FINRA Series 54 - Pauline - Quiz 15.new
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Question 1 of 10
1. Question
Which of the following must be done by a municipal advisor regarding the content of their advertisements?
I. All advertisements may make exaggerated claims as it is part of promotion strategies.
II. All advertisements must be fair and balanced.
III. All advertisements must be based on the principles of fair dealing and good faith.
IV. All advertisements must provide a sound basis for evaluating the facts in regard to any particular municipal security or type of municipal security, municipal financial product, industry, or service.Correct
In providing advertisements, it should be fair and balanced, be based on the principles of fair dealing and good faith, and provide a sound basis for evaluating the facts in regard to any particular municipal security or type of municipal security, municipal financial product, industry, or service. Municipal advisors shall not omit any material fact or qualification if the omission would cause the advertisements to be misleading. They must also not provide false, exaggerated, and unwanted claims in any of the advertisements.
Incorrect
In providing advertisements, it should be fair and balanced, be based on the principles of fair dealing and good faith, and provide a sound basis for evaluating the facts in regard to any particular municipal security or type of municipal security, municipal financial product, industry, or service. Municipal advisors shall not omit any material fact or qualification if the omission would cause the advertisements to be misleading. They must also not provide false, exaggerated, and unwanted claims in any of the advertisements.
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Question 2 of 10
2. Question
Which of the following are included in the content standards for advertisements by the municipal advisors under the MSRB Rule G-40?
I. Municipal advisors must ensure that statements are clear and not misleading within the context in which they are made.
II. Municipal advisors must provide unbalanced treatment of potential benefits and risks.
III. Municipal advisors must consider the nature of the audience to which the advertisement will be directed.
IV. Municipal advisors must place information in a legend or footnote only in the event that such placement would not inhibit the understanding of the client in the advertisement.Correct
Under the content standards in the MSRB Rule G-40, the abovementioned statements are included except for the second statement as municipal advisors must provide “balanced treatment of risks and potential benefits” arising in the statements. An advertisement must be consistent with the risks inherent to the municipal financial product or the issuance of the municipal security.
Incorrect
Under the content standards in the MSRB Rule G-40, the abovementioned statements are included except for the second statement as municipal advisors must provide “balanced treatment of risks and potential benefits” arising in the statements. An advertisement must be consistent with the risks inherent to the municipal financial product or the issuance of the municipal security.
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Question 3 of 10
3. Question
Which of the following shall be provided by each broker, dealer, and municipal securities dealer?
I. A statement that is registered with the U.S. Securities and Exchange Commission and the Municipal Securities Rulemaking Board.
II. The website address for the Commodity Futures Trading Commission.
III. A statement as to how to file a complaint with an appropriate regulatory authority.
IV. A statement as to the availability to the customer of an investor brochure describing the protection provided by the MSRB.Correct
All of the statements above shall be provided by each broker, dealer, and municipal securities dealer except Statement II as the Commodity Futures Trading Commission’s website address is not necessary for the customer information. Under the MSRB Rule G-10, the Municipal Securities Rulemaking Board’s website address is rather needed. This information must be provided by the broker, dealer, and municipal securities dealer once every calendar year.
Incorrect
All of the statements above shall be provided by each broker, dealer, and municipal securities dealer except Statement II as the Commodity Futures Trading Commission’s website address is not necessary for the customer information. Under the MSRB Rule G-10, the Municipal Securities Rulemaking Board’s website address is rather needed. This information must be provided by the broker, dealer, and municipal securities dealer once every calendar year.
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Question 4 of 10
4. Question
Which of the following statements are treated as the records of original entry under MSRB Rule G-8?
I. Daily record of all purchases and sales of municipal securities
II. Daily record of all deliveries and receipts of municipal securities
III. Daily record of all receipts and disbursement of cash with respect to transactions in municipal securities
IV. Daily record of deliveries and receipts excluding the indication to such effect and its certificate numberCorrect
The records of the original entry include daily records of all purchases and sales of municipal securities, all deliveries and receipts of municipal securities, and all receipts and disbursement of cash with respect to transactions in municipal securities. This includes its certificate number and the indication of such an effect. Also, all other debits and credits pertaining to transactions in municipal securities are treated as records of original entry which needs a name and its designation for the account to be identified.
Incorrect
The records of the original entry include daily records of all purchases and sales of municipal securities, all deliveries and receipts of municipal securities, and all receipts and disbursement of cash with respect to transactions in municipal securities. This includes its certificate number and the indication of such an effect. Also, all other debits and credits pertaining to transactions in municipal securities are treated as records of original entry which needs a name and its designation for the account to be identified.
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Question 5 of 10
5. Question
Which of the following information is needed to be identified in a record of original entry as described in the MSRB Rule G-8?
I. The segregated par value of the municipal securities
II. The description of municipal securities
III. The name or other designation of the account for which each such transaction was effected
IV. The dollar price or yield and aggregate purchase or sale price of the securitiesCorrect
The description of municipal securities, its name or other designation of the account it was effected, and the dollar price or yield and aggregate purchase or sale price of the securities are included in a record of original entry for it to be identified. The aggregated par value of the municipal securities, accrued interest, the trade date, and the name or other designation of the person from whom purchased or received or to whom sold or delivered is also indicated in the record of original entry.
Incorrect
The description of municipal securities, its name or other designation of the account it was effected, and the dollar price or yield and aggregate purchase or sale price of the securities are included in a record of original entry for it to be identified. The aggregated par value of the municipal securities, accrued interest, the trade date, and the name or other designation of the person from whom purchased or received or to whom sold or delivered is also indicated in the record of original entry.
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Question 6 of 10
6. Question
Which of the following statements are correct regarding the records for agency transactions under the MSRB Rule G-8?
I. A memorandum of each agency order must be given or received for the purchase or sale of municipal securities pursuant to such order.
II. If an agency order is canceled by a customer, such records show the terms and conditions of the cancellation.
III. Orders entered pursuant to the exercise of discretionary power by the municipal securities dealer shall be designated as such.
IV. The “repurchase agreements” shall mean an order given to a broker, dealer, or municipal securities dealer to buy specific security from another person.Correct
All of the statements above are correct except the fourth statement wherein it states the description of an “agency order” rather than the repurchase agreements. Agency orders also mean to sell specific security to another person, in either case without broker, dealer, or municipal securities dealer acquiring ownership of the security. Customer inquiries of a general nature concerning the availability or opportunity of sale shall not be considered to be orders.
Incorrect
All of the statements above are correct except the fourth statement wherein it states the description of an “agency order” rather than the repurchase agreements. Agency orders also mean to sell specific security to another person, in either case without broker, dealer, or municipal securities dealer acquiring ownership of the security. Customer inquiries of a general nature concerning the availability or opportunity of sale shall not be considered to be orders.
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Question 7 of 10
7. Question
Which of the following statements describes the records concerning primary offerings for which a syndicate has been formed for the purchase of municipal securities?
I. Records shall be maintained by the syndicate manager showing the description and aggregate par value of the securities.
II. Records shall be maintained by the syndicate manager showing the terms and conditions governing the formation and operation of the syndicate.
III. Records shall be maintained by the sole underwriter showing the description and aggregate par value of the securities.
IV. Records shall be maintained by the sole underwriter showing the terms and conditions governing the formation and operation of the syndicate.Correct
If each primary offering has been formed for the purchase of municipal securities, records shall be maintained by the “syndicate manager” showing the description and aggregate par value of the securities and the terms and conditions governing the formation and operation of the syndicate. The name and percentage of participation of each member of the syndicate and a statement of all terms and conditions required by the issuer are also necessary to be maintained by the syndicate manager.
Incorrect
If each primary offering has been formed for the purchase of municipal securities, records shall be maintained by the “syndicate manager” showing the description and aggregate par value of the securities and the terms and conditions governing the formation and operation of the syndicate. The name and percentage of participation of each member of the syndicate and a statement of all terms and conditions required by the issuer are also necessary to be maintained by the syndicate manager.
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Question 8 of 10
8. Question
Which of the following is correct regarding the pre-dispute arbitration agreements with customers?
I. The panel of arbitrators will include a minority of arbitrators affiliated with the securities industry.
II. The arbitrators need to explain the reasons for their award.
III. To obtain the documents within the ability of the parties is generally more limited in arbitration than in court proceedings.
IV. The arbitration awards are generally final and binding.Correct
All of the following statements mentioned above are correct except for the second statement for arbitrators do not have to explain the reasons for their award as discussed in the MSRB Rule G-8. Any pre-dispute arbitration clause shall be highlighted and shall be immediately preceded by signing an arbitration agreement the parties agree. The rules of the arbitration forum in which the claim is filed shall be incorporated into this agreement.
Incorrect
All of the following statements mentioned above are correct except for the second statement for arbitrators do not have to explain the reasons for their award as discussed in the MSRB Rule G-8. Any pre-dispute arbitration clause shall be highlighted and shall be immediately preceded by signing an arbitration agreement the parties agree. The rules of the arbitration forum in which the claim is filed shall be incorporated into this agreement.
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Question 9 of 10
9. Question
Which of the following are reflected in records concerning political contributions and prohibitions on municipal securities business pursuant to Rule G-37?
I. The states in which the municipal securities dealer is engaging or is seeking to engage in the municipal securities business.
II. The contributions to officials of a municipal entity and payments made to political parties of states and political subdivisions by the municipal securities dealer.
III. The listing of names of all non-municipal finance professionals.
IV. The listing of municipal entities on the previous three calendar years for confirmation and verification.Correct
The abovementioned statements are reflected in records concerning political contributions and prohibitions on municipal securities business pursuant to Rule G-37 except for the fourth statement because the listing of municipal entities must be indicated during the current year and separate listings for each of the previous two calendar years. It is also reflected in the records concerning political contributions and prohibitions on municipal securities business the listing of names of all municipal finance professionals and executive officers.
Incorrect
The abovementioned statements are reflected in records concerning political contributions and prohibitions on municipal securities business pursuant to Rule G-37 except for the fourth statement because the listing of municipal entities must be indicated during the current year and separate listings for each of the previous two calendar years. It is also reflected in the records concerning political contributions and prohibitions on municipal securities business the listing of names of all municipal finance professionals and executive officers.
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Question 10 of 10
10. Question
Which of the following is included in the records concerning political contributions to bond ballot cathe contributions and campaigns made by each municipal finance professional?
I. The official name of each bond ballot campaign receiving such contributions and the jurisdiction for which municipal securities be issued.
II. The names, titles, city or country, and state of residence of the broker, dealer, and third party.
III. The amounts and the specific dates of such contributions.
IV. The full name of the municipal entity and full issue description of any primary offering from the bond ballot campaign.Correct
The abovementioned statements are correct except for the second statement because the names, titles, city or country, and state of residence of the contributor is necessary rather than the broker, dealer, and the third party which is not mentioned in the MSRB Rule G-8. Brokers, dealers, and municipals securities dealers shall maintain copies of the Forms G-37 and G-37x submitted to the Board along with a record of submitting such forms to the Board.
Incorrect
The abovementioned statements are correct except for the second statement because the names, titles, city or country, and state of residence of the contributor is necessary rather than the broker, dealer, and the third party which is not mentioned in the MSRB Rule G-8. Brokers, dealers, and municipals securities dealers shall maintain copies of the Forms G-37 and G-37x submitted to the Board along with a record of submitting such forms to the Board.