SIE C.9.3
A customer in New Jersey calls a registered representative (agent) in New York and inquires about buying common stock that his brother-in-law recommended. The customer wishes to place the order. Which statement is TRUE? A. The agent must be registered in both the State of New York and the State of New Jersey B. The agent must be registered in the State of New Jersey only C. The agent must be registered in the State of New York only since the trade is unsolicited D. The agent is not required to be registered in either state since the trade is unsolicited
A
A customer wishes to place a buy order for a security that has not been registered in the state. The security may be purchased if the security: A. falls under a "Blue Chip" exemption by being listed on a recognized national stock exchange B. files SEC reports C. is traded by at least 2 market makers D. has been trading in the market for at least 1 year
A
An individual has requested to be placed on your firm's "Do Not Call" list 3 years ago. Under industry rules, for how much longer must the name remain on the list? A. 2 years B. 5 years C. 8 years D. 10 years
A
The "valuation date" for securities in a SIPC liquidation is the date the: A. court appoints a trustee in bankruptcy B. security was acquired by the claimant C. security is distributed to the claimant D. claim is received from the harmed customer
A
When a sales representative wishes to sell an exempt security to an out of state customer, which statement is TRUE? A. Both the broker-dealer and the registered representative must be registered in the state where the sale of the exempt security is going to be made B. The broker-dealer does not have to be registered in the state where the sale is going to be made because the security is exempt but the registered representative is required to register C. Neither the sales representative or the broker dealer is required to be registered in the state where the sale of the exempt security is going to be made D. The registered representative does not have to be registered in the state where the sale is going to be made because the security is exempt but the broker-dealer is required to register
A
Which bond offering is required to have a trust indenture under the Trust Indenture Act of 1939? A. Mortgage bond B. Lease rental bond C. School district bond D. Treasury bond
A
Which of the following are appointed as trustees under the Trust Indenture Act of 1939? A. Banks and Trust Companies B. Broker-dealers C. Investment Advisers D. Law firms
A
Which of the following callers is NOT subject to the provisions of the Federal Telephone Consumer Protection Act of 1991? A. An Animal Shelter B. Securities Firm C. Telemarketing Firm D. Real Estate Company
A
Which statement is TRUE about banks that have customer accounts holding both exempt and non-exempt securities? A. The bank must be registered as a broker-dealer under the Securities Exchange Act of 1934 and must be a member of the Securities Investor Protection Corporation B. The bank must be registered as a broker-dealer under the Securities Exchange Act of 1934 but is not required to be a member of the Securities Investor Protection Corporation C. The bank does not need to be registered as a broker-dealer under the Securities Exchange Act of 1934 but must be a member of the Securities Investor Protection Corporation D. The bank does not need to be registered as a broker-dealer under the Securities Exchange Act of 1934 and is not required to be member of the Securities Investor Protection Corporation
A
A customer has an account with a brokerage firm that is in receivership. The account holds $350,000 of securities and has a $150,000 debit. Which statement is TRUE regarding SIPC coverage? A. The customer must deposit $150,000 to receive the $350,000 of securities B. The account is covered for $200,000 C. The account is covered for $350,000 D. The account is covered for $500,000
B
A registered representative is considering prospecting a wealthy family member to see if she will open a brokerage account at his firm. The registered representative checks the National Do-Not-Call List and finds the family member there. The registered representative checks the firm's Do-Not-Call list and does not find the family member there. Which statement is TRUE? A. This prospect cannot be called by the registered representative B. This prospect can be called by the registered representative C. This prospect can only be called by the registered representative between the hours of 8:00 AM and 9:00 PM D. This prospect can only be called by the registered representative with written approval of the #24 General Principal
B
All of the following must be registered under state blue sky laws EXCEPT: A. Broker-Dealers B. Special Tax Bonds C. Limited Partnership Offerings D. Sales Representatives
B
For any claims that a customer may have against a failed broker-dealer that are in excess of Securities Investor Protection Corporation coverage limits, the customer: A. can deduct the loss from that year's taxes B. becomes an unsecured general creditor with last claim in the liquidation C. becomes a super-secured creditor with first claim in the liquidation D. has no claim against the failed broker-dealer
B
In a Securities Investor Protection Corporation (SIPC) liquidation, which statement regarding SIPC coverage limits is correct? A. SIPC covers each customer account for $250,000 in securities plus $250,000 in cash B. SIPC covers each customer account for $500,000 total inclusive of $250,000 in cash C. SIPC covers each customer account for $500,000 in securities plus $250,000 in cash D. SIPC covers each customer account for $750,000 in combined cash and securities
B
State registration (Blue Sky) requirements apply to which of the following securities? A. Revenue Bonds B. ABC Corporation warrants C. U.S. Government bonds D. General Obligation bonds
B
The Trust Indenture Act of 1939 protects: A. municipal bondholders from being taken advantage of by the issuing municipality B. corporate bondholders from being taken advantage of by the issuing corporation C. government bondholders from being taken advantage of by the issuing governmental unit D. all bondholders from being taken advantage of by the issuing entity
B
Which of the following would be defined as an "Investment Adviser" that must register under the Investment Advisers Act of 1940? A. A magazine of general circulation on investing B. A subscription investment letter that gives advice tailored to specific customer situations C. A weekly economic forecasting report available by subscription D. A daily newspaper column on personal investing
B
A customer has an individual cash account, an individual margin account, a joint cash account with his wife, and a custodial account for each of his 2 children. If the firm liquidates, Securities Investor Protection Corporation covers: A. only the custodial accounts B. the custodial accounts separately, the joint account separately, and both individual accounts separately C. the custodial accounts separately, the joint account separately, and both individual accounts are combined and treated as one D. any one account of the customer's choosing; the other accounts become general creditors of the broker-dealer
C
New corporate bond issues in excess of what dollar amount are subject to the Trust Indenture Act of 1939? A. $5 million B. $10 million C. $50 million D. $100 million
C
The Federal Telephone Consumer Protection Act of 1991 permits unsolicited calls to be made: A. between 9:00 AM and 5:00 PM in the time zone of the recipient B. between 9:00 AM and 5:00 PM in the time zone of the caller C. between 8:00 AM and 9:00 PM in the time zone of the recipient D. between 8:00 AM and 9:00 PM in the time zone of the of the caller
C
Under the Trust Indenture Act of 1939, which statement is TRUE? A. The trustee will pay the issuer for services rendered B. The bondholders will pay the trustee for services rendered C. The trustee protects the interests of the bondholders D. The issuer protects the interests of the trustee
C
What does SIPC do? A. It protects customer accounts at broker-dealers from a market value decline B. It protects customer accounts at banks from a market value decline C. It protects customer accounts at broker-dealers that are now defunct D. It protects customer accounts at banks that are now defunct
C
What is a "legal person" under securities law? A. An individual human being B. A group of individual human beings opening a joint account C. A corporation D. Any of the above
C
Which of the following actions taken by a fiduciary would NOT be consistent with the obligations imposed under the "Prudent Man Rule"? A. Diversifying a fixed income portfolio with securities of varying maturities B. Selecting AA rated corporate convertible bond investments to meet an investment objective of both income and capital gains C. Investing in small capitalization unlisted new issue investments for long term growth D. Writing covered calls against securities positions held in the account to increase income
C
A customer has a cash account holding $200,000 of securities and $340,000 of cash. If the broker-dealer were to fail, which statement is TRUE regarding the status of the account in an SIPC liquidation? A. SIPC will provide coverage for the $200,000 of securities only B. SIPC will provide coverage for the total of $540,000 of securities and cash C. SIPC will provide coverage for only $340,000 of cash D. The customer will become a general creditor in the amount of $90,000
D
A registered representative calls a potential customer about investing in mutual funds. The customer states "Don't call me. Good-bye" and hangs up the phone. The registered representative should: A. use the redial function on his phone B. wait for the 20 day cooling off period to expire and then call the customer again C. fax the customer about the mutual fund being offered D. place the customer on a "Do Not Call" list
D
All of the following communications fall under the Federal Telephone Consumer Protection Act of 1991 EXCEPT: A. Telephonic via live human voice B. Telephonic via pre-recorded message C. Facsimile transmission D. U.S. mail
D
All of the following information must be disclosed when making unsolicited phone calls to potential customers EXCEPT: A. Caller's name B. Firm's name C. Address or phone number from which the caller is dialing D. CRD number of the Registered Representative placing the call
D
All of the following statements are true about State "Blue Sky" laws EXCEPT: A. Broker-dealers and their sales representatives who are resident must register in the state under these laws B. Broker-dealers and their sales representatives who are non-resident that direct offers into the state must register in the state under these laws C. States may suspend or expel broker-dealers and sales representatives for violations of the law D. If firms comply with the provisions of the Securities Exchange Act of 1934, then they are in compliance with state laws
D
An agent of a broker-dealer would be required to register in a given state if the: A. member firm has an office in that state B. issuer of the security involved in a transaction is incorporated in that state C. issuer of the security involved has an office in that state D. agent is located in a neighboring state and sells securities to a customer of that state
D
In most states, uniform state law requires that individuals representing broker-dealers that sell managed accounts: A. register as agents in the state but no licensing exam is needed B. register as investment adviser representatives in the state but no licensing exam is needed C. register as agents in the state and pass the Series 63 exam D. register as investment adviser representatives in the state and pass the Series 65 exam
D
John Jones has an individual cash account; a joint margin account with his wife; a custodial account for his minor daughter; and a custodial account for his minor son; all at the same brokerage firm. If the firm should fail, Securities Investor Protection Corporation will cover: A. all of the accounts as a single account B. the individual and joint accounts as one account; and the custodial accounts as one account C. the individual and joint accounts as one account; and each custodial account separately D. each account separately
D
The legislation that requires the CEO (Chief Executive Officer) of a publicly traded company to make an annual certification of the information presented in the company's financial statements is the: A. Securities Act of 1933 B. Securities Exchange Act of 1934 C. Trust Indenture Act of 1939 D. Sarbanes-Oxley Act of 2002
D
Which statement about the Securities Investor Protection Corporation (SIPC) is FALSE? A. SIPC is a non-profit government sponsored corporation B. Every broker-dealer registered under the Securities Exchange Act of 1934 must be a member of SIPC C. SIPC is an insurance fund protecting against broker-dealer insolvency D. SIPC is funded through annual assessments paid by customers
D
Which statement is TRUE about SIPC coverage for customer accounts at banks that solely handle exempt securities? A. The bank must be registered as a broker-dealer under the Securities Exchange Act of 1934 B. The bank only needs to obtain supplemental SIPC coverage because all securities losses would primarily be covered by FDIC. C. The bank must be a member of the Securities Investor Protection Corporation unless it obtains a waiver from the FRB D. The bank does not need to be a member of the Securities Investor Protection Corporation
D
