer is required
Broker/dealers who reserve the right to disclose nonpublic private information about their customers to unaffiliated third parties must...
provide notice to customers at the time of the account opening and provide reasonable means for customers to opt out for such disclosures
Each of the following activities would be deemed by market regulators to be manipulative behavior EXCEPT...
proxy solicitation
A brokerage firm has accumulated a large holding in a little known company by purchasing several hundred thousand shares of the company's stock. The firm instructs its RR to being touting the stock to every one of its customers and to make cold calls to new potential customers as well. This is most likely a scheme known as...
pump and dump
Efforts to push up the price of stock one owns by soliciting buy orders from customers so that the stock owned can be sold later at a higher price is a violation commonly known as...
pump and dump
Perpetrating rumors to push up the price of stock owned so as to profit later when selling...
pump and dump
Several registered representatives have agreed to purchase a certain security for their own accounts, then tout the security to their best customers. They hope that a number of large orders will be entered, driving up the price of security, which they can sell from their own accounts for a capital gain. This illegal practices is a form of...
pump and dump
An investor has just received stock rights in the mail allowing the purchase of 250 shares of stock offering at a discount. With these nights, the investor may take any of the following actions EXCEPT...
purchase 125 shares at double the discount
In order to receive a declared dividend a shareholder must be an owner of record at the close of business on the...
record date
When a client of a broker-dealer purchases stock on margin, in order to finance the loan, the broker-dealer...
rehypothecates the stock to a bank
When a broker-dealer pledges customer securities to a bank as collateral for a margin loan, the pledge is known as...
rehypothecation
Which of the following statements about rights and warrants is TRUE?
rights are short term; warrants are long term
Which statement describes rights and warrants?
rights are short term; warrants are long term
An investor needs to decide whether or not they would like to maintain their percentage of ownership in a company that has decided to increase the number of outstanding shares. Which of the following is the best description of what is taking place?
rights will be distributed to existing stockholders with an exercise price lower than the current market value
Which of the following regarding income is TRUE?
salary or bonuses are earned income, interest and dividends are investment income
All of the following statements about securities purchases are TRUE EXCEPT...
securities may not be purchased with borrowed money
On behalf of a customer, a broker-dealer requested an extension for payment that was not granted. The broker-dealer must...
sell out the securities purchased and freeze the account for 90 days
Under the Uniform Transfers to Minors Act (UTMA) a custodian has control over the account and can do each of the following EXCEPT...
sell short and write uncovered call options
Shares must be borrowed in order to...
sell short to open a position
Which of the following is TRUE regarding short sales?
selling short involves selling shares not yet owned
When investors open a position b going long the security, they can close the position by...
selling the security
To meet a Regulation T margin call, a customer would have how long?
settlement plus 2 additional business days
All of the following are bullish positions EXCEPT...
short stock
Regarding capital gains, which of the following is TRUE?
short-term gains are those realized on positions held for 12 months or less
An investor has some stock held in street name and has just received proxy statements forwarded by the broker-dealer for an upcoming shareholder's meeting. If the investor wishes the shares to be voted as recommended by the issuer's management, which of the following must the investor do?
sign and return the proxy statements by the 10th day before the meeting
Opening a margin account for a client requires the client to do all of the following EXCEPT...
signing the loan consent
A registered representative suggests a trade to a customer which the customer agrees is suitable given their investment objectives. The order is entered. This transaction is...
solicited and the order ticket must be marked solicited
Which of the following accurately states delivery requirements for account statements and trade confirmations?
statements quarterly, if no activity in the account, confirmations on or before settlement date
Which of the following must be kept for the life of the firm?
stock certificate book
Which of the following records must be kept for the life of a broker-dealer firm?
stock certificate books
All of the following are taxable to the investor EXCEPT...
stock dividends
An investor sells put options and, just before their expiration, buys the underlying stock. The intent is to keep the price from falling below the strike price of the options. Such an action is called...
supporting
For tax purposes, investment income is...
taxed at either ordinary income tax or capital gains tax rates
A company offers to repurchase outstanding debt securities it has issued directly from its bondholders for cash in what would commonly be known as...
tender-offer
If 3 individuals have a tenants in common (TIC) account with your firm and one individual dies, then...
the 2 survivors continue as co-tenants with the decedent's estate
An investor has received insider information from a research scientist that a chemical company has just invented a new polymer that could be very useful in making strong, light girders in building construction. The investor buys several thousand shares of the company's stock through his registered representative. Several months later, when the patent comes out, the investor sells the stock for a substantial capital gain. Which of the following is least likely to be found liable under the Insider Trading Act?
the CEO of the chemical firm
The president of a pharmaceutical company sells his stock in the company after learning that the Food and Drug Administration (FDA) is going to deny sales of a new drug that it was reviewing for the company. The registered representative that executes the order and knows of the denial informs a key client and recommends the client sell their stock int eh pharmaceutical company. According to the Insider Trading and Securities Fraud Enforcement Act of 1988, all of the following are guilty of insider trading EXCEPT...
the FDA
Regulation T, the initial margin requirement, is set by...
the Federal Reserve Board (FRB)
A corporation has a shareholder's meeting coming up wherein several controversial proposals will be made. A number of persons will be actively soliciting proxies, and the corporation plans to send out up-to-date material on the proposals to shareholders to permit them to make informed decisions. Which of the following must review this material before it is sent out?
the Securities and Exchange Commission
A party wishing to solicit proxy authority to vote a particular stockholder's shares must register with...
the Securities and Exchange Commission
All of the following would require that updated account information be sent to the customer for confirmation within 30 days EXCEPT...
the account records system has been changed to a new format
A customer has been found in violation of free riding. As a penalty, which of the following will occur?
the account will be frozen for 90 days and no new transactions can occur unless there is cash or marginal securities in the account before any other purchase is made
Which of the following is considered a benefit for broker-dealers offering margin accounts to their customers.
the additional income generated from the payment of margin interest
When making unsolicited cold calls to prospects, a registered representative must disclose all of the following to the individual called EXCEPT...
the address of any securities issuer mentioned during the call
A customer of a broker-dealer purchases 100 shares of XYZ stock at $50 per share on Monday. Later that week, a confirmation arrives electronically indicating that the total cost of the transaction was $5,000. The client is puzzled that there is no additional charge for commission. The most likely reason for that is...
the broker-dealer acted as a principal in the trade
If a customer's Regulation T margin deposit is late, which of the following is TRUE?
the broker-dealer may apply to its designated examining authority (DEA) for an extension
Meeting the location requirements and the borrowing of securities when a customer wants to sell short is done by...
the broker-dealer on behalf of the short-selling customer
A 40 year old individual is not covered by a retirement plan at work. What is the maximum contribution this individual can make to a Traditional IRA this year?
the current maximum allowed by the IRS, which will all be deductible
For securities held in "street name", which of the following is TRUE?
the customer is the beneficial owner
With a discretionary account...
the customer may still enter orders
A broker-dealer firm has just rehypothecated a thousand shares of MMS stock. This means...
the customer pledged the stock to the firm, which has now pledged it to a bank
Which of the following is a non financial investment consideration?
the customer's place of employment and status
The term "investment strategy" applies to all of the following EXCEPT...
the customer's position in real estate
What is the "spread" on a stock quote?
the difference between the bid price and the ask price or offer
The conduct rules permit specific types of lending arrangements between RR's and their firms and customers. Which arrangements below would not be permitted?
the firm lends the customer's securities without a consent agreement
A customer has returned a signed proxy statement for stock held in street name by a member firm. He did not indicate how he wanted to vote for any issues listed on this ballot. What action, if any, is required fo the member firm?
the firm must vote in accordance with the recommendations made by the issuer of the stock
A customer has returned a signed proxy statement for stock held in street name by a member firm. he did not indicate how he wanted to vote for any issues listed on his ballot. What action, if any, is required of the member firm?
the firm must vote in accordance with the recommendations made by the issuer of the stock
Which of the following is acceptable in a broker-dealer firm's relation with its customers?
the firm reimburses the customer for a loss due to a clerical error by the firm
All of the following are TRUE regarding breakpoints for mutual funds EXCEPT...
the first breakpoint investors can achieve is mandated by industry rule to beat the $10,000 investment threshold
A customer wants to save some money for his grandson's college education in an IRA account. Which fo the following regarding a Coverdell Education Savings Account (ESA) is TRUE?
the funds must be distributed by the time the grandchild attains age 30, unless they are rolled over
A client of a brokerage firm opened an UTMA account for her granddaughter 5 years ago, naming the child's father as custodian. Thorough appreciation as well as additional contributions, the account value has grown to $50,000 and generates interest and dividend income in excess of $3,000. Who bears that liability for the taxes on this income?
the granddaughter
A client of a brokerage firm opened an UTMA account for her granddaughter 5 years ago, naming the child's father as the custodian. Through appreciation as well as additional contributions, the account value has grown to $50,000, and generates interest and dividend income in excess of $3,000. Who bears the liability for the taxes on this income?
the granddaughter
When an investor is long a stock...
the investor is bullish
An investor has a friend who mentions that an officer of the firm he works for reported to the CEO, in a confidential meeting, that a product had great test results. If this information were public, ti would have a positive effect on the corporation's stock price. Idk the investor now makes a large purchase of the corporation's stock, who besides the investor might be liable under the Insider Trading and Securities Fraud Enforcement Act of 1988?
the investor's friend
A shareholder's meeting for ABC Corporation will take place in 8 days. A customer whose stock is being held in street name has not returned the proxy statements. Which of the following is TRUE...
the member firm may vote the shares as it wishes on minor matters
A customer waiting to open a margin account is told that the securities will be held in street name. This means that the securities will be registered in...
the name of the broker-dealer
All member firm communications are held to certain standards by FINRA. All of the following characterize those standards EXCEPT...
the nature of the audience (age, investment experience) need not be a consideration at an open seminar
When a client makes a trade, industry rules require that a confirmation be delivered no later than completion of the trade. Included on that confirmation would be all of the following information EXCEPT...
the number of bonds in the transaction
A registered representative enters into a discretionary order for her client's account. All of the following are required EXCEPT...
the order must be approved by a principal prior to entry
A GTC order is left unexecuted at the end of the trading day on the last business day of April. Which of the following is TRUE?
the order will be automatically cancelled
Hypothecation is...
the pledging of customer securities as collateral for margin loans
If a registered representative is sharing in profits and losses with a customer, all of the following statements apply EXCEPT...
the representative's expertise must be considered part of the contributions to the account
An investor is long MJS stock. For this investor, which of the following is TRUE?
the risk is that the stock falls in price
FINRA and the other SROs place extreme importance on knowing your customer. That involves knowing both financial and non-financial considerations. All of the following are non-financial considerations EXCEPT...
the salary paid to the client by her employer
A shareholder has arranged to vote by proxy at the corporation's annual shareholder's meeting, but later decided to vote the shares personally. All of the following statements regarding this situation are true EXCEPT...
the shareholder's must accept the proxy's decision
All of the following would be included in a notice of corporate action regarding a stock dividend EXCEPT...
the stock's issue date
All of the following are TRUE regarding market indexes EXCEPT...
they track single stocks rather than hypothetical portfolios
Calls made regarding all of the following under the Telephone Consumer Protection Act of 1991 (TCPA) are exempt EXCEPT...
those made that are unsolicited for the purpose of prospecting new clients
Discretion given to a registered representative to make transactions applies to all of the following EXCEPT...
timing and price only
Which of the following statements best describes the term "churning"?
trading in a customer's account considered excessive, and for which no discernible investment purpose is detected
Which of the following securities will settle regular way, T+1?
treasury bond
Which of the following securities are most likely deemed marginal by either the Federal Reserve Board (FRB) or regulatory bodies such as FINRA and the New York Stock Exchange?
treasury bonds
Which of the following records must be kept by a broker-dealer firm for 3 years?
trial balances
FINRA requires that member firms provide at least how many names as emergency contacts as a part of their business continuity plan...
two
FINRA requires that member firms provide at least how many names as emergency contacts as a part of their business continuity plan?
two
On October 8, an investor discovers that a security purchase that took place on August 5 of the same year was prompted by fraudulent information provided by the broker-dealer on the day of the purchase. How long does the investor have to bring action?
until October 7 of the second year following the event
Each of the following investments and practices are deemed ineligible for an IRA or any other retirement plan EXCEPT...
variable annuities
Holding customer mail is consistent with your broker-dealer's in house rules. Considering this, if requested to do so, the BD must...
verify at reasonable intervals that the customer's instructions still apply
A certificate issued by a company granting its owner the right to purchase securities form the issuer at some specified price years into the future would best be described as...
warrant
Regarding rights and warrants, which of the following is TRUE?
warrants are long term, exercisable above CMV when issued
Regarding purchases on margin, which of the following is TRUE?
warrants can be purchased on margin, but rights cannot
Your firm must provide a privacy notice describing its privacy policies to customers...
whenever a new account is opened and annually thereafter
All of the following would be legal investments in an IRA EXCEPT...
whole life insurance issued by the ABC Life Insurance Company
Three brothers open a joint account instructing you that if they die, they want the cash and securities in the account to go to the remaining parties to the account. The account should be opened...
with rights of survivorship
An officer of a financial firm has identified what might represent suspicious behavior on the part of a customer, involving more than $5,000. When must the firm file a suspicious activity report (SAR)?
within 30 calendar days
A customer receives a voting proxy from a broker-dealer for shares owned by the customer and held in street name. The customer returns the proxy but later decides to attend and vote at the shareholder meeting in person. The voting proxy...
would be revoked and only the vote at the meeting would count
Which type of accounts bills a single fee annually for a group of services that might include asset allocation, portfolio management, and executions?
wrap account
