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Question 1 of 10
1. Question
What is the meaning of Aggregate Exercise Price?
Correct
Aggregate Exercise Price
Under FINRA 2360 Option Aggregate Exercise Price means the exercise price of an option contract multiplied by the number of units of the underlying security covered by such option contract. While Class of Options is all option contracts of the same type of option covering the same underlying security or index, Closing Sale Transaction means an option transaction in which the seller’s intention is to reduce or eliminate a long position in the series of options involved in such transaction and The term long position means the number of outstanding option contracts of a given series of options held by a person (purchaser).Incorrect
Aggregate Exercise Price
Under FINRA 2360 Option Aggregate Exercise Price means the exercise price of an option contract multiplied by the number of units of the underlying security covered by such option contract. While Class of Options is all option contracts of the same type of option covering the same underlying security or index, Closing Sale Transaction means an option transaction in which the seller’s intention is to reduce or eliminate a long position in the series of options involved in such transaction and The term long position means the number of outstanding option contracts of a given series of options held by a person (purchaser). -
Question 2 of 10
2. Question
To permit a review of each customer’s options to account on a timely basis, Which of the following shall maintain the principal supervisory office that having jurisdiction over the office servicing customer accounts?
I. The compatibility of options transactions with investment objectives and with the types of transactions for which the account was approved
II. The size and frequency of options transactions
III.Profit or loss in the account
IV. Due concentration in any options class or classesCorrect
Under FINRA rule 2360 The following is the information to permit review of each customer’s options to account on a timely basis to determine Each member shall maintain at the principal supervisory office having jurisdiction over the office servicing customer accounts or have readily accessible and promptly retrievable:
(a). The compatibility of options transactions with investment objectives and with the types of transactions for which the account was approved
(b). The size and frequency of options transactions
(c). Profit or loss in the accountIncorrect
Under FINRA rule 2360 The following is the information to permit review of each customer’s options to account on a timely basis to determine Each member shall maintain at the principal supervisory office having jurisdiction over the office servicing customer accounts or have readily accessible and promptly retrievable:
(a). The compatibility of options transactions with investment objectives and with the types of transactions for which the account was approved
(b). The size and frequency of options transactions
(c). Profit or loss in the account -
Question 3 of 10
3. Question
What is a Short Position?
Correct
Short Position
Under FINRA rule 2360 the Short Position means is the number of option contracts outstanding for a given set of options in respect of which an individual is bound as a writer (seller). While The term “closing sale transaction” means an option transaction in which the seller’s intention is to reduce or eliminate a long position in the series of options involved in such transaction, The term “aggregate exercise price” means the exercise price of an option contract multiplied by the number of units of the underlying security covered by such option contract and The term “rules of The Options Clearing Corporation” means the by-laws and the rules of The Options Clearing Corporation, and all written interpretations thereof as may be in effect from time to time.Incorrect
Short Position
Under FINRA rule 2360 the Short Position means is the number of option contracts outstanding for a given set of options in respect of which an individual is bound as a writer (seller). While The term “closing sale transaction” means an option transaction in which the seller’s intention is to reduce or eliminate a long position in the series of options involved in such transaction, The term “aggregate exercise price” means the exercise price of an option contract multiplied by the number of units of the underlying security covered by such option contract and The term “rules of The Options Clearing Corporation” means the by-laws and the rules of The Options Clearing Corporation, and all written interpretations thereof as may be in effect from time to time. -
Question 4 of 10
4. Question
Under FINRA rule 4210 Margin Requirements, the following are Additional Margin Procedures that shall be established by members:
I. Must 25 percent of the current market value of all margin securities
II. Review limits and types of credit extended to all customers
III. Formulate their own margin requirements
IV. Review the need for instituting higher margin requirements, mark-to-markets, and collateral deposits than are required by this Rule for individual securities or customer accountsCorrect
Under FINRA rule 4210 Margin the following are the requirements in Additional Margin Procedures that shall be established by members:
(a). Must 25 percent of the current market value of all margin securities
(b). Formulate their own margin requirements
(c). Review the need for instituting higher margin requirements, mark-to-markets, and collateral deposits than are required by this Rule for individual securities or customer accountsIncorrect
Under FINRA rule 4210 Margin the following are the requirements in Additional Margin Procedures that shall be established by members:
(a). Must 25 percent of the current market value of all margin securities
(b). Formulate their own margin requirements
(c). Review the need for instituting higher margin requirements, mark-to-markets, and collateral deposits than are required by this Rule for individual securities or customer accounts -
Question 5 of 10
5. Question
Under FINRA rule 2220 Options Communications, which of the following is true:
I. All retail communications (except completed worksheets) issued by a member concerning options shall not be approved in advance by a Registered Options Principal designated by the member’s written supervisory procedures.
II. Correspondence. Correspondence need not be approved by a Registered Options Principal prior to use.
III. Institutional Communications. Each member shall establish written procedures that are appropriate to its business, size, structure, and customers for the review by a Registered Options Principal
IV. Copies of the options communications shall be retained by the member in accordance with SEA Rule 17a-4.Correct
Under FINRA rule 2220 Options Communications, the following are true:
(a). All retail communications (except completed worksheets) issued by a member concerning options shall be approved in advance by a Registered Options Principal designated by the member’s written supervisory procedures.
(b). Institutional Communications. Each member shall establish written procedures that are appropriate to its business, size, structure, and customers for the review by a Registered Options Principal
(c). Copies of the options communications shall be retained by the member in accordance with SEA Rule 17a-4.Incorrect
Under FINRA rule 2220 Options Communications, the following are true:
(a). All retail communications (except completed worksheets) issued by a member concerning options shall be approved in advance by a Registered Options Principal designated by the member’s written supervisory procedures.
(b). Institutional Communications. Each member shall establish written procedures that are appropriate to its business, size, structure, and customers for the review by a Registered Options Principal
(c). Copies of the options communications shall be retained by the member in accordance with SEA Rule 17a-4. -
Question 6 of 10
6. Question
Under FINRA rule 3310 Anti-Money Laundering Compliance Program, which of the following are the Supplementary Material in Independent Testing Requirements?
I. All members should undertake more frequent testing than required if circumstances warrant.
II. Independent testing, pursuant to Rule 3310(c), must be conducted by a designated person with a working knowledge of applicable requirements under the Bank Secrecy Act and its implementing regulations
III. Independent testing may not be conducted with a person who performs the functions being tested
IV. Independent testing may not be conducted with the designated anti-money laundering compliance personCorrect
Under FINRA rule 3310, the following are independent Testing Requirements
(a). All members should undertake more frequent testing than required if circumstances warrant.
(b). Independent testing, pursuant to Rule 3310(c), must be conducted by a designated person with a working knowledge of applicable requirements under the Bank Secrecy Act and its implementing regulations
(c). Independent testing may not be conducted with a person who performs the functions being tested
(d). Independent testing may not be conducted with the designated anti-money laundering compliance personIncorrect
Under FINRA rule 3310, the following are independent Testing Requirements
(a). All members should undertake more frequent testing than required if circumstances warrant.
(b). Independent testing, pursuant to Rule 3310(c), must be conducted by a designated person with a working knowledge of applicable requirements under the Bank Secrecy Act and its implementing regulations
(c). Independent testing may not be conducted with a person who performs the functions being tested
(d). Independent testing may not be conducted with the designated anti-money laundering compliance person -
Question 7 of 10
7. Question
Under FINRA rule 2360 Options, the following are the requirement shall be applicable to the extent appropriate:
I. To the conduct of accounts, the execution of transactions, and the handling of orders in exchange-listed options by members that are not members of exchange on which the option executed is listed
II. To the availability of other options position limit exemptions
III. To other matters related to options trading
IV. To the conduct of accounts, the execution of transactions, and the handling of orders in conventional options by all membersCorrect
Under FINRA rule 2360 Options, which the following are the requirement shall be applicable to the extent appropriate:
(a). To the conduct of accounts, the execution of transactions, and the handling of orders in exchange-listed options by members that are not members of exchange on which the option executed is listed
(b). To other matters related to options trading
(c). To the conduct of accounts, the execution of transactions, and the handling of orders in conventional options by all membersIncorrect
Under FINRA rule 2360 Options, which the following are the requirement shall be applicable to the extent appropriate:
(a). To the conduct of accounts, the execution of transactions, and the handling of orders in exchange-listed options by members that are not members of exchange on which the option executed is listed
(b). To other matters related to options trading
(c). To the conduct of accounts, the execution of transactions, and the handling of orders in conventional options by all members -
Question 8 of 10
8. Question
What is Disclosure Document(s) mean?
Correct
Disclosure Document(s)
Under FINRA rule 2360 Disclosure Document(s) means signifies documents submitted to the SEC, created by one or more market options, and fulfilling the SEA Rule 9b -1 requirements. While the terms “standardized index option” means any options contract issued, or subject to issuance, by the Options Clearing Corporation that is based upon an index and is not an OCC Cleared OTC Option, The term “type of option” means the classification of an option contract as either a put or a call and the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option.Incorrect
Disclosure Document(s)
Under FINRA rule 2360 Disclosure Document(s) means signifies documents submitted to the SEC, created by one or more market options, and fulfilling the SEA Rule 9b -1 requirements. While the terms “standardized index option” means any options contract issued, or subject to issuance, by the Options Clearing Corporation that is based upon an index and is not an OCC Cleared OTC Option, The term “type of option” means the classification of an option contract as either a put or a call and the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option. -
Question 9 of 10
9. Question
Which of the following is to achieve and monitor the member’s compliance with the requirements of the Bank Secrecy Act each member shall develop and Anti-money laundering program?
Correct
Anti-money laundering program
To achieve and monitor the member’s compliance with the requirements of the Bank Secrecy Act each member shall develop and implement a written anti-money laundering program. The policies report bank statement report and Police report are not the requirements of the Bank Secrecy Act.Incorrect
Anti-money laundering program
To achieve and monitor the member’s compliance with the requirements of the Bank Secrecy Act each member shall develop and implement a written anti-money laundering program. The policies report bank statement report and Police report are not the requirements of the Bank Secrecy Act. -
Question 10 of 10
10. Question
Which of the following is the purpose of An option to purchase or sell common stock shall be deemed to cover 100 shares of such stock at the time the contract granting such an option is written?
I. It shall be deemed to constitute as many option contracts as that other number of shares divided by 100
II. It shall grant the right to purchase or sell 100 shares of common stock
III. It shall continue to be considered as one contract throughout its life
IV. It shall not continue to be considered as one contract throughout its lifeCorrect
Under FINRA rule 2360 to purchase or sell common stock shall be deemed to cover 100 shares of such stock at the time the contract granting such an option is written. If a stock option is granted covering some other number of shares, then for purposes are the following:
(a). It shall be deemed to constitute as many option contracts as that other number of shares divided by 100
(b). It shall grant the right to purchase or sell 100 shares of common stock
(c). It shall not continue to be considered as one contract throughout its lifeIncorrect
Under FINRA rule 2360 to purchase or sell common stock shall be deemed to cover 100 shares of such stock at the time the contract granting such an option is written. If a stock option is granted covering some other number of shares, then for purposes are the following:
(a). It shall be deemed to constitute as many option contracts as that other number of shares divided by 100
(b). It shall grant the right to purchase or sell 100 shares of common stock
(c). It shall not continue to be considered as one contract throughout its life