Quiz-summary
0 of 30 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
- 16
- 17
- 18
- 19
- 20
- 21
- 22
- 23
- 24
- 25
- 26
- 27
- 28
- 29
- 30
Information
FINRA Series 7
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 30 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
- 16
- 17
- 18
- 19
- 20
- 21
- 22
- 23
- 24
- 25
- 26
- 27
- 28
- 29
- 30
- Answered
- Review
-
Question 1 of 30
1. Question
Day Trading Risk Disclosure Statement (FINRA Rule 2270) includes the various risk disclosures. Which of the following is not included in the list:
Correct
The risks disclosures include: day trading is extremely risky; be cautious of claims of large profits from day trading; day trading requires knowledge of securities markets; day trading requires knowledge of a firm’s operations; day trading will generate substantial commissions, even if the per trade cost is low; day trading on margin or short selling may result in losses beyond your initial investment; and potential registration requirements.
Incorrect
The risks disclosures include: day trading is extremely risky; be cautious of claims of large profits from day trading; day trading requires knowledge of securities markets; day trading requires knowledge of a firm’s operations; day trading will generate substantial commissions, even if the per trade cost is low; day trading on margin or short selling may result in losses beyond your initial investment; and potential registration requirements.
-
Question 2 of 30
2. Question
Which of the following statements is (are) true regarding the Networking arrangements between members and financial institutions:
I. The member needs to be clearly identified
II. The services of the member should be distinguishable from the financial institution
III. The member should manage its services physically separate from the financial institution
IV. The member should have its name displayed where it conducts businessCorrect
Networking arrangements between members and financial institutions (FINRA Rule 3160) – a member that is a part of a networking agreement under which it conducts broker-dealer services on or off the premises of a financial institution is subject to the Rule. Setting – the member is to be clearly identified and have its services distinguished from the services of the financial institution, have its name displayed where it conducts business, and maintain its services physically separate from that of the financial institution if at all possible.
Incorrect
Networking arrangements between members and financial institutions (FINRA Rule 3160) – a member that is a part of a networking agreement under which it conducts broker-dealer services on or off the premises of a financial institution is subject to the Rule. Setting – the member is to be clearly identified and have its services distinguished from the services of the financial institution, have its name displayed where it conducts business, and maintain its services physically separate from that of the financial institution if at all possible.
-
Question 3 of 30
3. Question
Financial Industry Regulatory Authority (FINRA) Rules 4512 and 4515 describe the exact information about which of the following matter:
Correct
Customer account information- Financial Industry Regulatory Authority (FINRA) Rules 4512 and 4515 describe the exact information that a broker-dealer is required to have on file prior to opening an account for a new customer.
Incorrect
Customer account information- Financial Industry Regulatory Authority (FINRA) Rules 4512 and 4515 describe the exact information that a broker-dealer is required to have on file prior to opening an account for a new customer.
-
Question 4 of 30
4. Question
NASD Rule 3050 imposes obligations on which of the following party:
Correct
NASD Rule 3050 imposes certain obligations on associated persons who work with accounts that are owned by investment advisers, banks, or other financial institutions.
Incorrect
NASD Rule 3050 imposes certain obligations on associated persons who work with accounts that are owned by investment advisers, banks, or other financial institutions.
-
Question 5 of 30
5. Question
Which of the following comes under the responsibilities of the Associated Persons under the NASD Rule 3050:
I. They must notify their employer in writing related to transactions executions and account opening.
II. They must notify their customer in writing related to transactions executions and account opening.
III. They must provide the employer with duplicate copies of information about the account
IV. They must provide the customer with duplicate copies of information about the accountCorrect
Prior to opening the account or placing trades for one of the above customers, associated persons must notify their employer in writing of either the intent to execute the transactions or the intent to open the account. Additionally, the associated person must provide the customer with duplicate copies of confirmations, statements, or other information about the account or order upon the written request of either the customer or the associated person’s member firm. Finally, if the customer’s account was opened prior to the associated person’s association with the member firm, then the associated person must comply with this rule on an ongoing basis immediately upon their association.
Incorrect
Prior to opening the account or placing trades for one of the above customers, associated persons must notify their employer in writing of either the intent to execute the transactions or the intent to open the account. Additionally, the associated person must provide the customer with duplicate copies of confirmations, statements, or other information about the account or order upon the written request of either the customer or the associated person’s member firm. Finally, if the customer’s account was opened prior to the associated person’s association with the member firm, then the associated person must comply with this rule on an ongoing basis immediately upon their association.
-
Question 6 of 30
6. Question
Rule 405 created by NYSE relates to which of the following:
Correct
Rule 405, also endorsed by FINRA, requires that a representative gather enough information from the customer to make appropriate and suitable investment recommendations.
Incorrect
Rule 405, also endorsed by FINRA, requires that a representative gather enough information from the customer to make appropriate and suitable investment recommendations.
-
Question 7 of 30
7. Question
Regarding the FINRA Rule 2090, which of the following statement is true:
Correct
Know your customer (FINRA Rule 2090) – members of FINRA are to use reasonable diligence when opening and maintaining accounts for customers, and to get to know essential facts about the customer and concerning the authority of each person acting on behalf of a customer
Incorrect
Know your customer (FINRA Rule 2090) – members of FINRA are to use reasonable diligence when opening and maintaining accounts for customers, and to get to know essential facts about the customer and concerning the authority of each person acting on behalf of a customer
-
Question 8 of 30
8. Question
Who reviews the current financial statements and material business information of the issuer regarding the purchasing or short selling any OTC equity security:
Correct
No member is to recommend a customer purchase or sell short any OTC equity security unless the member has reviewed the current financial statements and material business information of the issuer and determined that the information provides a reasonable basis. The registered person designated to make this review is to be a General ecurities Principal or General Securities Sales Supervisor
Incorrect
No member is to recommend a customer purchase or sell short any OTC equity security unless the member has reviewed the current financial statements and material business information of the issuer and determined that the information provides a reasonable basis. The registered person designated to make this review is to be a General ecurities Principal or General Securities Sales Supervisor
-
Question 9 of 30
9. Question
Which of the following is true regarding the “member is not to sell investment company shares at a price below the point that the sales charge is reduced on quantity transactions in order to gain the applicable higher sales charges.”
Correct
Breakpoint sales (FINRA Rule 2342) – a member is not to sell investment company shares at a price below the point that the sales charge is reduced on quantity transactions in order to gain the applicable higher sales charges.
Incorrect
Breakpoint sales (FINRA Rule 2342) – a member is not to sell investment company shares at a price below the point that the sales charge is reduced on quantity transactions in order to gain the applicable higher sales charges.
-
Question 10 of 30
10. Question
Which of the following rule ensures the integrity of the capital markets and the confidence of retail investors that the markets are not “rigged” for the larger, institutional investors or those with critical inside information:
Correct
FINRA Rule 2020—Use of Manipulative, Deceptive or Other Fraudulent Devices states-The importance of this rule is in ensuring the integrity of the capital markets and the confidence of retail investors that the markets are not “rigged” for the larger, institutional investors or those with critical inside information.
Incorrect
FINRA Rule 2020—Use of Manipulative, Deceptive or Other Fraudulent Devices states-The importance of this rule is in ensuring the integrity of the capital markets and the confidence of retail investors that the markets are not “rigged” for the larger, institutional investors or those with critical inside information.
-
Question 11 of 30
11. Question
Which of the following relates to the practice of a registered individual benefitting from the knowledge of a customer or multiple customers’ placing a block order that may affect the price of the security:
Correct
Front-running is the practice of a registered individual benefitting from the knowledge of a customer or multiple customers’ placing a block order that may affect the price of the security in question by placing trades on the underlying security in their own accounts. This is unethical in every situation
Incorrect
Front-running is the practice of a registered individual benefitting from the knowledge of a customer or multiple customers’ placing a block order that may affect the price of the security in question by placing trades on the underlying security in their own accounts. This is unethical in every situation
-
Question 12 of 30
12. Question
Which of the following is true regarding making the untrue statements of material fact, or to omit to state a material fact with knowledge or reasonable grounds to believe that the statement is such:
Correct
Fraud and misrepresentation (Rule 15c1-2) – it is prohibited to make untrue statements of material fact, or to omit to state a material fact with knowledge or reasonable grounds to believe that the statement is such.
Incorrect
Fraud and misrepresentation (Rule 15c1-2) – it is prohibited to make untrue statements of material fact, or to omit to state a material fact with knowledge or reasonable grounds to believe that the statement is such.
-
Question 13 of 30
13. Question
A person is deemed to be involved in material nonpublic information in insider trading when he is aware of the information unless which of the following:
I. He became aware of the information after entering into an agreement to transact;
II. He instructed another to transact prior to becoming aware of the information
III. He became aware of the information at the time of agreement or transaction
IV. He adopted a written plan for trading securities before becoming aware of the information.Correct
Trading “on the basis of” material nonpublic information in insider trading ( SEA Rule 10b5-1) – a
person is deemed to be trading on the basis of material nonpublic information if the person was
aware of the information at the time of the transaction unless:
A. he became aware of the information after entering into an agreement to transact;
B. he instructed another to transact prior to becoming aware of the information;
C. he adopted a written plan for trading securities before becoming aware of the information.Incorrect
Trading “on the basis of” material nonpublic information in insider trading ( SEA Rule 10b5-1) – a
person is deemed to be trading on the basis of material nonpublic information if the person was
aware of the information at the time of the transaction unless:
A. he became aware of the information after entering into an agreement to transact;
B. he instructed another to transact prior to becoming aware of the information;
C. he adopted a written plan for trading securities before becoming aware of the information. -
Question 14 of 30
14. Question
Regulation SHO has been able to accomplish some of major goals, which of the following are not true in this regards:
I. Uniformity for pricing the securities
II. Standard procedure for the removal of short sale price tests
III. Uniformity among delivery requirements
IV. Uniform marking requirements for all equity securitiesCorrect
Regulation SHO accomplished three specific goals. First, it created uniformity among delivery requirements. Second, Regulation SHO created uniform marking requirements for all equity securities. Regulation SHO created a standard procedure for the removal of short sale price tests and restrictions when these provisions become unnecessary
Incorrect
Regulation SHO accomplished three specific goals. First, it created uniformity among delivery requirements. Second, Regulation SHO created uniform marking requirements for all equity securities. Regulation SHO created a standard procedure for the removal of short sale price tests and restrictions when these provisions become unnecessary
-
Question 15 of 30
15. Question
Under the FINRA Rule 3240, borrowing from or lending to customers is prohibited unless:
I. The member maintains written procedures for such transactions
II. The customer is a registered person with the same member firm
III. The lending arrangement is based on a personal relationship with the customer
IV. The lending arrangement is based on a business relationship outside of the broker-customer relationship.Correct
As stated in FINRA Rule 3240, borrowing from or lending to customers is prohibited unless:
1. The member maintains written procedures for such transactions
3. The customer is a registered person with the same member firm
4. The lending arrangement is based on a personal relationship with the customer
5. The lending arrangement is based on a business relationship outside of the broker-customer
relationship.Incorrect
As stated in FINRA Rule 3240, borrowing from or lending to customers is prohibited unless:
1. The member maintains written procedures for such transactions
3. The customer is a registered person with the same member firm
4. The lending arrangement is based on a personal relationship with the customer
5. The lending arrangement is based on a business relationship outside of the broker-customer
relationship. -
Question 16 of 30
16. Question
Which of the following statement is true regarding the disclosure of control relationship with issuer:
I. If common control exists between a member firm and the issuer of a security, it must be disclosed to the customer
II. If a firm has a financial interest in any security in primary or secondary distribution, it must be disclosed
III. All underwriting terms and agreements between the member firm and the issuer of the security must be disclosed
IV. If there are any private securities transactions between the member firm and issuer, they must be disclosedCorrect
Rule 2262 states that if common control exists between a member firm and the issuer of a security, the firm must disclose the relationship in writing to any customer wanting to buy or sell said security.
Rule 2269 states that if a firm is participating in or has a financial interest in any security either in primary or secondary distribution, this has to be disclosed in writing to the customer
Incorrect
Rule 2262 states that if common control exists between a member firm and the issuer of a security, the firm must disclose the relationship in writing to any customer wanting to buy or sell said security.
Rule 2269 states that if a firm is participating in or has a financial interest in any security either in primary or secondary distribution, this has to be disclosed in writing to the customer
-
Question 17 of 30
17. Question
FINRA Rule 5130 established a list of persons prohibited from buying new issues. Which of the following is not a part of the list:
Correct
This list includes members of FINRA and their employees, representatives of the underwriters that underwrote the new issue, a shareholder that owns more the 10 percent of a FINRA member firm, portfolio managers, and immediate family members of the preceding.
Incorrect
This list includes members of FINRA and their employees, representatives of the underwriters that underwrote the new issue, a shareholder that owns more the 10 percent of a FINRA member firm, portfolio managers, and immediate family members of the preceding.
-
Question 18 of 30
18. Question
FINRA Rule 5190 outlines the required notifications for which of the following matter:
Correct
FINRA Rule 5190 outlines the required notifications for new public offerings. It provides requirements for securities subject to a restricted period under SEC Regulation M as well as actively traded securities
Incorrect
FINRA Rule 5190 outlines the required notifications for new public offerings. It provides requirements for securities subject to a restricted period under SEC Regulation M as well as actively traded securities
-
Question 19 of 30
19. Question
______ is a person who directly or indirectly controls or is under common control with the specified person.
Correct
Affiliate – a person who directly or indirectly controls or is under common control with the specified person.
Incorrect
Affiliate – a person who directly or indirectly controls or is under common control with the specified person.
-
Question 20 of 30
20. Question
Which of the following relates to an order to purchase a security at the most advantageous price:
Correct
Market order – an order to purchase a security at the most advantageous price.
Incorrect
Market order – an order to purchase a security at the most advantageous price.
-
Question 21 of 30
21. Question
Which of the following is not a part of the NYSE Rule 123D – Designated market makers (DMMs):
Correct
NYSE Rule 123D – Designated market makers (DMMs) are to ensure that registered securities open as close to the opening bell as possible
A. Equipment changeover
B. Investment company units or index-linked securities
C. Dissemination of net asset valueIncorrect
NYSE Rule 123D – Designated market makers (DMMs) are to ensure that registered securities open as close to the opening bell as possible
A. Equipment changeover
B. Investment company units or index-linked securities
C. Dissemination of net asset value -
Question 22 of 30
22. Question
IPO must be notified to SEC, who is obliged to notify NASDAQ the IPO has been released by the SEC:
Correct
it is the obligation of the lead underwriter to notify NASDAQ the IPO has been released by the SEC.
Incorrect
it is the obligation of the lead underwriter to notify NASDAQ the IPO has been released by the SEC.
-
Question 23 of 30
23. Question
The general decrease in prices is reflected the best as which of the following term:
Correct
Deflation refers to a decline in the general price level of goods, usually as measured by the consumer price index (CPI) or the producer price index (PPI).
Incorrect
Deflation refers to a decline in the general price level of goods, usually as measured by the consumer price index (CPI) or the producer price index (PPI).
-
Question 24 of 30
24. Question
______ means that the strike price and market value of the stock are such that exercising the option would be a gain for the investor:
Correct
“In the money” means that the strike price and market value of the stock are such that exercising the option would be a gain for the investor
Incorrect
“In the money” means that the strike price and market value of the stock are such that exercising the option would be a gain for the investor
-
Question 25 of 30
25. Question
Which of the following are not backed with government power, but nonetheless are granted limited power and authority to enforce regulations and standards within their industry and over the members belonging to the organization:
Correct
SROs are self-regulatory organizations. These types of organizations are not backed with government power, but nonetheless are granted limited power and authority to enforce regulations and standards within their industry and over the members belonging to the organization
Incorrect
SROs are self-regulatory organizations. These types of organizations are not backed with government power, but nonetheless are granted limited power and authority to enforce regulations and standards within their industry and over the members belonging to the organization
-
Question 26 of 30
26. Question
Which of the form is filed by a broker dealer upon a registered representative’s departure from the firm:
Correct
The Form U-5 is the form filed by a broker dealer upon a registered representative’s departure from the firm
Incorrect
The Form U-5 is the form filed by a broker dealer upon a registered representative’s departure from the firm
-
Question 27 of 30
27. Question
Each of the following statement is TRUE regarding the Research reports EXCEPT:
Correct
Research reports are any documents which communicate information related to the characteristics, strengths, and weaknesses of some particular stock, financial instrument, industry, commodity, or geographic region.
These reports are generally prepared by investment research teams.
Research reports need not be done “in house,” but can also be performed by a third party
Incorrect
Research reports are any documents which communicate information related to the characteristics, strengths, and weaknesses of some particular stock, financial instrument, industry, commodity, or geographic region.
These reports are generally prepared by investment research teams.
Research reports need not be done “in house,” but can also be performed by a third party
-
Question 28 of 30
28. Question
______ are the durations of time when an issuer of initial public offerings (IPOs) are forbidden by the SEC from publicly promoting themselves, including the publication of research reports.
Correct
Quiet periods are the durations of time when an issuer of initial public offerings (IPOs) are forbidden by the SEC from publicly promoting themselves, including the publication of research reports.
Incorrect
Quiet periods are the durations of time when an issuer of initial public offerings (IPOs) are forbidden by the SEC from publicly promoting themselves, including the publication of research reports.
-
Question 29 of 30
29. Question
Which of the following advertisements are related to specific municipal securities, issues of municipal securities, or features of municipal securities:
Correct
Product advertisements are advertisements related to specific municipal securities, issues of municipal securities, or features of
municipal securitiesIncorrect
Product advertisements are advertisements related to specific municipal securities, issues of municipal securities, or features of
municipal securities -
Question 30 of 30
30. Question
Which of the following statement is NOT true regarding the Investment Advisers Act of 1940:
Correct
The Investment Advisers Act of 1940 prohibits investment advisers from providing their services to any government client for a period of two years following any political contribution they have made. And this rule applies not merely to those who make contributions to officials who are elected or to officials who later become elected, but to all officials who may become elected. Furthermore, advisers are forbidden from soliciting contributions for various officials or candidates if he is also pursuing or providing business with the government.
Incorrect
The Investment Advisers Act of 1940 prohibits investment advisers from providing their services to any government client for a period of two years following any political contribution they have made. And this rule applies not merely to those who make contributions to officials who are elected or to officials who later become elected, but to all officials who may become elected. Furthermore, advisers are forbidden from soliciting contributions for various officials or candidates if he is also pursuing or providing business with the government.