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Question 1 of 10
1. Question
. Which of the following requirements must present by the participating broker-dealer?
I. Be a registered broker-dealer subject to the SEC’s net capital requirements
II. Maintain an ownership interest in the carrying/clearing member pursuant to Regulation T of the Federal Reserve Board
III. Maintain a minimum liquidating equity of $1 million in the JBO arrangement exclusive of the ownership interest
IV. The participant must deposit a sufficient amount to eliminate this deficiency within 5 business days or be subject to margin account requirementsCorrect
According to FINRA rule 4210 the following are the requirements must have the participating broker-dealer:
(a) Be a registered broker-dealer subject to the SEC’s net capital requirements
(b) Maintain an ownership interest in the carrying/clearing member pursuant to Regulation T of the Federal Reserve Board
(c) Maintain a minimum liquidating equity of $1 million in the JBO arrangement exclusive of the ownership interest
(d) The participant must deposit a sufficient amount to eliminate this deficiency within 5 business days or be subject to margin account requirementsIncorrect
According to FINRA rule 4210 the following are the requirements must have the participating broker-dealer:
(a) Be a registered broker-dealer subject to the SEC’s net capital requirements
(b) Maintain an ownership interest in the carrying/clearing member pursuant to Regulation T of the Federal Reserve Board
(c) Maintain a minimum liquidating equity of $1 million in the JBO arrangement exclusive of the ownership interest
(d) The participant must deposit a sufficient amount to eliminate this deficiency within 5 business days or be subject to margin account requirements -
Question 2 of 10
2. Question
What percent need to be maintained in the margin of “long” or “short” positions in exempted securities other than obligations of the United States?
Correct
According to FINRA rule 4210 under all exempted securities, On any “long” or “short” positions in exempted securities other than obligations of the United States, the margin to be maintained shall be 7 percent of the current market value.
Incorrect
According to FINRA rule 4210 under all exempted securities, On any “long” or “short” positions in exempted securities other than obligations of the United States, the margin to be maintained shall be 7 percent of the current market value.
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Question 3 of 10
3. Question
What is the minimum requirements for the member in transactions with exempt accounts involving certain “Good Faith” securities?
Correct
According to FINRA rule 4210, the minimum requirement for the member in transactions with exempt accounts involving certain “Good Faith” securities is the member shall maintain a written risk analysis methodology for assessing the amount of credit extended to exempt accounts pursuant
Incorrect
According to FINRA rule 4210, the minimum requirement for the member in transactions with exempt accounts involving certain “Good Faith” securities is the member shall maintain a written risk analysis methodology for assessing the amount of credit extended to exempt accounts pursuant
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Question 4 of 10
4. Question
What is the procedure in forming a joint back office (“JBO”) arrangement?
Correct
According to FINRA rule 4210, the procedure in forming a joint back office (“JBO”) arrangement the Members must provide written notification to FINRA prior to establishing a JBO arrangement.
Incorrect
According to FINRA rule 4210, the procedure in forming a joint back office (“JBO”) arrangement the Members must provide written notification to FINRA prior to establishing a JBO arrangement.
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Question 5 of 10
5. Question
Which of the following describes appropriate differential in used with reference to a GNMA option contract means a positive or negative amount equal to the product?
I. The difference between the remaining unpaid principal balance of a GNMA delivered upon exercise of that contract and the nominal principal amount
II. The difference between the current cash market price of GNMAs bearing the same stated rate of interest as that borne by the GNMA delivered upon exercise and the exercise price
III. The difference between the paid principal balance of a GNMA delivered upon exercise of that contract and the nominal principal amount
IV. The difference between the paid principal balance of a GNMA may not delivered upon exercise of that contract and the nominal principal amountCorrect
According to FINRA rule 4210 the following describes appropriate differential in used with reference to a GNMA option contract means a positive or negative amount equal to the product:
(a) The difference between the remaining unpaid principal balance of a GNMA delivered upon exercise of that contract and the nominal principal amount
(b) The difference between the current cash market price of GNMAs bearing the same stated rate of interest as that borne by the GNMA delivered upon exercise and the exercise priceIncorrect
According to FINRA rule 4210 the following describes appropriate differential in used with reference to a GNMA option contract means a positive or negative amount equal to the product:
(a) The difference between the remaining unpaid principal balance of a GNMA delivered upon exercise of that contract and the nominal principal amount
(b) The difference between the current cash market price of GNMAs bearing the same stated rate of interest as that borne by the GNMA delivered upon exercise and the exercise price -
Question 6 of 10
6. Question
How many percent does need in margin requirements for 20 percent and under 25 percent in Percent of Outstanding Shares?
Correct
According to FINRA rule 4210, 20 percent and under 25 percent in Percent of Outstanding Shares need s 60 percent of Margin Requirement. While 75 percent is 25 percent and under 30 percent, 100 percent is 30 percent and above and 45 percent is for 15 percent and under 20 percent in Percent of Outstanding Shares.
Incorrect
According to FINRA rule 4210, 20 percent and under 25 percent in Percent of Outstanding Shares need s 60 percent of Margin Requirement. While 75 percent is 25 percent and under 30 percent, 100 percent is 30 percent and above and 45 percent is for 15 percent and under 20 percent in Percent of Outstanding Shares.
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Question 7 of 10
7. Question
Which of the following represent interest rate measure?
I. The case of short term U.S. Treasury bills
II. The annualized discount yield of a specific issue multiplied by ten
III. The case of long term U.S. Treasury notes and bonds
IV. The average of the yield to maturity of the specific multiplied by tenCorrect
According to FINRA rule 4210 the following represent interest rate measure:
(a) The case of short term U.S. Treasury bills
(b) The annualized discount yield of a specific issue multiplied by ten
(c) The case of long term U.S. Treasury notes and bonds
(d) The average of the yield to maturity of the specific multiplied by tenIncorrect
According to FINRA rule 4210 the following represent interest rate measure:
(a) The case of short term U.S. Treasury bills
(b) The annualized discount yield of a specific issue multiplied by ten
(c) The case of long term U.S. Treasury notes and bonds
(d) The average of the yield to maturity of the specific multiplied by ten -
Question 8 of 10
8. Question
What is the current cash market price as used with reference to GNMAs mean?
Correct
According to FINRA rule, 4210 current cash market price as used with reference to GNMAs is the prevailing price in the cash market for GNMAs bearing a particular stated rate of interest to be delivered on the next applicable monthly settlement date determined in the manner specified in the rules of The Options Clearing Corporation. While the term “annualized discount” as used with reference to a Treasury bill means the percent discount from the principal amount at which the Treasury bill may be purchased or sold, expressed as a discount for a term to maturity of 360 days, the term “appropriate differential” is the difference between the current cash market price of GNMAs bearing the same stated rate of interest as that borne by the GNMA delivered upon exercise and the exercise price and the term “American-style option” means an option contract that can be exercised at any time prior to its expiration pursuant to the rules of The Options Clearing Corporation.
Incorrect
According to FINRA rule, 4210 current cash market price as used with reference to GNMAs is the prevailing price in the cash market for GNMAs bearing a particular stated rate of interest to be delivered on the next applicable monthly settlement date determined in the manner specified in the rules of The Options Clearing Corporation. While the term “annualized discount” as used with reference to a Treasury bill means the percent discount from the principal amount at which the Treasury bill may be purchased or sold, expressed as a discount for a term to maturity of 360 days, the term “appropriate differential” is the difference between the current cash market price of GNMAs bearing the same stated rate of interest as that borne by the GNMA delivered upon exercise and the exercise price and the term “American-style option” means an option contract that can be exercised at any time prior to its expiration pursuant to the rules of The Options Clearing Corporation.
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Question 9 of 10
9. Question
Which of the following describes out-of-the-money amounts in type option Interest Rate contracts?
I. 10 percent of Initial and/or Maintenance Margin Required
II. 5 percent of Minimum Margin Required
III. The product of the current interest rate measure and the applicable multiplier for Underlying Component Value
IV. 20 percent of Initial and/or Maintenance Margin RequiredCorrect
According to FINRA rule 4210, the following describes out-of-the-money amounts in type option Interest Rate contracts:
(a) 10 percent of Initial and/or Maintenance Margin Required
(b). 5 percen t of Minimum Margin Required
(c) The product of the current interest rate measure and the applicable multiplier for Underlying Component ValueIncorrect
According to FINRA rule 4210, the following describes out-of-the-money amounts in type option Interest Rate contracts:
(a) 10 percent of Initial and/or Maintenance Margin Required
(b). 5 percen t of Minimum Margin Required
(c) The product of the current interest rate measure and the applicable multiplier for Underlying Component Value -
Question 10 of 10
10. Question
What exercise settlement amount mean?
Correct
According FINRA rule 4210, exercise settlement amount mean is the difference between the “aggregate exercise price” and the “aggregate current index value” (as such terms are defined in the pertinent By-Laws of The Options Clearing Corporation). While exercise price mean in respect of an option or warrant contract is the stated price per unit at which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) upon the exercise of such option contract, European-style option mean is an option contract that can be exercised only at its expiration pursuant to the rules of The Options Clearing Corporation the term “expiration date” in respect of an option contract means the date and time fixed by the rules of the Options Clearing Corporation for the expiration of all option contracts covering the same underlying security or underlying index stock group and having the same expiration month as such option contract.
Incorrect
According FINRA rule 4210, exercise settlement amount mean is the difference between the “aggregate exercise price” and the “aggregate current index value” (as such terms are defined in the pertinent By-Laws of The Options Clearing Corporation). While exercise price mean in respect of an option or warrant contract is the stated price per unit at which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) upon the exercise of such option contract, European-style option mean is an option contract that can be exercised only at its expiration pursuant to the rules of The Options Clearing Corporation the term “expiration date” in respect of an option contract means the date and time fixed by the rules of the Options Clearing Corporation for the expiration of all option contracts covering the same underlying security or underlying index stock group and having the same expiration month as such option contract.