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Question 1 of 10
1. Question
Which of the following are types of stock options?
I. Standardized Equity Options
II. Equity Option Hedge Exemptions
III. Conventional Equity Options
IV. Balance OptionCorrect
Under FINRA rule 2360, the following are the types of stock option:
(a) Standardized Equity Options
(b) Equity Option Hedge Exemptions
(c) Conventional Equity OptionsIncorrect
Under FINRA rule 2360, the following are the types of stock option:
(a) Standardized Equity Options
(b) Equity Option Hedge Exemptions
(c) Conventional Equity Options -
Question 2 of 10
2. Question
Which of the following instances are acceptable in highly unusual circumstances of standardized equity options?
I. No member shall affect for any account in which such member has an interest
II. If the member has reason to believe that as a result of such transaction the member or partner would acting alone
III. The position limit for one or more classes or series of options provided that reasonable notice shall be given of each new position limit fixed by FINRA
IV. Member for the purchase or sale of an option contractCorrect
Under the FINRA rule 2360, the following instances are acceptable in highly unusual circumstances of standardized equity options
(a) No member shall affect for any account in which such member has an interest
(b) If the member has reason to believe that as a result of such transaction the member or partner would acting alone
(c) The position limit for one or more classes or series of options provided that reasonable notice shall be given of each new position limit fixed by FINRAIncorrect
Under the FINRA rule 2360, the following instances are acceptable in highly unusual circumstances of standardized equity options
(a) No member shall affect for any account in which such member has an interest
(b) If the member has reason to believe that as a result of such transaction the member or partner would acting alone
(c) The position limit for one or more classes or series of options provided that reasonable notice shall be given of each new position limit fixed by FINRA -
Question 3 of 10
3. Question
Which of the following can represent adjusted contract that underlying security or securities convertible into the underlying security, or, in the case of an adjusted option, the same number of shares?
I. Long call and short stock
II. Short call and long stock
III. Long put and long stock
IV. Short put and short stockCorrect
Incorrect
According to FINRA rule 2360, the following can represent adjusted contract that underlying security or securities convertible into the underlying security, or, in the case of an adjusted option, the same number of shares:
(a) Long call and short stock
(b) Short call and long stock
(c) Long put and long stock
(d) Short put and short stock -
Question 4 of 10
4. Question
What is basket mean in terms of Margin Requirements?
Correct
According to rule 4210, In terms of Margin Requirements the term basket is up of stocks that FINRA or any national securities exchange designates as eligible for execution in a single trade through its trading facilities and that consists of stocks.
Incorrect
According to rule 4210, In terms of Margin Requirements the term basket is up of stocks that FINRA or any national securities exchange designates as eligible for execution in a single trade through its trading facilities and that consists of stocks.
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Question 5 of 10
5. Question
Which of the following is true in withdrawing cash?
Correct
According to FINRA rule 4210, In withdrawing cash or securities may be made from any account which has a debit balance.
Incorrect
According to FINRA rule 4210, In withdrawing cash or securities may be made from any account which has a debit balance.
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Question 6 of 10
6. Question
Which of the following are true under FINRA rule 2111 in Components of Suitability Obligations?
I) The reasonable-basis obligation requires a member or associated person to have a reasonable basis to believe.
II) A member’s or associated person’s reasonable diligence must provide the member or associated person with an understanding of the potential risks.
III) Any company, government or political subdivision or agency or instrumentality of a government controlled by or controlling the Applicant
IV) Any person who will be or is anticipated to be a personCorrect
Under FINRA rule 2111 in Components of Suitability Obligations
(a) The reasonable-basis obligation requires a member or associated person to have a reasonable basis to believe.
(b) A member’s or associated person’s reasonable diligence must provide the member or associated person with an understanding of the potential risks.Incorrect
Under FINRA rule 2111 in Components of Suitability Obligations
(a) The reasonable-basis obligation requires a member or associated person to have a reasonable basis to believe.
(b) A member’s or associated person’s reasonable diligence must provide the member or associated person with an understanding of the potential risks. -
Question 7 of 10
7. Question
Which of the following rule under authorization and approval?
I. No member and no person associated with a member shall exercise any discretionary power with respect to trading in option contracts in a customer’s account
II. Each firm shall designate specific Registered Options Principals as described below to review discretionary accounts
III. Any member that does not utilize computerized surveillance tools for the frequent and appropriate review of discretionary activity must establish
IV. No member or person associated with a member shall recommend to any customer any transaction for the purchaseCorrect
According to FINRA rule 2360, the following are rule under authorization and approval
(a) No member and no person associated with a member shall exercise any discretionary power with respect to trading in option contracts in a customer’s account
(b) Each firm shall designate specific Registered Options Principals as described below to review discretionary accounts
(c) Any member that does not utilize computerized surveillance tools for the frequent and appropriate review of discretionary activity must establishIncorrect
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Question 8 of 10
8. Question
What type of portfolio is +6% / -8% of Up / Down Market Move (High & Low Valuation Points) ?
Correct
According to FINRA rule 4210 the type of portfolio that has +6% / -8% of Up / Down Market Move (High & Low Valuation Points) is High Capitalization, Broad-based Market Index2.
Incorrect
According to FINRA rule 4210 the type of portfolio that has +6% / -8% of Up / Down Market Move (High & Low Valuation Points) is High Capitalization, Broad-based Market Index2.
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Question 9 of 10
9. Question
Which of the following are allow in general securities sales supervisor?
I. The account shall review the acceptance of each discretionary account to determine that the Registered Options Principal or Limited Principal
II. The account had a reasonable basis for believing that the customer was able to understand and bear the risk of the strategies or transactions proposed
III. The account had unreasonable basis for believing that the customer was able to understand and bear the risk of the strategies or transactions proposed
IV. The account shall not review the acceptance of each discretionary account to determine that the Registered Options Principal or Limited PrincipalCorrect
According to the FINRA rule 2360, the following are allowed in general securities sales supervisor:
(a) The account shall review the acceptance of each discretionary account to determine that the Registered Options Principal or Limited Principal
(b) The account had a reasonable basis for believing that the customer was able to understand and bear the risk of the strategies or transactions proposedIncorrect
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Question 10 of 10
10. Question
What is Maintenance Margin Requirement for “Long” security future (or basket of security futures representing each component of a narrow-based securities index) and “long” put option on the same underlying security (or index)?
Correct
According to FINRA rule 4210, the Maintenance Margin Requirement for “Long” security future (or basket of security futures representing each component of a narrow-based securities index) and “long” put option on the same underlying security (or index) is 10 percent of the aggregate exercise price of the put plus the aggregate put out-of-the-money amount.
Incorrect
According to FINRA rule 4210, the Maintenance Margin Requirement for “Long” security future (or basket of security futures representing each component of a narrow-based securities index) and “long” put option on the same underlying security (or index) is 10 percent of the aggregate exercise price of the put plus the aggregate put out-of-the-money amount.