FINRA Series 31 - Quiz 2 - Pauline.new
Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
certdemy 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
Under the portfolio margin, which of the following means that no member requires margin in any portfolio account shall permit the aggregate portfolio requirements to exceed ten times its net capital for any period exceeding three business days?
Correct
Under the portfolio margin is the net capital treatment of portfolio margin accounts, it is stated that no member requires any margin in a portfolio account shall document the aggregate portfolio margin requirements more than ten times of its net capital for a period beyond three business days. At the beginning of the fourth business day, the member shall conclude opening new portfolio margin accounts until the agreement is accomplished.
Incorrect
Under the portfolio margin is the net capital treatment of portfolio margin accounts, it is stated that no member requires any margin in a portfolio account shall document the aggregate portfolio margin requirements more than ten times of its net capital for a period beyond three business days. At the beginning of the fourth business day, the member shall conclude opening new portfolio margin accounts until the agreement is accomplished.
-
Question 2 of 10
2. Question
What is a document that is a legally binding agreement between two parties to buy or sell a specific quantity of shares of an individual stock or a narrow-based security index at a specified price, on a specified date in the future?
Correct
In a Security Futures Contract, it shows the binding agreement between two parties legally. It shows the buying and selling of a specific quantity of shares of an individual at a stated price on a specific date in the future. When buying a futures contract, an individual must know that he or she is entering into a contract in buying underlying security and it is said to be a “long” contract. Lastly, when selling a futures contract, an individual is entering a contract in selling underlying security and it is called a “short” contract.
Incorrect
In a Security Futures Contract, it shows the binding agreement between two parties legally. It shows the buying and selling of a specific quantity of shares of an individual at a stated price on a specific date in the future. When buying a futures contract, an individual must know that he or she is entering into a contract in buying underlying security and it is said to be a “long” contract. Lastly, when selling a futures contract, an individual is entering a contract in selling underlying security and it is called a “short” contract.
-
Question 3 of 10
3. Question
What shows the contract specification that may vary from contract to contract?
Correct
Under the Variety of Security Futures Contracts, the specifications of the contract may vary from contract to contract. Most security futures contracts require an individual to settle by making physical delivery of the underlying security, rather than making a settlement in cash. An individual must thoroughly review the settlement and condition regarding delivery before being involved in a security futures contract.
Incorrect
Under the Variety of Security Futures Contracts, the specifications of the contract may vary from contract to contract. Most security futures contracts require an individual to settle by making physical delivery of the underlying security, rather than making a settlement in cash. An individual must thoroughly review the settlement and condition regarding delivery before being involved in a security futures contract.
-
Question 4 of 10
4. Question
Which of the following is the most common type of investor order?
Correct
In the three primary categories of order, Market Order is the utmost common type of investor. This order is generally executed immediately because there are no restrictions involved. An individual can also get the most certainty that his or her order will be executed, but an individual will not be getting a guarantee on the execution price. This order will be executed at or the current bid or he or she can ask for the prices in the marketplace. Lastly, an individual may have a downside regarding this order, specifically in fast-moving markets, because he or she may not get the price he or she originally quoted.
Incorrect
In the three primary categories of order, Market Order is the utmost common type of investor. This order is generally executed immediately because there are no restrictions involved. An individual can also get the most certainty that his or her order will be executed, but an individual will not be getting a guarantee on the execution price. This order will be executed at or the current bid or he or she can ask for the prices in the marketplace. Lastly, an individual may have a downside regarding this order, specifically in fast-moving markets, because he or she may not get the price he or she originally quoted.
-
Question 5 of 10
5. Question
Which of the following type of orders is for investors who know the price they want for a particular security transaction and want to manage market risk?
Correct
One of the types of orders is the Limit Order, this order is pertaining to buying or selling of a security at or better than its specified prices or also known as its limit price. This type of order provides a guarantee to an individual regarding the buying of order and selling of orders that are not executed above its maximum price and below a set minimum, respectively. This means that an individual can guarantee that he or she can get his or her limited price or a better price if an individual’s order is executed.
Incorrect
One of the types of orders is the Limit Order, this order is pertaining to buying or selling of a security at or better than its specified prices or also known as its limit price. This type of order provides a guarantee to an individual regarding the buying of order and selling of orders that are not executed above its maximum price and below a set minimum, respectively. This means that an individual can guarantee that he or she can get his or her limited price or a better price if an individual’s order is executed.
-
Question 6 of 10
6. Question
Which of the following does FINRA believes is the use of Disclosure Statement?
II. This statement will facilitate the delivery of breakpoint discounts
II. One use of this is that it will help investors in making appropriate choices
III. This will help customers in making decisions
IV. This document will not help any member with the rules of selling mutual fundsCorrect
This Disclosure Statement, believed by FINRA, will help associated persons and members in educating investors about the accessibility of breakpoint discounts. It will not just help investors but also investment advisors in making suitable choices from the several share classes available for investors. FINRA provided this Written Disclosure Statement because it is an example of what FINRA believes that is appropriate. In this document, members may use this Disclosure Statement to know and reflect the rules regarding the selling of mutual funds.
Incorrect
This Disclosure Statement, believed by FINRA, will help associated persons and members in educating investors about the accessibility of breakpoint discounts. It will not just help investors but also investment advisors in making suitable choices from the several share classes available for investors. FINRA provided this Written Disclosure Statement because it is an example of what FINRA believes that is appropriate. In this document, members may use this Disclosure Statement to know and reflect the rules regarding the selling of mutual funds.
-
Question 7 of 10
7. Question
Which of the following are contained in the Options Disclosure Document?
I. This document accommodated foreign index options
II. This document does not include the implied volatility index options
III. This options disclosure document provides additional contract adjustment disclosures
IV. It does not reflect any settlementCorrect
This October 2018 supplement was approved by the Securities and Exchange Community (SEC) to the Options Disclosure Document. It comprises the overall disclosures on the features and risks of trading standardized options. This supplement amends the April 2015 supplement which accommodated foreign index choices and firm implied volatility index options. It also consists of additional contract adjustment disclosures. Lastly, it does reflect a settlement which is the T+2 settlement.
Incorrect
This October 2018 supplement was approved by the Securities and Exchange Community (SEC) to the Options Disclosure Document. It comprises the overall disclosures on the features and risks of trading standardized options. This supplement amends the April 2015 supplement which accommodated foreign index choices and firm implied volatility index options. It also consists of additional contract adjustment disclosures. Lastly, it does reflect a settlement which is the T+2 settlement.
-
Question 8 of 10
8. Question
In the Margin Disclosure Statement regarding the purchasing of securities, when can an individual pay for the securities?
I. The individual must have a down payment before purchasing such securities
II. Individuals can pay the securities in full
III. It can be paid by borrowing part of the purchase price from the brokerage firm
IV. The securities can be paid in installmentCorrect
As stated in the Margin Disclosure Statement regarding the purchase of such securities, an individual can pay in full or can borrow from a brokerage firm a part of the purchase price. If an individual chooses to borrow from the firm, he or she must open a margin account with the firm. The collateral of the firm from an individual is the purchased securities. In this case, If the account in value declined, so does the value of the collateral support in an individual’s loan. A firm can take a specific action, such as issuing a margin call or selling securities in an account of an individual.
Incorrect
As stated in the Margin Disclosure Statement regarding the purchase of such securities, an individual can pay in full or can borrow from a brokerage firm a part of the purchase price. If an individual chooses to borrow from the firm, he or she must open a margin account with the firm. The collateral of the firm from an individual is the purchased securities. In this case, If the account in value declined, so does the value of the collateral support in an individual’s loan. A firm can take a specific action, such as issuing a margin call or selling securities in an account of an individual.
-
Question 9 of 10
9. Question
Which of the following are the risks in trading securities margin?
I. An individual can lose more funds than you deposit in the margin account
II. Individuals are not entitled to choose which securities are liquidated or sold to meet a margin call
III. There are no risks involved for the firm and an individual
IV. An individual is not entitled to an extension of time on a margin callCorrect
In trading securities on margin, an individual must thoroughly understand the risks involved. There are risks that involve an individual and even the firm. The following risks stated are the risks that an individual can encounter: (1) individuals can lose more funds than you deposit in the margin account, (2) individuals are not entitled to choose which securities are liquidated or sold to meet a margin call, and (3) individuals are not entitled to an extension of time on a margin call. Other risks involved in trading securities on margin are firms can force the sale of securities in the account of an individual, they can also sell an individual’s securities without contacting the person, and the firm can increase its requirements regarding the “house” maintenance margin at any time and will not provide any written notice in advance.
Incorrect
In trading securities on margin, an individual must thoroughly understand the risks involved. There are risks that involve an individual and even the firm. The following risks stated are the risks that an individual can encounter: (1) individuals can lose more funds than you deposit in the margin account, (2) individuals are not entitled to choose which securities are liquidated or sold to meet a margin call, and (3) individuals are not entitled to an extension of time on a margin call. Other risks involved in trading securities on margin are firms can force the sale of securities in the account of an individual, they can also sell an individual’s securities without contacting the person, and the firm can increase its requirements regarding the “house” maintenance margin at any time and will not provide any written notice in advance.
-
Question 10 of 10
10. Question
Which of the following information is contained in the Disclosure Document?
I. The tax consequences regarding the trading options are included
II. Identification of the issuer of the option and the instrument underlying options class are provided
III. A conventional index option is included in this document
IV. Prices must also be stated in this documentCorrect
This disclosure document is filed with the SEC. There is different information that is included in this document such as the overall information regarding the mechanics of buying options, the uses for the options, costs of the transaction, and margin requirements. This document is also prepared by one or more option requirements. Lastly, the availability of the prospectus is also included in this document.
Incorrect
This disclosure document is filed with the SEC. There is different information that is included in this document such as the overall information regarding the mechanics of buying options, the uses for the options, costs of the transaction, and margin requirements. This document is also prepared by one or more option requirements. Lastly, the availability of the prospectus is also included in this document.