Series 4 || with A+ Guaranteed Solutions.
Branch Office correct answers A location where the member conducts securities or investment
banking business that is advertised as such.
public appearance correct answers FINRA defines interactive real-time content on blogs, social
networking sites and chat rooms as
Sales literature correct answers non-interactive (static) content on blogs, social networking sites
and chat rooms is defined as
If a registered individual is terminated, FINRA must be notified with a U5 Form within: correct
answers 30 days
If a managing underwriter wishes to stabilize the price of a new issue in the secondary market:
correct answers a notice of stabilization must appear in the prospectus given to all purchasers of
the issue
The signature of the CEO on the annual compliance certification filed with FINRA means that
the CEO: correct answers reviewed the firm's compliance procedures
Minor Rules Violation Procedure correct answers 1) member admits guilt, 2) offense is minor, 3)
penalty is limited to a maximum $2,500 fine
If there is a customer complaint, FINRA retains jurisdiction over a resigned member for: correct
answers 2 years
If FINRA suspends or expels a member, it will notify the: correct answers FINRA Membership,
News Services
Disputes between FINRA members about deliveries of securities will be handled through the:
correct answers Code of Arbitration
Designated Registered Options Principal correct answers must approve options advertisements,
options sales literature, and independently prepared reprints.
Excluding the trading volume test, how much of the issuer's outstanding shares can be sold every
90 days under Rule 144? correct answers 1%
TRACE reports OTC trades of correct answers corporate, government and agency bonds
The TRF is open from: correct answers 8:00 AM - 8:00 PM ET
A broker-dealer can charge for clerical services such as correct answers collection of dividends;
safekeeping of securities; and appraisals of securities
,Options strike prices are adjusted on ex date for: correct answers Even stock splits: deliverable
Under the "cheap stock rule," if a customer wishes to short a stock under $5 a share, he must put
up the greater of correct answers 100% or $2.50 per share
I The development and implementation of a written program for the supervision of all customer
option accounts
II The development and implementation of a written program for the supervision of all customer
option orders
III Reviewing the supervisory performance of BOMs and other ROPs in the branch offices
IV Reviewing training of registered representatives with regard to options
Are all duties of whom correct answers The Designated Supervisory Registered Options
Principal
Customer Name, Customer Address, Customer Tax I.D. Number, Customer Date of Birth
Are all critical information in order to: correct answers Open an account
Selling exempted securities with a written agreement to buy them back at a later date is called a
correct answers Repurchase agreement
What is the maximum amount of customer securities that can be rehypothecated by a broker
correct answers 140% of the debit balance
Reg T of the Federal Reserve Board only applies to correct answers Non exempt securities.
Government and municipal are exempt
The margin to buy a LEAP option with over 9 months to expiration is set at what percentage?
correct answers 75%
The minimum maintenance requirement to sell a broad based index option is what percentage?
correct answers 10%
Does the customer sign the new account form? correct answers No, the signature that appears on
the new account form are the registered representative, and the manager or principal
New issues cannot be margined for how many days following the issuance correct answers 30
days
In a NEW account what is the minimum margin requirement correct answers $2000
In a restricted margin account, what percentage of the sales proceeds may be withdrawn correct
answers 50%
Under Regulation T, full payment in a cash account must be made when correct answers
Promptly, but no later than T+4
,Under Regulation T, an extension for payment may be requested on the: correct answers 2nd
business day after settlement date
Daily position reports issued by the OCC include changes in positions for which of the following
accounts? correct answers Customer accounts, firm accounts, and third party accounts
The Position Report, Margin Report, and the Depository Record is prepared daily by whom
correct answers The OCC(Options Clearing Corporation)
If assigned, the writer of a put option must deliver correct answers Cash on t+2
The premium collected from the "sale" of the index option in a BuyWrite Index option is
calculated correct answers based on the VWAP - Volume Weighted Average Price - of that
option, computed over a 1/2 hour time window on the third Friday of the month.
Foreign Currency Options expire on the correct answers Third Friday of the Month
If the seller of a call is exercised he/she must deliver correct answers The stock at the strike price
Foreign currency options have what type of exercise correct answers European
The maximum life on an LEAP is how long? correct answers 28 months
Who is not restricted from buying an IPO from the member firm that employs an associated
person correct answers Grandparents of the associated person
At what percentage is an option considered to be "deep in the money" correct answers 10%
In reference to index options, the index value is computed as of what time of day when exercised
correct answers The close
The deposit of cash will not cover the sale(write) of a call since the potential what is unlimited
correct answers Loss
An OEX Index Option, is exercised how and when? correct answers American/ PM
Exercise Limits on stock option contracts cover a time period of correct answers 5 Business
Days
Contracts are not adjusted for what type of dividends correct answers Cash dividends
Under SEC rules, customer account information must be verified by the member firm correct
answers
Regulation S-P is designed to protect correct answers Retail clients only, investment advisers,
and investment companies
, A cabinet transaction in an Options series effected on the AMEX of CBOE is permitted when,
and must be reported when, correct answers Permitted on any trading day, and must be reported
following the close of each business day
If a registered representative has an existing customer that is on the member firms "do-not-call"
list...the representative can and cannot do what? correct answers The representative cannot
contact the customer by telephone to recommend investments, the representative can contact the
customer by telephone to discuss the customers account profile.
Spread position can only be taken in what type of accounts correct answers Margin accounts
Regulation blank, prohibits issuers from making selective disclosure of non-public information
to research analysts, mutual fund managers, and other industry professionals, unless at the same
time, the information is broadly disseminated to the public correct answers Regulation FD
Options sales literature that is accompanied or proceeded by the options disclosure document can
show what type of information? correct answers Past performance, future projections, and
recommendations
The C.B.O.E requires that if there are more than how many registered persons in a location doing
options business, a branch manager must be registered as an option Principal for that location
correct answers More than 4
The options agreement necessary to open an Options account for a customer must be signed and
returned within how many days correct answers 15 calendar days
A CAP gain is a maximum gain of how much correct answers 30 points
Under Reg T, securities held in a margin account are marked to market daily by using the what
price correct answers Close
The designated Registered Options Principal is NOT responsible for correct answers The
approval of option accounts
True or False, the date of the confirmation of the first option transaction is required to be
maintained in a customers option account file correct answers False
Annual testing of a member firms AML program may be conducted by correct answers A
qualified outside party or member personnel
If a member firm wishes to change its procedure for the allocation of exercise notices assigned in
respect of a short position in customers accounts. The member firm: correct answers Can only
change its allocation method with prior approval of the SRO, and if it informs its customers of
the method used to allocate exercise notices, explaining its manner of operation and the
consequences of that system
