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Question 1 of 10
1. Question
Which of the following statements is/are true regarding government entity?
I. Any agency, authority or instrumentality of the state or political subdivision
II. Officers, agents or employees of the state or political subdivision or any agency, authority or instrumentality thereof, acting in their official capacity.
III. Any agency that is not associated politically
IV. A pool of assets sponsored or established by the state or political subdivision or any agencyCorrect
Rule no 2030. Engaging in Distribution and Solicitation Activities with Government Entities
Government entity” means any state or political subdivision of a state, including:
(A) Any agency, authority or instrumentality of the state or political subdivision;
(B) A pool of assets sponsored or established by the state or political subdivision or any agency, authority or instrumentality thereof, including but not limited to a defined benefit plan as defined in Section 414(j) of the Internal Revenue Code, or a state general fund;
(C) A plan or program of a government entity; and
(D) Officers, agents or employees of the state or political subdivision or any agency, authority or instrumentality thereof, acting in their official capacity.Incorrect
Rule no 2030. Engaging in Distribution and Solicitation Activities with Government Entities
Government entity” means any state or political subdivision of a state, including:
(A) Any agency, authority or instrumentality of the state or political subdivision;
(B) A pool of assets sponsored or established by the state or political subdivision or any agency, authority or instrumentality thereof, including but not limited to a defined benefit plan as defined in Section 414(j) of the Internal Revenue Code, or a state general fund;
(C) A plan or program of a government entity; and
(D) Officers, agents or employees of the state or political subdivision or any agency, authority or instrumentality thereof, acting in their official capacity. -
Question 2 of 10
2. Question
Which of the following statements is/are true regarding Executive Officer of a Covered Member?
I. Any other officer of the covered member who performs a policy-making function
II. Any vice president in charge of a principal business unit, division or function (such as sales, administration or finance)
III. Any other person who performs similar policy-making functions for the covered member
IV. The presidentCorrect
Rule no 2030. Engaging in Distribution and Solicitation Activities with Government Entities
Covered member” means any member except when that member is engaging in activities that would cause the member to be a municipal advisor as defined in Exchange Act Section 15B(e)(4), SEA Rule 15Ba1-1(d)(1) through (4) and other rules and regulations thereunder. Executive officer of a covered member” means:The president; any vice president in charge of a principal business unit, division or function (such as sales, administration or finance); any other officer of the covered member who performs a policy-making function; or any other person who performs similar policy-making functions for the covered member.Incorrect
Rule no 2030. Engaging in Distribution and Solicitation Activities with Government Entities
Covered member” means any member except when that member is engaging in activities that would cause the member to be a municipal advisor as defined in Exchange Act Section 15B(e)(4), SEA Rule 15Ba1-1(d)(1) through (4) and other rules and regulations thereunder. Executive officer of a covered member” means:The president; any vice president in charge of a principal business unit, division or function (such as sales, administration or finance); any other officer of the covered member who performs a policy-making function; or any other person who performs similar policy-making functions for the covered member. -
Question 3 of 10
3. Question
Which of the following statement is true about NAMC?
Correct
Rule no 14102. National Arbitration and Mediation Committee
Pursuant to Section II of the Plan of Allocation and Delegation of Functions by FINRA to FINRA Regulation, Inc. (“Delegation Plan”), the Board shall appoint a National Arbitration and Mediation Committee (“NAMC”).
(1) The NAMC shall consist of no fewer than ten and no more than 25 members. At least 50 percent of the NAMC shall be Non-Industry members.
(2) The Chairperson of the Board shall name the Chairperson of the NAMCIncorrect
Rule no 14102. National Arbitration and Mediation Committee
Pursuant to Section II of the Plan of Allocation and Delegation of Functions by FINRA to FINRA Regulation, Inc. (“Delegation Plan”), the Board shall appoint a National Arbitration and Mediation Committee (“NAMC”).
(1) The NAMC shall consist of no fewer than ten and no more than 25 members. At least 50 percent of the NAMC shall be Non-Industry members.
(2) The Chairperson of the Board shall name the Chairperson of the NAMC -
Question 4 of 10
4. Question
Which of the following statement is/are true regarding sales practice event?
I. The term “sales practice event” means any customer complaint, arbitration, or civil litigation that has been reported to the Central Registration Depository
II. The term “sales practice event” means any customer complaint, arbitration, or civil litigation that has been reported to SEC
III. The term “sales practice event” means any customer complaint, arbitration, or civil litigation that has been reported to the Anti Money Laundering Compliance Program
IV. The term “sales practice event” means any customer complaint, arbitration, or civil litigation that has been reported to the Bank Secrecy ActCorrect
Incorrect
Rule no 1011. Definitions
The term “sales practice event” means any customer complaint, arbitration, or civil litigation that has been reported to the Central Registration Depository, currently is required to be reported to the Central Registration Depository, or otherwise has been reported to FINRA. -
Question 5 of 10
5. Question
A participating broker dealer must:
I. must be registered under SEC
II. maintain an ownership interest in the carrying/clearing member pursuant to Federal Reserve Board
III. maintain an ownership interest in the carrying/clearing member pursuant to Federal Reserve Bank
IV. maintain a minimum liquidating equity of $1 million in the JBO arrangement exclusive of the ownership interestCorrect
Rule no 4210. Margin Requirements
A participating broker-dealer must:
a. be a registered broker-dealer subject to the SEC’s net capital requirements and, if applicable, Rule 4110(a);
b. maintain an ownership interest in the carrying/clearing member pursuant to Regulation T of the Federal Reserve Board, Section 220.7; and
c. maintain a minimum liquidating equity of $1 million in the JBO arrangement exclusive of the ownership interest established in subparagraph (ii)b. above. When the minimum liquidating equity decreases below the $1 million requirement, the participant must deposit a sufficient amount to eliminate this deficiency within 5 business days or be subject to margin account requirements prescribed for customers in Regulation T, and the margin requirements pursuant to the other provisions of this Rule.Incorrect
Rule no 4210. Margin Requirements
A participating broker-dealer must:
a. be a registered broker-dealer subject to the SEC’s net capital requirements and, if applicable, Rule 4110(a);
b. maintain an ownership interest in the carrying/clearing member pursuant to Regulation T of the Federal Reserve Board, Section 220.7; and
c. maintain a minimum liquidating equity of $1 million in the JBO arrangement exclusive of the ownership interest established in subparagraph (ii)b. above. When the minimum liquidating equity decreases below the $1 million requirement, the participant must deposit a sufficient amount to eliminate this deficiency within 5 business days or be subject to margin account requirements prescribed for customers in Regulation T, and the margin requirements pursuant to the other provisions of this Rule. -
Question 6 of 10
6. Question
Which of the following statement is true about annualized discount?
Correct
Rule no 4210. Margin Requirements
The term “annualized discount” as used with reference to a Treasury bill means the percent discount from principal amount at which the Treasury bill may be purchased or sold, expressed as a discount for a term to maturity of 360 days.Incorrect
Rule no 4210. Margin Requirements
The term “annualized discount” as used with reference to a Treasury bill means the percent discount from principal amount at which the Treasury bill may be purchased or sold, expressed as a discount for a term to maturity of 360 days. -
Question 7 of 10
7. Question
Which of the following statements is/are true regarding “call” and “put” terms?
I. terms are used in connection within currency or currency index
II. terms are used in connection within options contract
III. terms are used in connection within interest bearing liabilities
IV. terms are used in connection within equity and capitalCorrect
Rule no 4210. Margin Requirements
as used in connection with a currency, currency index or stock index warrant mean a warrant structured as a “call” or “put” (as appropriate) on the underlying currency, index currency group or stock index group (as the case may be) or
b. as used in connection with an option contract means an option under which the holder has the right, in accordance with the terms of the option, to purchase from (in the case of a call), or sell to (in the case of a put)Incorrect
Rule no 4210. Margin Requirements
as used in connection with a currency, currency index or stock index warrant mean a warrant structured as a “call” or “put” (as appropriate) on the underlying currency, index currency group or stock index group (as the case may be) or
b. as used in connection with an option contract means an option under which the holder has the right, in accordance with the terms of the option, to purchase from (in the case of a call), or sell to (in the case of a put) -
Question 8 of 10
8. Question
Which of the following statements is/are true regarding escrow agreement?
I. An escrow agreement is a legal document that outlines the terms and conditions between parties involved, and the responsibility of each
II. These agreements usually involve an independent third party, called an escrow agent
III. Escrow agent who holds a share of value until the specified conditions of the contract are met
IV. Escrow agent who holds an asset of value until the specified conditions of the contract are metCorrect
Rule no 4210. Margin Requirements
The term “escrow agreement,” when used in connection with cash settled calls, puts, currency warrants, currency index warrants or stock index warrants, carried “short”, means any agreement issued in a form acceptable to FINRA under which a bank holding cash, cash equivalents, one or more qualified equity securities or a combination thereof in the case of a call or warrants, or cash, cash equivalents or a combination thereof in the case of a put or warrant is obligated (in the case of an option) to pay the creditor the exercise settlement amount in the event an option is assigned an exercise notice or, (in the case of a warrant) the sufficient funds to purchase a warrant sold “short” in the event of a buy-in.Incorrect
Rule no 4210. Margin Requirements
The term “escrow agreement,” when used in connection with cash settled calls, puts, currency warrants, currency index warrants or stock index warrants, carried “short”, means any agreement issued in a form acceptable to FINRA under which a bank holding cash, cash equivalents, one or more qualified equity securities or a combination thereof in the case of a call or warrants, or cash, cash equivalents or a combination thereof in the case of a put or warrant is obligated (in the case of an option) to pay the creditor the exercise settlement amount in the event an option is assigned an exercise notice or, (in the case of a warrant) the sufficient funds to purchase a warrant sold “short” in the event of a buy-in. -
Question 9 of 10
9. Question
What is index multiplier?
Correct
Rule no 4210. Margin Requirement
The term “index multiplier” as used in reference to an index option contract means the amount specified in the contract by which the index value is to be multiplied to arrive at the value required to be delivered to the holder of a call or by the holder of a put upon valid exercise of the contract.Incorrect
Rule no 4210. Margin Requirement
The term “index multiplier” as used in reference to an index option contract means the amount specified in the contract by which the index value is to be multiplied to arrive at the value required to be delivered to the holder of a call or by the holder of a put upon valid exercise of the contract. -
Question 10 of 10
10. Question
In case of an account confirming to the condition, exemption application as of the date of request should include?
I. cost price, offering price and principal amount of obligations which have been purchased or may be required to be purchased
II. approximate aggregate indebtedness
III. approximate net capital
IV. approximate value of common sharesCorrect
Rule no 4210. Margin Requirements
In the case of an account conforming to the conditions described in this paragraph (e)(3), the exemption application shall also include the following information as of the date of the request:
(A) complete description of the security;
(B) cost price, offering price and principal amount of obligations which have been purchased or may be required to be purchased;
(C) date on which the security is to be purchased or on which there will be a contingent commitment to purchase the security;
(D) approximate aggregate indebtedness;
(E) approximate net capitalIncorrect
Rule no 4210. Margin Requirements
In the case of an account conforming to the conditions described in this paragraph (e)(3), the exemption application shall also include the following information as of the date of the request:
(A) complete description of the security;
(B) cost price, offering price and principal amount of obligations which have been purchased or may be required to be purchased;
(C) date on which the security is to be purchased or on which there will be a contingent commitment to purchase the security;
(D) approximate aggregate indebtedness;
(E) approximate net capital