SIE - Customer Accounts
At what age does a natural person possess the complete legal capacity to be held liable for the duties he or she contractually agrees to undertake? A. 18 B. 21 C. 59 1/2 D. 65
A. 18
Who can give trading authorization to another party in a brokerage account? A. A second party can give trading authorization to a first party B. A first party can give trading authorization to a second party C. A third party can give trading authorization to a second party D. A first party can give trading authorization to a third party
A. A second party can give trading authorization to a first party
Customers must be given information about SIPC: A. At, or prior to, account opening B. On the first trade confirmation sent after account opening C. On the first account statement sent after account opening D. Semi-annually on the account statement
A. At, or prior to, account opening
An employee of a member firm wishes to open an options account at another firm. Which statement is TRUE? A. Before opening the account, written permission must be obtained from the employing firm B. Prior approval of the employer is needed before executing each trade C. Duplicate trade confirmations must be sent to the CBOE D. An affidavit is required to be on file from the employee that none of the trades are prohibited under existing rules and regulations
A. Before opening the account, written permission must be obtained from the employing firm
The requirement for independent verification of a customer's identity when opening an account CANNOT be satisfied by examining a copy of the customer's: A. Birth certificate B. Driver's license C. Passport D. Military ID
A. Birth certificate
An elderly customer has a discretionary account with your firm. The power of attorney signed by the customer for the account is non-durable. If the customer becomes mentally incapacitated, the registered representative handling the account: A. Can no longer effect discretionary trades for that customer B. Must liquidate the account and wait for instructions from the court appointed guardian C. Can continue to execute discretionary trades for that customer D. Can only close existing positions but cannot introduce new positions in the account
A. Can no longer effect discretionary trades for that customer
Custodial accounts can be opened as a: A. Cash account only B. Margin account only C. Either a cash or margin account D. Either a joint cash or margin account
A. Cash account only
What is one of the benefits of a prime brokerage account? A. Consolidated account statement B. Consolidated trade execution C. Separated account positions D. Separated stock loans on short positions
A. Consolidated account statement
The principal reason for an institutional investor to open a prime brokerage account is: A. Consolidation of account positions with one broker B. Lower commission costs on trade executions C. Direct access to execution venues D. Simplified reporting for tax purposes
A. Consolidation of account positions with one broker
A new customer wishes to open an options account with your firm. All of the following procedures are required prior to the first trade EXCEPT the: A. Customer must complete an Options Agreement B. Registered Options Principal must approve the account before the first trade C. Customer must be sent an Options Disclosure Document D. New account form must be completed
A. Customer must complete an Options Agreement
When opening an account over the phone to trade stocks and options, all of the following signatures are needed on the new account form(s) EXCEPT: A. Customer signature B. Registered representative signature C. General principal signature D. Registered options principal signature
A. Customer signature
You have an elderly client who telephones you at the office, telling you the following: "I have been notified by certified mail that I have just won $100,000 in the Nigerian Government National Lottery, and in order to claim my prize, I need to wire $1,000 from my account to the Nigerian Lottery Overseas Bank." This client has a small individual account with your firm, where her adult daughter is named as the beneficiary. The action that you should take is: A. Escalate the request to a supervisor in the firm's compliance department B. Contact the daughter to see if the transfer should be made C. Refer the matter to the firm's AML officer D. Follow the customer's instructions
A. Escalate the request to a supervisor in the firm's compliance department
An officer of a trust wishes to open a margin account with your firm. This is allowed: A. If the trust agreement specifically authorizes the opening of a margin account B. As long as the new account form has been properly completed C. If an officer of the trust provides a letter of guarantee D. Only with the prior approval of the branch manager
A. If the trust agreement specifically authorizes the opening of a margin account
Jack Jones, age 82, has an individual account at your firm. He gives a full written trading authorization to his son, Jack Jones Jr. under a durable power of attorney. Upon the death of Jack Jones, the power of attorney: A. Is void B. Continues because it is a "durable" power of attorney C. Continues because it is a "full" power of attorney D. Continues until the executor over the Jack Jones estate is appointed
A. Is void
Under the rules of the Options Exchanges, if a customer's financial condition changes materially, then which of the following will be amended? A. New Account Form and Options Agreement only B. New Account Form only C. Options Disclosure Document only D. New Account Form and Margin Agreement only
A. New Account Form and Options Agreement only
Which of following documents is NOT unique to margin accounts? A. New account form B. Margin agreement C. Loan consent agreement D. Credit disclosure statement
A. New account form
Under MSRB rules, if a customer refuses to disclose sufficient financial information to make a suitable recommendation, which statement is TRUE? A. No recommendations are permitted B. The representative can recommend only investment grade securities C. The representative can only accept "solicited" trades D. Only recommendations of municipal bond mutual funds are permitted
A. No recommendations are permitted
A customer must be sent which of the following at, or prior to, opening an options account? A. Options Disclosure Document B. Options Agreement C. Loan Consent Agreement D. Chicago Board Options Exchange manual
A. Options Disclosure Document
Which of the following is a TRUE statement about discretionary accounts? A. Power of attorney must be obtained in writing from the customer before discretion can be exercised B. Each order ticket must be marked as "unsolicited" C. Each order ticket must be approved by the principal prior to entry D. The power of attorney must be renewed annually with the customer
A. Power of attorney must be obtained in writing from the customer before discretion can be exercised
When completing a new account form, you discover that the customer is an accounting supervisor at another broker-dealer. Under FINRA rules, which procedures are required? A. Prior to opening the account, approval of the employing member must be obtained B. Each transaction must be approved by the employing member firm prior to execution C. Electronic duplicate confirmations and statements must be sent to the employing member firm's COO by end of day D. Annual account summaries of all activity must be sent to the employer
A. Prior to opening the account, approval of the employing member must be obtained
What is the order for determining suitability for a client under FINRA rules? A. Reasonable Basis Suitability, Customer-Specific Suitability, Quantitative Suitability B. Customer-Specific Suitability, Quantitative Suitability, Reasonable Basis Suitability C. Quantitative Suitability, Customer-Specific Suitability, Reasonable Basis Suitability D. Customer-Specific Suitability, Reasonable Basis Suitability, Quantitative Suitability,
A. Reasonable Basis Suitability, Customer-Specific Suitability, Quantitative Suitability
Which statement is TRUE about a minor in a custodial account under UGMA (Uniform Gifts To Minors Act) reaching legal age? A. The account must be transferred into the name of the new adult B. The account is transferred into the name of the new adult when requested by the custodian C. The account is transferred into the name of the new adult when requested by the parents D. The account must be liquidated and the proceeds paid to the new adult
A. The account must be transferred into the name of the new adult
Your customer has been declared legally incompetent by a state -appointed judge and his son has presented the proper legal papers appointing him as the guardian. Which statement is TRUE? A. The account will be transferred from the customer's name to a guardian account B. The account will be transferred from the customer's name to a custodial account C. The account will be transferred from the customer's name to the son's name D. The account will be transferred from the customer's name to the state's name
A. The account will be transferred from the customer's name to a guardian account
Your customers wish to give a gift of securities to their friend's child. Which statement is TRUE? A. The gift can be given in a custodial account without restriction B. The gift can be given in a custodial account only with the prior approval of the parents C. The gift can be given in a custodial account only with the prior approval of the child D The gift cannot be given in a custodial account
A. The gift can be given in a custodial account without restriction
To open a new account for a trust, which statement is TRUE? A. The tax identification number of the trust must be obtained B. The tax identification number of the trustee must be obtained C. The tax identification of the trust beneficiary must be obtained D. There is no requirement to obtain a tax identification number when opening a trust account
A. The tax identification number of the trust must be obtained
Under FINRA rules, a registered representative must obtain and retain all of the following information relating to the customer's account EXCEPT: A. Whether the customer is an administrative manager of a publicly traded company B. The customer's country of citizenship C. Whether the customer is employed by another FINRA member firm D. Customer's financial status
A. Whether the customer is an administrative manager of a publicly traded company
Under FINRA rules, initial approval of new accounts must be performed, in writing, by the: A. Financial and Operations Principal B. Branch Office Manager C. Registered Representative D. Supervisory Analyst
B. Branch Office Manager
A customer has an existing cash account that holds many different positions in blue chip stocks. The customer has an investment objective of moderate growth and income. The customer contacts his representative, stating that "I think the market will be flat for a while, but I don't want to see my portfolio return drop." The registered representative recommends that the customer sell covered calls against some of the stocks held in the customer account. The representative: A. Can do so without any additional documentation as long as options positions taken do not exceed 15% of account value B. Cannot do so unless the account is qualified to trade options C. Cannot do so unless the stock positions are transferred to a margin account and the customer signs a margin agreement D. Can do so without restriction because covered call writing is a conservative strategy that is permitted in a cash account
B. Cannot do so unless the account is qualified to trade options
To open an options account, inquiry must be made into the customer's financial situation and needs in order to do all of the following EXCEPT to: A. Determine the restrictions, if any, to be placed in the Options Agreement B. Determine whether the customer should receive an Options Disclosure Document C. Determine if it is appropriate to open the account D. Make suitable customer recommendations
B. Determine whether the customer should receive an Options Disclosure Document
A copy of the member firm's Business Continuity Plan must be provided to: A. FINRA annually B. Each customer at account opening C. The SEC every 36 months D. Anyone who makes the request
B. Each customer at account opening
An account is opened for three individuals as "Tenants in Common." If one of the individuals dies, the: A. Account must be liquidated to facilitate the division of assets among the surviving tenants and the deceased's estate B. Estate assumes the tenancy of the deceased individual in the account C. Account becomes the property of the two remaining survivors as Tenants in Common D. Account becomes the property of the two remaining survivors as Joint Tenants with Rights of Survivorship
B. Estate assumes the tenancy of the deceased individual in the account
What are synonymous terms for the "parties" to a brokerage account? A. First Party / Customer B. First Party / Broker C. Third Party / Broker D. Third Party / Customer
B. First Party / Broker
A husband and wife wish to open an account that allows either party to trade or draw checks; and that becomes the property of the surviving spouse if one should die. The proper ownership form is: A. Tenants in Common B. Joint Tenants with Rights of Survivorship C. Separate Individual accounts D. Joint Partnership account
B. Joint Tenants with Rights of Survivorship
When opening an account under the Uniform Gifts to Minors Act, the social security number to be used is that of the: A. Custodian B. Minor C. Guardian D. Trustee
B. Minor
In order to open a new account for a customer, the customer's name, date of birth, address and tax identification number must be: A. Obtained and independently verified prior to account opening B. Obtained prior to account opening and independently verified within a reasonable time before or after account opening C. Obtained within a reasonable time before or after account opening and independently verified prior to account opening D. Obtained and independently verified within a reasonable time before or after account opening
B. Obtained prior to account opening and independently verified within a reasonable time before or after account opening
When comparing a "Convenience Account" to Transfer on Death (TOD) registration: A. Opening a Convenience Account does not require a court order while a Transfer on Death account does B. The named person in a Convenience Account has no ownership rights upon the owner's death, while the named person in a TOD account does C. The named person in a Convenience Account has access to account funds only upon the death of the account owner, while the named person in a TOD account has access to account funds at will D. Opening a Convenience Account requires a smaller minimum deposit than the opening of a Transfer on Death account
B. The named person in a Convenience Account has no ownership rights upon the owner's death, while the named person in a TOD account does
If a retail customer gives a market-not held order: A. The order is treated as a "good-til-canceled" (GTC order) B. The order is treated as a "day" order C. A written power of attorney must be on file from that customer to accept the order D. The order cannot be handled manually and must be executed via an electronic system
B. The order is treated as a "day" order
A member or associated person is allowed to select all of the following relating to a customer transaction without requiring a written trading authorization EXCEPT: A. Price of the security to be purchased B. The security to be purchased C. The trading venue in which the security will be purchased D. The time of trade execution
B. The security to be purchased
An account registration that allows the customer to name the person into whose name securities in the account will be registered upon the death of the customer is known as: A. Tenancy in common B. Transfer on death C. Joint tenants with rights of survivorship D. Successor registration
B. Transfer on death
Which one of the following orders requires specific customer authorization? A. "Buy 100 shares of ABC at the best price available" B. "Sell 100 shares of ABC at the market" C. "Buy 100 shares of any computer stock priced at under $40" D. "Sell 100 shares of ABC at $40 if it gets to that level"
C. "Buy 100 shares of any computer stock priced at under $40"
A customer has how many days after opening an options account to sign and return the options agreement? A. 0 days B. 5 days C. 15 days D. 30 days
C. 15 days
All of the following individuals can legally grant a power of attorney over their accounts to a third party EXCEPT a: A. 34-year old doctor who has signed up with Doctors Without Borders to work for 2 years in Madagascar B. 56-year old who has been diagnosed with pancreatic cancer and is undergoing a Whipple gastric dissection procedure C. 29-year old diagnosed with paranoid bipolar disorder who has been adjudicated legally incompetent D. 20-year old college student who has recently inherited a large sum of money from his parents, who died unexpectedly in a car crash
C. 29-year old diagnosed with paranoid bipolar disorder who has been adjudicated legally incompetent
Which of the following can open a joint account without restriction? A. Parent and minor B. Guardian and custodian C. 3 limited partners D. Registered representative and client
C. 3 limited partners
To prevent financial exploitation of seniors, FINRA requires that when opening an account for a client, reasonable efforts must be made to obtain the name, phone number, and mailing or e-mail address of: A. The client's attorney B. Anyone granted a power of attorney by the account owner C. A trusted contact person D. A trustee over the account
C. A trusted contact person
Under FINRA rules, if a member suspects that a senior citizen is being financially exploited: A. A temporary hold may be placed on disbursements from the account for up to 10 business days B. A temporary hold may be placed on disbursements from the account for up to 25 business days C. Any hold placed on the account, if supported by the member's review of the situation, can be extended for another 10 business days D. Any hold placed on the account, if supported by the member's review of the situation, can be extended for another 15 business days
C. Any hold placed on the account, if supported by the member's review of the situation, can be extended for another 10 business days
When opening of a joint account for a husband and wife the firm should obtain the social security number of: A. The husband B. The wife C. Both owners D. The owner with the higher tax bracket
C. Both owners
An account is opened "joint tenants with rights of survivorship." All of the following statements are true EXCEPT: A. If one party to the account dies, the other party wholly owns the account B. Orders may be given by either party C. Checks can be drawn in the name of either party D. Mail can be sent to either party
C. Checks can be drawn in the name of either party
If a customer does not return a signed options agreement, which statement is TRUE? A. The account must be frozen for 90 days B. Opening transactions are permitted in the account C. Closing transactions are permitted in the account D. Payment in advance is required for any further transactions
C. Closing transactions are permitted in the account
A 35-year old customer in the 15% tax bracket tells her representative that she wants to buy a tax-sheltered investment. The representative explains that this is not suitable, but the customer insists that the representative execute the trade. The representative should: A. Refuse the order B. Submit the order to FINRA for approval prior to executing the order C. Execute the order, but note his or her exception in the customer account file D. Close the account
C. Execute the order, but note his or her exception in the customer account file
Under the Know Your Customer (KYC) Rule, in order to open and maintain a customer account, each registered representative must: A. Know "every" fact concerning the customer B. Know "every financial fact" concerning the customer C. Follow KYC procedures as part of an effective Anti-Money Laundering (AML) Program D. Follow KYC procedures as part of an effective Customer Privacy program
C. Follow KYC procedures as part of an effective Anti-Money Laundering (AML) Program
The approval to open a new margin account is given by the: A. Customer B. Registered representative C. General principal D. Margin department of the firm
C. General principal
All of the following statements are true regarding joint accounts EXCEPT: A. Opening a joint account requires new account information on each account participant B. If a party in a Tenancy in Common account dies, his or her share of the account is included in his taxable estate C. If a party in a Joint Tenants With Rights of Survivorship account dies, his or her share is excluded from his taxable estate D. Any party in the account can authorize trades or withdraw funds
C. If a party in a Joint Tenants With Rights of Survivorship account dies, his or her share is excluded from his taxable estate
How must an account opened under the Uniform Gifts to Minors Act be titled? A. In the name of the custodian only B. In the name of the minor only C. In the name of the custodian for the minor D. In the name of the minor for the custodian
C. In the name of the custodian for the minor
All of the following are types of fiduciary accounts EXCEPT: A. Custodial Account B. Guardian Account C. Joint Account D. Trust Account
C. Joint Account
All of the following paperwork is customarily needed to open a margin account EXCEPT: A. Margin agreement B. Loan consent agreement C. Joint account agreement D. Credit agreement
C. Joint account agreement
Under MSRB rules, a registered representative may perform a municipal securities transaction for a customer that he or she believes is unsuitable: A. Only with the approval of the MSRB B. Only with the approval of the principal C. Only at the specific direction of the customer D. Under no circumstances
C. Only at the specific direction of the customer
All of the following are types of joint accounts EXCEPT: A. Tenancy by Entireties account B. Tenancy in Common account C. Partnership account D. Joint Tenants with Rights of Survivorship account
C. Partnership account
A registered representative is allowed to choose which of the following in a transaction without requiring written trading authorization from the customer? A. Quantity and price B .Security and time C. Price and time D. Security and price
C. Price and time
Approval of new accounts for MSRB member firms CANNOT be performed by the: A. Branch Office Manager B. Municipal Securities Principal C. Registered Representative D. General Principal
C. Registered Representative
Under FINRA rules, all of the following are necessary to open a corporate account EXCEPT: A. New account form B. Corporate charter C. Shareholder approval D. Corporate resolution
C. Shareholder approval
All of the following items are needed to open a cash account for a customer who gives the information over the phone EXCEPT: A. Customer tax I.D. number B. Name of employer C. Signature of customer D. Signature of registered representative
C. Signature of customer
In order to open a discretionary cash account, all of the following are required EXCEPT: A. Signature of manager on new account form B. Signed trading authorization C. Signed customer's agreement D. Completed customer new account form
C. Signed customer's agreement
A client has an options account that is qualified to buy options and sell covered calls. The client calls his representative, telling him that he wants to sell naked calls in the account. In order to do this, all of the following procedures are required EXCEPT: A. The registered representative must perform a new suitability determination to determine that naked options writing is appropriate for this client B. The "Special Statement for Uncovered Options Writers" must be provided before executing the transaction C. The "Options Disclosure Document" must be provided before executing the transaction D. The Registered Options Principal must reapprove the account for naked options writing
C. The "Options Disclosure Document" must be provided before executing the transaction
A potential customer has visited the registered representative's branch office and is ready to open an account. The representative asks to see the customer's driver's license and the customer says "I will show it to you, but you cannot photocopy it - I am worried about identity theft." Which statement is TRUE? A. The account cannot be opened unless a photocopy of the driver's license is maintained in the customer's account file B. The account cannot be opened unless the branch manager signs a statement that he or she examined the customer's driver's license information and matched it to the new account form record C. The account cannot be opened unless the firm independently verifies the customer's identity using the driver's license information or another non-documentary method D. The account can be opened with no additional documentary procedures required
C. The account cannot be opened unless the firm independently verifies the customer's identity using the driver's license information or another non-documentary method
A married registered representative with 2 children has a client who is her father-in-law. The father-in-law wants to establish a Trust account for his son (the representative's husband) and his 2 grandchildren. The grandfather wants to appoint the representative as the trustee and pay her a trustee fee. Which statement is TRUE about this? A. The registered representative cannot act as the trustee because she is an immediate family member B. The registered representative cannot act as the trustee because she is being paid C. The registered representative cannot act as the trustee because of the conflict of interest D. The registered representative can act as the trustee without restriction
C. The registered representative cannot act as the trustee because of the conflict of interest
A firm holds a joint cash account for a husband and wife. The wife calls the registered representative and says "Sell 500 shares of ABC out of the account immediately and send a check for the proceeds made out to my name." The representative should inform the wife that: A. Her instructions will be followed exactly B. The transaction requires approval of the husband since it is a joint account C. The trade can be performed but the check must be made out to both names on the account D. A written power of attorney must be on file to perform the trade
C. The trade can be performed but the check must be made out to both names on the account
Which statement is TRUE regarding a customer account with a "limited power" third party trading authorization? A. The third party cannot enter unsolicited orders in the account B. The third party can draw checks on the account C. Upon the death of the customer, the power of attorney is revoked D. The third party must sign a limited partnership agreement with the customer
C. Upon the death of the customer, the power of attorney is revoked
All of the following information is needed to open a new cash account for a customer EXCEPT: A. The citizenship of the customer B/ Whether the customer is an officer or director of a publicly held company C. Whether the customer owns the stock of another publicly traded broker-dealer D. Whether the customer is an employee of another broker-dealer
C. Whether the customer owns the stock of another publicly traded broker-dealer
Under FINRA rules, if a member suspects that a senior citizen is being financially exploited: A. A freeze can be placed on all disbursements from the account for up to 10 business days B. A freeze can be placed for up to 10 business days on suspicious disbursements from the account, but not on other non-suspicious disbursements C. A freeze can be placed on all disbursements from the account for up to 15 business days D. A freeze can be placed for up to 15 business days on suspicious disbursements from the account, but not on other non-suspicious disbursements
D. A freeze can be placed for up to 15 business days on suspicious disbursements from the account, but not on other non-suspicious disbursements
All of the following information is required to open an account under FINRA rules EXCEPT: A. The country of citizenship of the customer B. Whether the customer is employed by another financial services firm C. The customer's birthdate D. A letter of reference for the customer
D. A letter of reference for the customer
A social security number or tax identification number must be obtained to open which of the following accounts? A. Partnership Account B. Joint Account C. Corporate Account D. All of the above
D. All of the above
Julia and Jim are the parents of twins who are just turning 4 years old. They want to open a custodial account for each under the Uniform Transfers to Minors Act to start saving for their school expenses. Who can be the custodian in this type of account? A. Only Julia and Jim as joint custodians B. Only Julia or Jim as individual custodian C. Any relative of each child as individual custodian D. Any adult, related or unrelated, as individual custodian
D. Any adult, related or unrelated, as individual custodian
An institutional hedge fund investor will open a prime brokerage account for all of the following reasons EXCEPT to: A. Consolidate account positions with one broker to ease recordkeeping B. Use a variety of executing brokers who, in return for receiving commissions on trade executions, give research to the investor C. Get lower financing rates on borrowed funds because all positions are aggregated D. Be able to charge lower management fees to its investors
D. Be able to charge lower management fees to its investors
The FINRA suitability rule requires all of the following EXCEPT: A. Before a product or strategy can be recommended, a reasonable basis suitability determination must be completed, evaluating the investment's features, returns, costs and risks B. Before a product or strategy can be recommended to a customer, it must be determined that the investment is suitable, based on that client's new account profile C. Before a product or strategy can be recommended to a customer, it must be determined that the customer has the ability to meet the financial commitment required by the recommendation D. Before a product or strategy can be recommended, the registered representative must understand and be able protect the client against the product's inherent risks
D. Before a product or strategy can be recommended, the registered representative must understand and be able protect the client against the product's inherent risks
All of the following statements are true regarding a customer account with a "full power" third party trading authorization EXCEPT: A. Upon the death of the customer, the power of attorney is revoked B. The customer can designate that confirmations be sent only to the third party C. The third party can enter orders in the account D. Checks drawn on the account can be made out to the customer or to the third party
D. Checks drawn on the account can be made out to the customer or to the third party
All of the following information is needed on a new account form EXCEPT: A. Customer name B. Customer address C. Customer occupation D. Customer education
D. Customer education
All of the following procedures are required to open an account for an employee of another municipal securities firm EXCEPT: A. Prior notice of the opening of the account must be given to the municipal employer B. Duplicate trade confirmations must be sent to the municipal employer C. Any instructions of the municipal employer must be followed D. Duplicate account statements must be sent to the municipal employer
D. Duplicate account statements must be sent to the municipal employer
If an employee of another municipal securities firm wishes to open an account at your firm, which statement is TRUE? A. Written notice of the opening of the account must be sent to the MSRB B. A surety bond of $10,000 must be posted before the account can be opened C. Duplicate confirmations must be sent to the MSRB D. Duplicate confirmations must be sent to the employer member
D. Duplicate confirmations must be sent to the employer member
Regarding arbitration agreements between member firms and customers: A. FINRA requires each customer to sign an arbitration agreement as part of the account opening process B. Each member firm requires customers to sign an arbitration agreement which holds the firm harmless if errors occur C. Each member firm must provide the customer with a separate copy of the arbitration agreement for signature and return within 10 days of account opening D. Each member firm must provide the customer with a separate copy of the arbitration agreement for signature and return within 30 days of account opening
D. Each member firm must provide the customer with a separate copy of the arbitration agreement for signature and return within 30 days of account opening
To open an options account, inquiry must be made regarding all of the following aspects of the customer EXCEPT: A. Financial Status B. Marital Status C. Income D. Education
D. Education
To determine the suitability of recommendations made to a customer, inquiry should be made about all of the following EXCEPT: A. Investment objective B. Investment experience C. Financial situation D. Educational background
D. Educational background
To open a joint account for a husband and wife, the social security number to be used for IRS reporting purposes is: A. The husband's social security number B. The wife's social security number C. Both the husband' and wife's social security number D. Either the husband's or wife's social security number
D. Either the husband's or wife's social security number
Under SEC rules, customer account information must be verified by the member firm: A. Within 10 days of account opening B. Within 15 days of account opening C. Every 12 months D. Every 36 months
D. Every 36 months
All of the following persons can approve the opening of an account under MSRB rules EXCEPT the: A. Branch Office Manager B. Municipal Securities Principal C. General Principal D. Financial and Operations Principal
D. Financial and Operations Principal
In order to adequately assess the suitability of a recommendation to a customer that is a senior citizen, the member should make reasonable efforts to obtain all of the following information about the customer EXCEPT: A. Age B. Life stage C. Liquidity needs D. General health status
D. General health status
Under FINRA rules, to ascertain which investments are suitable for a customer, the registered representative would inquire about all of the following EXCEPT: A. Investment objective B. Financial status C. Tax status D. Health status
D. Health status
In order to open a new account for an individual customer, which information is NOT required on the new account form? A. Customer Name B. Residence Address C. Date of Birth D. Highest school grade level completed
D. Highest school grade level completed
Which statement is TRUE regarding joint accounts? A. If a party in a Joint Tenants With Rights of Survivorship account dies, that person's share is excluded from his or her taxable estate B. If a party in a Joint Tenants With Rights of Survivorship account dies, that person's share passes tax free to the beneficiary C. If a party in a Tenancy in Common account dies, that person's share is excluded from his or her taxable estate D. If a party in a Tenancy in Common account dies, his or her share is included in his taxable estate
D. If a party in a Tenancy in Common account dies, his or her share is included in his taxable estate
To open a margin account for a partnership, all of the following documentation is required EXCEPT: A. New account form B. Customer's agreement C. Partnership agreement D. Joint account agreement
D. Joint account agreement
Under the Know Your Customer Rule, in order to open and maintain a customer account, each registered representative must: A. Know "every fact" concerning the customer B. Know "every financial fact" concerning the customer C. Know "every economic fact" concerning a customer D. Know "every essential fact" concerning the customer
D. Know "every essential fact" concerning the customer
When comparing a full power of attorney given in a brokerage account to a limited power of attorney, the person given the: A. Full power of attorney can draw checks only B. Full power of attorney can enter orders only C. Limited power of attorney can draw checks only D. Limited power of attorney can enter orders only
D. Limited power of attorney can enter orders only
Which of the following signatures must appear on the New Account Form when a customer opens a self-directed cash account online? A. Customer B. Manager and Registered Representative C. Registered Representative only D. Manager only
D. Manager only
Mr. Jones, a New York resident, is a widower with a 6 year old son. He opens an account for the son under the Uniform Gifts to Minors Act. Three years later, Mr. Jones remarries, and moves to California, a community property state. Under what conditions can Mrs. Jones enter orders into the UGMA account? A. Only if a power of attorney is granted by the son B. Only if a power of attorney is granted by Mr. Jones C. Mrs. Jones can enter orders without restriction because California is a community property state D. Mrs. Jones can not enter orders into the account under any circumstances
D. Mrs. Jones can not enter orders into the account under any circumstances
A FINRA member firm uses a structure for its wealthy client group where a "team" of registered representatives with differing specializations services those accounts. This is: A. Prohibited under FINRA rules B. Permitted only if a written agreement is signed by all of the representatives in the team C. Permitted only if a record is maintained of the CRD number of each representative assigned to the account D. Permitted only if the firm documents name, role, and responsibilities of each member of the team
D. Permitted only if the firm documents name, role, and responsibilities of each member of the team
In order to open a discretionary margin account, which of the following is NOT required? A. Completed Customer New Account Form B. Signed Trading Authorization C. Signed Customer's Agreement D. Signature of Customer on New Account Form
D. Signature of Customer on New Account Form
A customer wishes to open a new account, but refuses to give his or her social security number and date of birth, claiming that the release of such information would allow the customer's identity to be stolen. Which statement is TRUE? A. As long as the customer signs a statement to the effect that he or she is the true account owner, then the account can be opened B. The account can be opened as long as the firm is able to verify the customer's identity C. The account can be opened as long as the manager approves D. The account cannot be opened
D. The account cannot be opened
A registered representative believes that municipal bonds may be an appropriate investment for her customer. In order to determine whether such a recommendation would be suitable, all of the following would be considered EXCEPT: A. The state in which the customer resides B. The components of the customer's existing portfolio C. Whether the customer is subject to the alternative minimum tax D. The cash balance in the customer's IRA available to invest
D. The cash balance in the customer's IRA available to invest
Which procedure is NOT required for discretionary accounts? A. A written power of attorney must be obtained from the customer before discretionary trades are effected B. Every discretionary order ticket must be approved promptly by the manager or principal C. Every order ticket initiated by the registered representative must be marked "discretionary" D. The customer must be contacted before each discretionary trade is executed
D. The customer must be contacted before each discretionary trade is executed
A customer wishes to give a gift of securities to her nephew under the Uniform Transfers To Minors Act. Which statement is TRUE? A. When the minor reaches legal age in that state, the custodian can continue in that capacity with the express permission of the minor B. When the minor reaches legal age in that state, the account must be transferred into the name of the minor C. At legal age, the account must be liquidated and the proceeds paid to the new adult D. The transfer age is set by the custodian, up to the maximum age permitted by the state
D. The transfer age is set by the custodian, up to the maximum age permitted by the state
All of the following information must be disclosed to a client on Form CRS when opening a new account at a broker-dealer EXCEPT: A. Whether the firm acts as a broker-dealer or an investment adviser in the relationship B. Whether the firm operates under a suitability standard or a fiduciary standard in the relationship C. The type of fees charged by the firm in the relationship D. The type of information collected by the firm about that customer and how it is used
D. The type of information collected by the firm about that customer and how it is used
