Series 4 Free Practice Exam Quiz 06

According to FINRA rule 4210, the following contracts under category (4) must be for a principal amount of not less than $500,000 is true in Stock Options:
(a) Any excess of the aggregate exercise price of the option over the current market value of the underlying principal amount.
(b) Any excess of the current market value of the underlying principal amount over the aggregate exercise price of the option

According to FINRA rule 4210, The following situation is correct if the current highest qualifying rate is less than 8 percent :
(a) The multiplier factor shall be then current highest qualifying rate is greater than or equal to 8 percent but less than 10 percent
(b) The multiplier factor shall be then current highest qualifying rate is greater than or equal to 10 percent but less than 12 percent
(c) The multiplier factor shall be then current highest qualifying rate is greater than or equal to 12 percent but less than 14 percent

According to FINRA rule 4210 it needs 20 percent for Initial and/or Maintenance Margin Required in type option Stock Index Warrant on Broad Index Stock Group.

According to FINRA rule 4210, the following are the requirements to set forth the minimum amount of margin that must be maintained in margin accounts of customers having positions in components underlying options:
(a) The option or warrant must be listed or OTC (as defined in this Rule)
(b) The case of a call or warrant carried in a short position
(c) Long position in the underlying component shall be valued at no more than the call/warrant exercise price for margin equity purposes

According to FINRA rule 4210 the listed or OTC put or call option or stock index warrant will carried “short” in the account of a customer, against an escrow agreement

According to FINRA rule 4210, the following describes Reverse Conversions?
(a) When a put or warrant carried in a “short” position is covered by a “short” position in equivalent units of the underlying component
(b) Carried with a “long” call or warrant specifying equivalent units of the same underlying component and having the same exercise price and expiration date as the “short” put or warrant
(c) The minimum amount of margin that must be maintained for the underlying component
(d) Shall be 10 percent of the aggregate exercise price plus the amount by which the exercise price of the put exceeds the current market value of the underlying

According to FINRA rule 4210 the qualified security is an equity security, other than a warrant, right or option, that is registered on any national securities exchange. Not option contract that can be exercised at any time prior to its expiration pursuant to the rules of The Options Clearing Corporation, any debt securities issued or guaranteed by the government of a foreign country or a supranational entity and thehe percent discount from principal amount at which the Treasury bill may be purchased or sold, expressed as a discount for a term to maturity of 360 days

According to FINRA ruler 4210, the following are determining net “long” and net “short” positions?
(a) Offsetting “long” and “short” positions in exchangeable or convertible securities (including warrants) or in the same security
(b) Computing margin on such an existing net security position carried against a put or call
(c) The current market price to be used shall not be greater than the exercise price in the case of a call or less than the current market price in the case of a put and the required margin shall be increased by any unrealized loss

According to FINRA rule 4210, 5 percent shall be maintained the market value of such obligations in Five years but less than ten years to maturity.

According to FINRA rule 4210 , Option or stock index warrant shall be margined as if it were a put or call in a member guarantees an option or stock index warrant to receive or deliver securities or foreign currencies for a customer