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Question 1 of 10
1. Question
Which of the following include in appropriate risk-based procedures for conducting ongoing customer due diligence?
I. Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile
II. Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information
III. Understanding the bank and personality of customer relationships for the purpose of developing a customer risk profile
IV. Monitoring the unidentified and report suspicious transactions and, on a risk basis, to maintain and update customer informationCorrect
According to the FINRA rule 3310, the following are including in appropriate risk-based procedures for conducting ongoing customer due diligence:
(a) Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile
(b) Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information
(c) Understanding the bank and personality of customer relationships for the purpose of developing a customer risk profileIncorrect
According to the FINRA rule 3310, the following are including in appropriate risk-based procedures for conducting ongoing customer due diligence:
(a) Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile
(b) Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information
(c) Understanding the bank and personality of customer relationships for the purpose of developing a customer risk profile -
Question 2 of 10
2. Question
Which of the following is true in Box Spreads ?
Correct
According to FINRA rue 2360, Box Spread is a long call position accompanied by a short put position with the same strike price and a short call position accompanied by a long put position with a different strike price. The choices b, c and d is not correct because it is not part of Box Spread.
Incorrect
According to FINRA rue 2360, Box Spread is a long call position accompanied by a short put position with the same strike price and a short call position accompanied by a long put position with a different strike price. The choices b, c and d is not correct because it is not part of Box Spread.
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Question 3 of 10
3. Question
Which of the following reason does the member may submit contrary exercise advices and/or advice cancels?
I. A place designated for that purpose by any national options exchange of which it is a member and where the standardized equity option is listed
II. A place designated for that purpose by any national options exchange that lists and trades the standardized equity option via a member of such exchange if the member is not a member of such exchange;
III. Any national options exchange of which it is a member and where the standardized equity option is listed via The Options Clearing Corporation in a form prescribed by The Options Clearing Corporation; or
IV. Any national options exchange where the standardized equity option is listed via The Options Clearing Corporation in a form prescribed by The Options Clearing Corporation, provided the member is a member of The Options Clearing Corporation.Correct
According to FINRA rule 2360,the following are the reason does the member may submit contrary exercise advices and/or advice cancels:
(a) A place designated for that purpose by any national options exchange of which it is a member and where the standardized equity option is listed
(b) A place designated for that purpose by any national options exchange that lists and trades the standardized equity option via a member of such exchange if the member is not a member of such exchange;
(c) Any national options exchange of which it is a member and where the standardized equity option is listed via The Options Clearing Corporation in a form prescribed by The Options Clearing Corporation; or
(d) Any national options exchange where the standardized equity option is listed via The Options Clearing Corporation in a form prescribed by The Options Clearing Corporation, provided the member is a member of The Options Clearing Corporation.Incorrect
According to FINRA rule 2360,the following are the reason does the member may submit contrary exercise advices and/or advice cancels:
(a) A place designated for that purpose by any national options exchange of which it is a member and where the standardized equity option is listed
(b) A place designated for that purpose by any national options exchange that lists and trades the standardized equity option via a member of such exchange if the member is not a member of such exchange;
(c) Any national options exchange of which it is a member and where the standardized equity option is listed via The Options Clearing Corporation in a form prescribed by The Options Clearing Corporation; or
(d) Any national options exchange where the standardized equity option is listed via The Options Clearing Corporation in a form prescribed by The Options Clearing Corporation, provided the member is a member of The Options Clearing Corporation. -
Question 4 of 10
4. Question
Which of the following instances that options clearing corporation has waived the ex-by-ex procedure for an options class?
I. Submit to any of the places listed in a place designated for that purpose by any national options exchange of which it is a member and where the standardized equity option is listed.
II. Take no action and allow the standardized equity option to expire without being exercised.
III. Committing an options holder
IV. Each delivery of securities subject to such tax must be accompanied by a sales ticket stamped in accordance with the regulations of the State imposing such taxCorrect
According to FINRA rule 2360, the following instances that options clearing corporation has waived the ex-by-ex procedure for an options class:
(a) Submit to any of the places listed in a place designated for that purpose by any national options exchange of which it is a member and where the standardized equity option is listed.
(b) Take no action and allow the standardized equity option to expire without being exercisedIncorrect
According to FINRA rule 2360, the following instances that options clearing corporation has waived the ex-by-ex procedure for an options class:
(a) Submit to any of the places listed in a place designated for that purpose by any national options exchange of which it is a member and where the standardized equity option is listed.
(b) Take no action and allow the standardized equity option to expire without being exercised -
Question 5 of 10
5. Question
Which of the following standardized equity options holders desired to exercise or not exercise?
I. Take no action and allow exercise determinations to be made in accordance with The Options Clearing Corporation’s Ex-by-Ex procedure where applicable
II. Submit a “Contrary Exercise Advice” by the deadline
III. Take action and allow exercise determinations to be made in accordance with The Options Clearing Corporation’s Ex-by-Ex procedure where applicable
IV. Don’t Submit a “Contrary Exercise Advice” by the deadlineCorrect
According to FINRA rule 2360, the following standardized equity options holders desired to exercise or not exercise
(a) Take no action and allow exercise determinations to be made in accordance with The Options Clearing Corporation’s Ex-by-Ex procedure where applicable
(b) Submit a “Contrary Exercise Advice” by the deadlineIncorrect
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Question 6 of 10
6. Question
What is outstanding mean in respect of an option contract?
Correct
Under FINRA rule 2360 The term “outstanding” in respect of an option contract means an option contract which has neither been the subject of a closing sale transaction nor has been exercised nor reached its expiration date. While he term “premium” means the aggregate price of the option contracts agreed upon between the buyer and writer/seller or their agents, the term “series of options” means all option contracts of the same class of options having the same exercise price and expiration date and which cover the same number of units of the underlying security or index and the term “short position” means the number of outstanding option contracts of a given series of options with respect to which a person is obligated as a writer (seller).
Incorrect
Under FINRA rule 2360 The term “outstanding” in respect of an option contract means an option contract which has neither been the subject of a closing sale transaction nor has been exercised nor reached its expiration date. While he term “premium” means the aggregate price of the option contracts agreed upon between the buyer and writer/seller or their agents, the term “series of options” means all option contracts of the same class of options having the same exercise price and expiration date and which cover the same number of units of the underlying security or index and the term “short position” means the number of outstanding option contracts of a given series of options with respect to which a person is obligated as a writer (seller).
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Question 7 of 10
7. Question
What is Rules of The Options Clearing Corporation mean?
Correct
Under FINRA rule 2360, Options Clearing Corporation mean is the by.While -laws and the rules of The Options Clearing Corporation, and all written interpretations thereof as may be in effect from time to time. While the term “type of option” means the classification of an option contract as either a put or a call, the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option and the term “type of option” means the classification of an option contract as either a put or a call.
Incorrect
Under FINRA rule 2360, Options Clearing Corporation mean is the by.While -laws and the rules of The Options Clearing Corporation, and all written interpretations thereof as may be in effect from time to time. While the term “type of option” means the classification of an option contract as either a put or a call, the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option and the term “type of option” means the classification of an option contract as either a put or a call.
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Question 8 of 10
8. Question
Which of the following example illustrate the operation of position limits established by Rule 2360(b)(3) ?
I. Customer A, who is long 25,000 XYZ calls, may at the same time be short 25,000 XYZ calls
II. Customer B, who is long 25,000 XYZ calls, may at the same time be long 25,000 XYZ puts
III. Customer C, who is long 20,000 XYZ calls, may not at the same time be short more than 5,000 XYZ puts, since the 25,000 contract limit applies to the aggregation of long call and short put positions
IV. Customer D, who is long 20,000 XYZ calls, may not at the same time be short more than 5,000 XYZ puts, since the 25,000 contract unlimited applies to the aggregation of long call and short put positionsCorrect
According to FINRA rule 23600 the following example illustrate the operation of position limits established by Rule 2360(b)(3)
(a) Customer A, who is long 25,000 XYZ calls, may at the same time be short 25,000 XYZ calls
(b) Customer B, who is long 25,000 XYZ calls, may at the same time be long 25,000 XYZ puts
(c) Customer C, who is long 20,000 XYZ calls, may not at the same time be short more than 5,000 XYZ puts, since the 25,000 contract limit applies to the aggregation of long call and short put positionsIncorrect
According to FINRA rule 23600 the following example illustrate the operation of position limits established by Rule 2360(b)(3)
(a) Customer A, who is long 25,000 XYZ calls, may at the same time be short 25,000 XYZ calls
(b) Customer B, who is long 25,000 XYZ calls, may at the same time be long 25,000 XYZ puts
(c) Customer C, who is long 20,000 XYZ calls, may not at the same time be short more than 5,000 XYZ puts, since the 25,000 contract limit applies to the aggregation of long call and short put positions -
Question 9 of 10
9. Question
Which of the following percent need for the market value for each non-margin eligible equity security held “long” in the account?
I.10 percent
II. 50 percent
III. 80 percent
IV. 100 percentCorrect
Incorrect
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Question 10 of 10
10. Question
Which of the following minimum requirements are located at the principal place of business of the member or such other principal office that shall be designated by the member?
I. Identification of complainant
II. Date complaint was received
III. Identification of registered representative servicing the account
IV. Dates of verification of currency of account informationCorrect
According to FINRA rule 2360, the following are the minimum requirements located at the principal place of business of the member or such other principal office that shall be designated by the member
a) Identification of complainant
b) Date complaint was received
c) Identification of registered representative servicing the accountIncorrect
According to FINRA rule 2360, the following are the minimum requirements located at the principal place of business of the member or such other principal office that shall be designated by the member
a) Identification of complainant
b) Date complaint was received
c) Identification of registered representative servicing the account