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Question 1 of 10
1. Question
Which of the following statement is true regarding broker?
I. A person engaged in the business of only buying securities on behalf of others
II. A person engaged in the business of only selling securities on behalf of others
III. A person engaged in the business of buying and selling securities on behalf of others
IV. Fulfills transaction orders placed by brokers free of cost
Correct
Broker is defined as any person engaged in the business of buying and selling
securities on behalf of others, usually fulfilling transaction orders placed by
investors in exchange for a fee.Incorrect
Broker is defined as any person engaged in the business of buying and selling
securities on behalf of others, usually fulfilling transaction orders placed by
investors in exchange for a fee. -
Question 2 of 10
2. Question
Which of the following is not the work of a dealer?
Correct
Dealer is defined as any person engaged in the business of buying and selling
securities for his own account, through a broker or otherwise.Incorrect
Dealer is defined as any person engaged in the business of buying and selling
securities for his own account, through a broker or otherwise. -
Question 3 of 10
3. Question
Which of the following statements is true regarding Investment Contract?
I. It is defined as any contract, transaction, or scheme whereby a person invests money in a common enterprise
II. It is led to expect profits solely from the efforts of the promoter or third party
III. It is defined as any contract, transaction, or scheme whereby only the company invests money in a common enterprise
IV. It is led to decline profits from the efforts of the promoter or third party
Correct
Investment Contract is defined as any contract, transaction, or scheme whereby a person invests money in a common enterprise and is led to expect profits solely from the efforts of the promoter or third party.
Incorrect
Investment Contract is defined as any contract, transaction, or scheme whereby a person invests money in a common enterprise and is led to expect profits solely from the efforts of the promoter or third party.
-
Question 4 of 10
4. Question
How is the statutory disqualification considered?
Correct
The vague definition has been the subject of a great deal of Supreme Court activity in the interpretation of whether or not certain transactions qualify as investment contracts, thus requiring registration.
One is subject to a statutory disqualification if such person (i) has been and is
expelled or suspended from membership or participation with any member or selfregulatory organization, (ii) is subject to an order of the SEC denying, suspending, or revoking registration or barring or suspending association with a member, or (iii) has been found to be the cause of any suspension, expulsion, or order mentioned above.Incorrect
The vague definition has been the subject of a great deal of Supreme Court activity in the interpretation of whether or not certain transactions qualify as investment contracts, thus requiring registration.
One is subject to a statutory disqualification if such person (i) has been and is
expelled or suspended from membership or participation with any member or selfregulatory organization, (ii) is subject to an order of the SEC denying, suspending, or revoking registration or barring or suspending association with a member, or (iii) has been found to be the cause of any suspension, expulsion, or order mentioned above. -
Question 5 of 10
5. Question
Which of the following statements is true regarding FINRA?
I. It refers to Financial Industry Regulatory Authority
II. It is the largest independent regulator of securities firms in the United States
III. Its mission is to protect America’s investors by making sure the securities industry operates fairly and honestly
IV. Its mission is stated on their office’s notice board
Correct
The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator of securities firms in the United States. As stated on their website, “FINRA’s mission is to protect America’s investors by making sure the securities industry operates fairly and honestly.”
Incorrect
The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator of securities firms in the United States. As stated on their website, “FINRA’s mission is to protect America’s investors by making sure the securities industry operates fairly and honestly.”
-
Question 6 of 10
6. Question
Which of the following is not their mission?
Correct
FINRA’s mission is accomplished through a
number of educational and regulatory tools, including all of the following:
1. Providing for the registration and education of all securities brokers
2. Conducting routine examinations of securities firms and their compliance
with established procedures and record-keeping requirements
3. Monitoring trading on national securities exchanges
4. Developing new rules and regulations to react to changing market conditions and technology
5. Enforcing the rules and regulations, including the imposition of fines and civil and criminal penalties on violators
6. Providing a forum for arbitration and dispute resolutionIncorrect
FINRA’s mission is accomplished through a
number of educational and regulatory tools, including all of the following:
1. Providing for the registration and education of all securities brokers
2. Conducting routine examinations of securities firms and their compliance
with established procedures and record-keeping requirements
3. Monitoring trading on national securities exchanges
4. Developing new rules and regulations to react to changing market conditions and technology
5. Enforcing the rules and regulations, including the imposition of fines and civil and criminal penalties on violators
6. Providing a forum for arbitration and dispute resolution -
Question 7 of 10
7. Question
Which of the following statements is false regarding FINRA’s by-laws persons eligibility to become members ?
I. The registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer unauthorized to transact
II. whose regular course of business consists in actually transacting
III. branch of the investment banking or securities business in the United States
IV. It’s under the laws of the United States
Correct
FINRA’s by-laws define persons eligible to become members and associated
persons of members as “any registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer authorized to transact, and whose regular course of business consists in actually transacting, any branch of the investment banking or securities business in the United States, under the laws of the United States, shall be eligible for membership in the Corporation.”Incorrect
FINRA’s by-laws define persons eligible to become members and associated
persons of members as “any registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer authorized to transact, and whose regular course of business consists in actually transacting, any branch of the investment banking or securities business in the United States, under the laws of the United States, shall be eligible for membership in the Corporation.” -
Question 8 of 10
8. Question
How will the eligibility be revoked?
Correct
There are exceptions to the eligibility rule, however, insofar as eligibility will be revoked if the member is subject to a disqualification or fails to continue to satisfy the filing requirements of the by-laws.
Incorrect
There are exceptions to the eligibility rule, however, insofar as eligibility will be revoked if the member is subject to a disqualification or fails to continue to satisfy the filing requirements of the by-laws.
-
Question 9 of 10
9. Question
Which of the following statements is true regarding application membership?
I. must include an agreement to abide by the rules of all applicable federal and regulatory bodies
II. must include an agreement to pay dues and assessments as required
III. must include an agreement to disobey the rules of all applicable federal and regulatory bodies
IV. must include any other such information required by the corporation
Correct
The application membership must include an agreement to abide by the rules of all applicable federal and regulatory bodies, an agreement to pay dues and assessments as required, and any other such information required by the corporation.
Incorrect
The application membership must include an agreement to abide by the rules of all applicable federal and regulatory bodies, an agreement to pay dues and assessments as required, and any other such information required by the corporation.
-
Question 10 of 10
10. Question
Which of the following statements is true regarding notification of termination ?
I. After 30 days a member must give notice of the termination to FINRA
II. Besides to FINRA, a copy must also be provided to the terminated person
III. Within a month a member must give notice of the termination to FINRA
IV. Any copy is not sent to FINRA
Correct
Within 30 days following the termination of an associated person, a member must give notice of the termination to FINRA. An additional copy of the notice provided to FINRA must also be provided to the terminated person.
Incorrect
Within 30 days following the termination of an associated person, a member must give notice of the termination to FINRA. An additional copy of the notice provided to FINRA must also be provided to the terminated person.