Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
Certdemy free practice questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
According to FINRA Rule 4512, which of the following information must be collected and kept in the account’s records for each new account that is opened?
I. Customer’s name, address, and age
II. The names and responsibilities of any persons associated with the account other than the customer
III. Customer’s signature, or the signature of an authorized representative in the case of an institutional customer
IV. The names of any persons authorized to act on the customer’s behalfCorrect
FINRA Rule 4512 requires that for each new account that is opened, the following
information must be collected and kept in the account’s records:
1. Customer’s name, address, and age
2. The names and responsibilities of any persons associated with the account other than the customer
3. Customer’s signature, or the signature of an authorized representative in the case of an institutional customer
4. The names of any persons authorized to act on the customer’s behalfIncorrect
FINRA Rule 4512 requires that for each new account that is opened, the following
information must be collected and kept in the account’s records:
1. Customer’s name, address, and age
2. The names and responsibilities of any persons associated with the account other than the customer
3. Customer’s signature, or the signature of an authorized representative in the case of an institutional customer
4. The names of any persons authorized to act on the customer’s behalf -
Question 2 of 10
2. Question
According to FINRA Rule 4512, which of the following information must be collected and kept in the account’s records for accounts that are not institutional accounts?
I. The customer’s tax identification number
II. Social security number
III. The occupation and name and address of the customer’s employer
IV. The information regarding the customer is an associated person of another member firm or notCorrect
For accounts that are not institutional accounts, the member must also collect the customer’s tax identification number or Social Security number, the occupation and name and address of the customer’s employer and whether the customer is an associated person of another member firm.
Incorrect
For accounts that are not institutional accounts, the member must also collect the customer’s tax identification number or Social Security number, the occupation and name and address of the customer’s employer and whether the customer is an associated person of another member firm.
-
Question 3 of 10
3. Question
According to FINRA Rule 4512, why are all the information to open a new account collected and kept in the account’s records?
I. To protect both the member and the customer
II. To verify the identity of the customer to prevent illegal activity.
III. To prevent unauthorized transactions.
IV. To protect the customer only.Correct
All of this information is collected in order to protect both the member and the customer and to verify the identity of the customer to prevent illegal activity and unauthorized transactions.
Incorrect
All of this information is collected in order to protect both the member and the customer and to verify the identity of the customer to prevent illegal activity and unauthorized transactions.
-
Question 4 of 10
4. Question
According to FINRA Rule 5230, which of the following(s) is (are) not the specific exemptions laid out in the rule?
I. A communication that is clearly an advertisement
II. A communication that includes a disclosure of the amount of compensation received
III. Any publications that occur via the Internet, television, and in writing
IV. A research report, as specifically defined by NASD Rule 2711Correct
There are specific exemptions laid out in the rule, including the following:
A communication that is clearly an advertisement
A communication that includes a disclosure of the amount of compensation received
A research report, as specifically defined by NASD Rule 2711Incorrect
There are specific exemptions laid out in the rule, including the following:
A communication that is clearly an advertisement
A communication that includes a disclosure of the amount of compensation received
A research report, as specifically defined by NASD Rule 2711 -
Question 5 of 10
5. Question
In order to comply with Rule 482 of the Securities Act of 1933, which of the following(s) must be included in performance data?
I. A legend disclosing that the performance data quoted represents past performance; that past performance does not guarantee future results;
II. A legend disclosing that the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed.
III. If a sales load or any other nonrecurring fee is charged, the maximum amount of the load or fee
IV. If the sales load or fee is not reflected, a statement that the performance data does not reflect the deduction of the sales load or fee.Correct
In order to comply with Rule 482 of the Securities Act of 1933, any investment company advertisements including performance data must include the following:
i. A legend disclosing that the performance data quoted represents past performance; that past performance does not guarantee future results; that the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; and that current performance may be lower or higher than the performance data quoted. The legend should also identify either a toll-free (or collect) telephone number or a Web site where an investor may obtain performance data current to the most recent month-end unless the advertisement includes total return quotations current to the most recent month ended seven business days prior to the date of use. An advertisement for a money market fund may omit the disclosure about principal value fluctuation; and
ii. If a sales load or any other nonrecurring fee is charged, the maximum amount of the load or fee, and if the sales load or fee is not reflected, a statement that the performance data does not reflect the deduction of the sales load or fee, and that, if reflected, the load or fee would reduce the performance quoted.Incorrect
In order to comply with Rule 482 of the Securities Act of 1933, any investment company advertisements including performance data must include the following:
i. A legend disclosing that the performance data quoted represents past performance; that past performance does not guarantee future results; that the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; and that current performance may be lower or higher than the performance data quoted. The legend should also identify either a toll-free (or collect) telephone number or a Web site where an investor may obtain performance data current to the most recent month-end unless the advertisement includes total return quotations current to the most recent month ended seven business days prior to the date of use. An advertisement for a money market fund may omit the disclosure about principal value fluctuation; and
ii. If a sales load or any other nonrecurring fee is charged, the maximum amount of the load or fee, and if the sales load or fee is not reflected, a statement that the performance data does not reflect the deduction of the sales load or fee, and that, if reflected, the load or fee would reduce the performance quoted. -
Question 6 of 10
6. Question
Which of the following sales literature must contain?
I. Advertisements used prior to the effectiveness of the registration statement must include a “subject to completion” legend
II. Advertisements including performance data must include
III. A toll-free phone line to obtain the most current performance data as of the most recent month-end
IV. Maximum loads or fees that could be charged under the product.Correct
Specifically, sales literature must contain the following:
• A statement that advises an investor to consider the investment objectives, risks and charges and expenses of the investment company carefully before investing, explains where the investor may obtain the prospectus and statement of additional information and that the prospectus should be read carefully before investing
• Advertisements used prior to the effectiveness of the registration statement must include a “subject to completion” legend
• Advertisements including performance data must include
• A legend disclosing that data quoted represents past performance and that past performance does not guarantee future results
• The investment return and principal value of an investment will fluctuate and the value may be worth more or less than the original investment
• A toll-free phone line to obtain the most current performance data as of the most recent month-end
• Maximum loads or fees that could be charged under the product.Incorrect
Specifically, sales literature must contain the following:
• A statement that advises an investor to consider the investment objectives, risks and charges and expenses of the investment company carefully before investing, explains where the investor may obtain the prospectus and statement of additional information and that the prospectus should be read carefully before investing
• Advertisements used prior to the effectiveness of the registration statement must include a “subject to completion” legend
• Advertisements including performance data must include
• A legend disclosing that data quoted represents past performance and that past performance does not guarantee future results
• The investment return and principal value of an investment will fluctuate and the value may be worth more or less than the original investment
• A toll-free phone line to obtain the most current performance data as of the most recent month-end
• Maximum loads or fees that could be charged under the product. -
Question 7 of 10
7. Question
According to FINRA Rule 2020, which of the following(s) statement is(are) true about the use of Manipulative, Deceptive or Other Fraudulent Devices?
I. No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive, or other fraudulent device or contrivance.
II. The importance of FINRA Rule 2020 is in ensuring the integrity of the capital markets and the confidence of retail investors that the markets are not “rigged” for the smaller, individual investors or those with critical inside information.
III. A member would be in violation of Rule 2020 if he used falsified, enhanced financial reports to entice an investor to purchase a certain security.
IV. In addition to being dishonest and illegal, such activities have significantly negative repercussions for the markets as they reduce market efficiency and drastically reduce market participation among smaller investors if discovered.Correct
FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent Devices states: “No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive, or other fraudulent device or contrivance.” The importance of this rule is in ensuring the integrity of the capital markets and the confidence of retail investors that the markets are not “rigged” for the larger, institutional investors or those with critical inside information. A member would be in violation of Rule 2020 if he used falsified, enhanced financial reports to entice an investor to purchase a certain security. In addition to being dishonest and illegal, such activities have significantly negative repercussions for the markets as they reduce market efficiency and drastically reduce market participation among smaller investors if discovered.
Incorrect
FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent Devices states: “No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive, or other fraudulent device or contrivance.” The importance of this rule is in ensuring the integrity of the capital markets and the confidence of retail investors that the markets are not “rigged” for the larger, institutional investors or those with critical inside information. A member would be in violation of Rule 2020 if he used falsified, enhanced financial reports to entice an investor to purchase a certain security. In addition to being dishonest and illegal, such activities have significantly negative repercussions for the markets as they reduce market efficiency and drastically reduce market participation among smaller investors if discovered.
-
Question 8 of 10
8. Question
“Members shall deal with non-members at the same prices, fees, and terms and commissions as in their dealings with the general public”- which rule does state this?
Correct
NASD Rule 2420 states that members shall deal with non-members at the same prices, fees, and terms and commissions as in their dealings with the general public.
Incorrect
NASD Rule 2420 states that members shall deal with non-members at the same prices, fees, and terms and commissions as in their dealings with the general public.
-
Question 9 of 10
9. Question
Which of the following statement is true about Rule 504?
Correct
Rule 504 provides an exemption for companies to offer and sell up to $1 million of their securities in a 12-month period
Incorrect
Rule 504 provides an exemption for companies to offer and sell up to $1 million of their securities in a 12-month period
-
Question 10 of 10
10. Question
Which of the following statement is true about Rule 505?
Correct
Rule 505 provides an exemption for companies to offer and sell up to $5 million of their securities in a 12-month period.
Incorrect
Rule 505 provides an exemption for companies to offer and sell up to $5 million of their securities in a 12-month period.