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Question 1 of 10
1. Question
What does an individual registration ownership?
Correct
An individual registration ownership of mutual fund shares means that there is only one individual owner and beneficial recipient of the securities in the account. Only this individual may authorize transactions on behalf of the account. When the owner of the account dies, the owner’s will dictates the distribution of the account’s assets. If no will exists, state and federal laws dictating estate distribution and beneficiaries will dictate the distributions.
Incorrect
An individual registration ownership of mutual fund shares means that there is only one individual owner and beneficial recipient of the securities in the account. Only this individual may authorize transactions on behalf of the account. When the owner of the account dies, the owner’s will dictates the distribution of the account’s assets. If no will exists, state and federal laws dictating estate distribution and beneficiaries will dictate the distributions.
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Question 2 of 10
2. Question
Which of the following is a form of mutual fund account ownership?
Correct
Tenants in common is another form of mutual fund account ownership (in addition to joint tenants with rights of survivorship); however, these two forms differ from each other in a number of key features. For instance, whereas the account is owned in equal proportions by each owner within the joint tenants with rights of survivorship, the account can be divided into specific ownership proportions under tenants in common.
Incorrect
Tenants in common is another form of mutual fund account ownership (in addition to joint tenants with rights of survivorship); however, these two forms differ from each other in a number of key features. For instance, whereas the account is owned in equal proportions by each owner within the joint tenants with rights of survivorship, the account can be divided into specific ownership proportions under tenants in common.
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Question 3 of 10
3. Question
What is the person who manages the UGMA called?
Correct
The adult who manages the UGMA is called a custodian. All assets within a UGMA are held in the custodian’s name until the minor reaches the age of majority. The age of majority depends on the laws of each state. The custodian of the account has full rights over that account until the minor reaches the age of majority. A custodian may manage several accounts and a minor may be the principal in multiple accounts.
Incorrect
The adult who manages the UGMA is called a custodian. All assets within a UGMA are held in the custodian’s name until the minor reaches the age of majority. The age of majority depends on the laws of each state. The custodian of the account has full rights over that account until the minor reaches the age of majority. A custodian may manage several accounts and a minor may be the principal in multiple accounts.
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Question 4 of 10
4. Question
Which of the following statements is true regarding UGMA account?
Correct
The acronym UGMA stands for a Uniform Gift to Minors Account. UGMA accounts allow adults to open and manage a trade account for the benefit of an underage individual. The adult who manages the UGMA is called a custodian. All assets within a UGMA are held in the custodian’s name until the minor reaches the age of majority. However, any single account can have only one custodian and one minor. The custodian has a fiduciary responsibility to ensure the account is maintained properly for the benefit of the minor.
Incorrect
The acronym UGMA stands for a Uniform Gift to Minors Account. UGMA accounts allow adults to open and manage a trade account for the benefit of an underage individual. The adult who manages the UGMA is called a custodian. All assets within a UGMA are held in the custodian’s name until the minor reaches the age of majority. However, any single account can have only one custodian and one minor. The custodian has a fiduciary responsibility to ensure the account is maintained properly for the benefit of the minor.
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Question 5 of 10
5. Question
Which of the following statements is true regarding discretionary accounts?
Correct
Discretionary accounts are accounts where a broker is authorized to make securities transactions on the client’s behalf without the client’s consent. These require the signing of a discretionary disclosure for written confirmation.
Incorrect
Discretionary accounts are accounts where a broker is authorized to make securities transactions on the client’s behalf without the client’s consent. These require the signing of a discretionary disclosure for written confirmation.
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Question 6 of 10
6. Question
Which of the following is one of the inclusions of Memorandum of each purchase and sale for the account of the firm?
Correct
Memorandum of each purchase and sale for the account of the firm – including the price, the time of execution, and if the transaction was with a customer other than a broker or dealer, a memorandum of each order received showing the time of receipt, the terms and conditions; the identity of each associated person responsible for the account; and the identity of the person who entered or accepted the order.
Incorrect
Memorandum of each purchase and sale for the account of the firm – including the price, the time of execution, and if the transaction was with a customer other than a broker or dealer, a memorandum of each order received showing the time of receipt, the terms and conditions; the identity of each associated person responsible for the account; and the identity of the person who entered or accepted the order.
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Question 7 of 10
7. Question
Which of the following statements is true regarding ACATS?
Correct
The Automated Customer Account Transfer Service allows broker/dealers to transfer funds and securities to other broker/dealers electronically. The receiving firm will provide an ACAT form to the sending firm that requests the funds and/or securities. The holding firm must respond to the request in one business day after they receive the request. They must fulfill the request unless the account does not contain transferable assets, the customer’s social is incorrect, the registration of the account requested does not match their records, or there is no signature (or an irregular customer signature) on the form. If the form is rejected, action must be taken by the applicable firm within 5 business days.
Incorrect
The Automated Customer Account Transfer Service allows broker/dealers to transfer funds and securities to other broker/dealers electronically. The receiving firm will provide an ACAT form to the sending firm that requests the funds and/or securities. The holding firm must respond to the request in one business day after they receive the request. They must fulfill the request unless the account does not contain transferable assets, the customer’s social is incorrect, the registration of the account requested does not match their records, or there is no signature (or an irregular customer signature) on the form. If the form is rejected, action must be taken by the applicable firm within 5 business days.
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Question 8 of 10
8. Question
Which of the following statements is true regarding FINRA Rule 2267?
Correct
Investor education and protection (FINRA Rule 2267) – a member is to annually provide in writing to every customer the FINRA BrokerCheck Hotline number, the FINRA web-site address, and a statement informing the customer of an available BrokerCheck brochure.
Incorrect
Investor education and protection (FINRA Rule 2267) – a member is to annually provide in writing to every customer the FINRA BrokerCheck Hotline number, the FINRA web-site address, and a statement informing the customer of an available BrokerCheck brochure.
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Question 9 of 10
9. Question
“A member may not exercise its own discretion in a customer’s account unless they have received written authorization from the customer,” under which rule is this statement mentioned?
Correct
Authorization and acceptance of account – a member may not exercise its own discretion in a customer’s account unless they have received written authorization from the customer.
Incorrect
Authorization and acceptance of account – a member may not exercise its own discretion in a customer’s account unless they have received written authorization from the customer.
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Question 10 of 10
10. Question
Which of the following statements is true regarding Rule 17a-4?
Correct
Records to be preserved by certain exchange members, brokers and dealers (Rule 17a-4) – every broker and dealer is to keep general records for six years. For the first two years of record retention, the records are to be kept in an easily accessible place. Records of associated persons are to be kept until three years after the person’s employment has terminated. Records can be produced or reproduced on micrographic media. If records are to be maintained by an outside service bureau, such bureau is to file with the Commission.
Incorrect
Records to be preserved by certain exchange members, brokers and dealers (Rule 17a-4) – every broker and dealer is to keep general records for six years. For the first two years of record retention, the records are to be kept in an easily accessible place. Records of associated persons are to be kept until three years after the person’s employment has terminated. Records can be produced or reproduced on micrographic media. If records are to be maintained by an outside service bureau, such bureau is to file with the Commission.