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Question 1 of 10
1. Question
Uner FNIRA Rule 2262, when is the last time for a member of sending a written disclosure of control relationship with the issuer?
Correct
A member controlled or under common control with the issuer shall disclose the presence of such control to that client and, if such disclosure is not produced in writing, it shall be accompanied by providing or sending written disclosure at or before the transaction is completed.
Incorrect
A member controlled or under common control with the issuer shall disclose the presence of such control to that client and, if such disclosure is not produced in writing, it shall be accompanied by providing or sending written disclosure at or before the transaction is completed.
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Question 2 of 10
2. Question
Under Rule 2269, which of the following statement is true regarding primary and secondary distributions?
Correct
A member who acts as a broker for a customer or dealer shall, at or before the completion of any transaction for or with that customer, provide such customer with written notification of the existence of such participation or interest in any security in the primary or secondary distribution in which that member participates or is otherwise financially interested.
Incorrect
A member who acts as a broker for a customer or dealer shall, at or before the completion of any transaction for or with that customer, provide such customer with written notification of the existence of such participation or interest in any security in the primary or secondary distribution in which that member participates or is otherwise financially interested.
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Question 3 of 10
3. Question
As per FINRA Rule 2111, which of the following are required in a customer’s investment profile?
i) age of the customer
ii) financial information
iii) purpose of investment
iv) qualification
v) tax statusCorrect
The investment profile of a client involves, but is not restricted to, the age of the client, other investments, economic position and needs, tax status, investment goals, investment experience, investment time horizon, liquidity needs, risk tolerance and any other data that the client may disclose in connection with such advice to the member or associate individual.
Incorrect
The investment profile of a client involves, but is not restricted to, the age of the client, other investments, economic position and needs, tax status, investment goals, investment experience, investment time horizon, liquidity needs, risk tolerance and any other data that the client may disclose in connection with such advice to the member or associate individual.
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Question 4 of 10
4. Question
What does rule 2111 inform regarding institutional account?
Correct
For an institutional account, a member shall fulfill the customer-specific suitability obligation if he believes that the customer is capable of evaluating investment risk on his own and exercises independent judgment in evaluating member’s recommendations.
Incorrect
For an institutional account, a member shall fulfill the customer-specific suitability obligation if he believes that the customer is capable of evaluating investment risk on his own and exercises independent judgment in evaluating member’s recommendations.
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Question 5 of 10
5. Question
As mentioned in FINRA Rule 2360, what does the term “class of options” refer to?
Correct
The term refers to those option contracts that have the same type of option and mention the same type of index.
Incorrect
The term refers to those option contracts that have the same type of option and mention the same type of index.
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Question 6 of 10
6. Question
According to FINRA Rule 2360, if an option holder has a call for 1000 shares of a stock for an exercise price of $45 and holds an ownership interest of 8%, what would be the aggregate exercise price?
Correct
As per Rule, the formula of the aggregate exercise price is exercise price per unit multiplied by the number of units specified in the contract. Hence, the answer is $45,000.
Incorrect
As per Rule, the formula of the aggregate exercise price is exercise price per unit multiplied by the number of units specified in the contract. Hence, the answer is $45,000.
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Question 7 of 10
7. Question
Which term, as per FINRA Rule 2360, indicates the intention of a seller to reduce a long in options involving transactions?
Correct
The term “closing sale transaction” implies an option transaction in which the purpose of the seller is to decrease or eliminate a long position in that transaction’s sequence of choices.
Incorrect
The term “closing sale transaction” implies an option transaction in which the purpose of the seller is to decrease or eliminate a long position in that transaction’s sequence of choices.
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Question 8 of 10
8. Question
Under FINRA Rule 2360, which of the following ownership interest percentage will not prevent aggregation?
Correct
If a person or entity has a control, it will be presumed. Holds 10% or more of an entity’s ownership interest. Ownership interest of less than 10% does not preclude aggregation.
Incorrect
If a person or entity has a control, it will be presumed. Holds 10% or more of an entity’s ownership interest. Ownership interest of less than 10% does not preclude aggregation.
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Question 9 of 10
9. Question
Under Rule 2360, which factor does FINRA consider to check if there is any requirement of aggregation of accounts?
Correct
FINRA checks similar patterns of trading activity with separate entities to check if the aggregation of accounts is required or not.
Incorrect
FINRA checks similar patterns of trading activity with separate entities to check if the aggregation of accounts is required or not.
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Question 10 of 10
10. Question
As mentioned in FINRA Rule 2360, what is the minimum amount of equity securities that satisfy the term conventional index option?
Correct
The term “conventional index option” refers to any contract options not issued or issued by The Options Clearing Corporation or an OCC Cleared OTC option that, as of the date of trading, exceeds a basket or index of securities that satisfies the basket or index of 9 or more securities.
Incorrect
The term “conventional index option” refers to any contract options not issued or issued by The Options Clearing Corporation or an OCC Cleared OTC option that, as of the date of trading, exceeds a basket or index of securities that satisfies the basket or index of 9 or more securities.