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Question 1 of 10
1. Question
Under FINRA rule 2360, which of the following are requirements in Exercise Limits:
I. No member or person associated with a member shall exercise, for any account in which such member
II. Member or person associated with a member shall exercise, for any account in which such member
III. Member shall exercise within any five (5) consecutive business days a number of option contracts
IV. Member shall exercise within any fifteen (15) consecutive business days a number of option contractsCorrect
Under FINRA rule 2360, the following are requirements in Exercise Limits:
(a). No member or person associated with a member shall exercise, for any account in which such member
(b). Member shall exercise within any five (5) consecutive business days a number of option contractsIncorrect
Under FINRA rule 2360, the following are requirements in Exercise Limits:
(a). No member or person associated with a member shall exercise, for any account in which such member
(b). Member shall exercise within any five (5) consecutive business days a number of option contracts -
Question 2 of 10
2. Question
What is Standardized Equity Option mean?
Correct
Standardized Equity Option
Under FINRA 2360 Standardized Equity Option means any equity options contract issued, or subject to issuance by, The Options Clearing Corporation that is not a FLEX Equity Option and not an OCC Cleared OTC Option. While The term “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, he terms “premium” means the aggregate price of the options contracts agreed upon between the buyer and writer/seller or their agents and The term “option transaction” means a transaction effected by a member for the purchase or sale of an option contract, or for the closing out of a long or short position in such option.Incorrect
Standardized Equity Option
Under FINRA 2360 Standardized Equity Option means any equity options contract issued, or subject to issuance by, The Options Clearing Corporation that is not a FLEX Equity Option and not an OCC Cleared OTC Option. While The term “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, he terms “premium” means the aggregate price of the options contracts agreed upon between the buyer and writer/seller or their agents and The term “option transaction” means a transaction effected by a member for the purchase or sale of an option contract, or for the closing out of a long or short position in such option. -
Question 3 of 10
3. Question
What is the Type of Option?
Correct
Type of Option
Under FINRA rule 2360 the Type of Option means either a put or a call, classifying an option contract. While the term “The Options Clearing Corporation” means The Options Clearing Corporation, the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option and 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.Incorrect
Type of Option
Under FINRA rule 2360 the Type of Option means either a put or a call, classifying an option contract. While the term “The Options Clearing Corporation” means The Options Clearing Corporation, the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option and 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. -
Question 4 of 10
4. Question
Which of the following is true?
Correct
Suitability
Under FINRA rule 2111 the true meaning of suitability is accurate to the member or affiliate party’s fairgrounds to assume, in general, and with respect to specific transactions and investment strategies involving the securities or securities, that the institutional customer is capable of assessing investment risks independently.Incorrect
Suitability
Under FINRA rule 2111 the true meaning of suitability is accurate to the member or affiliate party’s fairgrounds to assume, in general, and with respect to specific transactions and investment strategies involving the securities or securities, that the institutional customer is capable of assessing investment risks independently. -
Question 5 of 10
5. Question
Which of the following are the term “designated account”?
I. A savings association
II. A state or political subdivision
III. An investment company registered with the SEC under the Investment Company Act
IV. A state or political subdivisionCorrect
Under FINRA rule 4210 the following are the term “designated account”
(a). A savings association
(b). A state or political subdivision
(d). A state or political subdivisionIncorrect
Under FINRA rule 4210 the following are the term “designated account”
(a). A savings association
(b). A state or political subdivision
(d). A state or political subdivision -
Question 6 of 10
6. Question
Which of the following are not on the list of requirements in the event that a carrying and clearing, or a carrying member’s tentative net capital?
Correct
Under FINRA rule 4210 the requirements for the event that a carrying and clearing, or a carrying member’s tentative net capital (as such term is defined in SEA Rule 15c3-1) are Promptly notify FINRA in calling of such deficiency, Take appropriate action to resolve such deficiency within three consecutive business days, or not permit any new transactions to be entered into pursuant to the JBO arrangement and No member shall effect for any account in which such member has an interest. Not regarding A member may carry the proprietary account of another broker-dealer, which is registered with the SEC.
Incorrect
Under FINRA rule 4210 the requirements for the event that a carrying and clearing, or a carrying member’s tentative net capital (as such term is defined in SEA Rule 15c3-1) are Promptly notify FINRA in calling of such deficiency, Take appropriate action to resolve such deficiency within three consecutive business days, or not permit any new transactions to be entered into pursuant to the JBO arrangement and No member shall effect for any account in which such member has an interest. Not regarding A member may carry the proprietary account of another broker-dealer, which is registered with the SEC.
-
Question 7 of 10
7. Question
What is Net Delta?
Correct
Net Delta
Under FINRA rule 2360 the Net Delta is the number of shares that must be held (either long or short) to mitigate the possibility that the value of the equity options position will change with gradual adjustments in the security price underpinning the option position. While 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, 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 and the term type of option is the classification of an option contract as either a put or a call.Incorrect
Net Delta
Under FINRA rule 2360 the Net Delta is the number of shares that must be held (either long or short) to mitigate the possibility that the value of the equity options position will change with gradual adjustments in the security price underpinning the option position. While 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, 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 and the term type of option is the classification of an option contract as either a put or a call. -
Question 8 of 10
8. Question
Which of the below forms is approved by the national options exchanges, FINRA, or The Options Clearing Corporation for use by a member to submit a final exercise decision committing the holder of an option?
Correct
A Contrary Exercise Advice
Under FINRA rule 2360 A Contrary Exercise Advice is a form approved by the national options exchanges, FINRA or The Options Clearing Corporation for use by a member to submit a final exercise decision committing the holder of an option. While Options Clearing Corporation is an organization that acts as both the issuer and guarantor for options and futures contracts, Underlying Index the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option and the term “standardized equity option” means any equity options contract issued, or subject to issuance by, The Options Clearing Corporation that is not a FLEX Equity Option and not an OCC Cleared OTC Option.Incorrect
A Contrary Exercise Advice
Under FINRA rule 2360 A Contrary Exercise Advice is a form approved by the national options exchanges, FINRA or The Options Clearing Corporation for use by a member to submit a final exercise decision committing the holder of an option. While Options Clearing Corporation is an organization that acts as both the issuer and guarantor for options and futures contracts, Underlying Index the term “underlying index” means an index underlying a Standardized Index Option or a Conventional Index Option and the term “standardized equity option” means any equity options contract issued, or subject to issuance by, The Options Clearing Corporation that is not a FLEX Equity Option and not an OCC Cleared OTC Option. -
Question 9 of 10
9. Question
What is Premium ?
Correct
Premium
Under FINRA rule 2360 the meaning of Premium is the overall rate negotiated between the buyer and the publisher/seller or their agents for option contracts.While the term “class of options” means all option contracts of the same type of option covering the same underlying security or index, the term “option transaction” means a transaction effected by a member for the purchase or sale of an option contract, or for the closing out of a long or short position in such option and the term “long position” means the number of outstanding option contracts of a given series of options held by a person (purchaser).Incorrect
Premium
Under FINRA rule 2360 the meaning of Premium is the overall rate negotiated between the buyer and the publisher/seller or their agents for option contracts.While the term “class of options” means all option contracts of the same type of option covering the same underlying security or index, the term “option transaction” means a transaction effected by a member for the purchase or sale of an option contract, or for the closing out of a long or short position in such option and the term “long position” means the number of outstanding option contracts of a given series of options held by a person (purchaser). -
Question 10 of 10
10. Question
Upon verifying the customer history and financial records, how many days will it take to return customer verification?
Correct
According to FINRA rule 2360 (c) Verification of Customer Background and Financial Information, It takes fifteen (15) days Upon verifying the customer history and financial records. Not 60 working days, 30 days, and 15 working days.
Incorrect
According to FINRA rule 2360 (c) Verification of Customer Background and Financial Information, It takes fifteen (15) days Upon verifying the customer history and financial records. Not 60 working days, 30 days, and 15 working days.