Series 65: Unit 23 Quiz 1 || with 100% Accurate Solutions.
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Series 65: Unit 23
Institution
Series 65: Unit 23
An investor purchased 100 shares of GRA stock at $100 per share in a margin account. Two years later, the GRA was sold for $120 per share. If the investor's account was charged $700 in margin interest, it would be proper to state that this is an example of
A. a long-term capital gain of $1,300.
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Series 65: Unit 23 Quiz 1 || with 100% Accurate Solutions.
An investor purchased 100 shares of GRA stock at $100 per share in a margin account. Two
years later, the GRA was sold for $120 per share. If the investor's account was charged $700 in
margin interest, it would be proper to state that this is an example of
A. a long-term capital gain of $1,300.
B. negative margin.
C. positive margin.
D. a speculative investment. correct answers Positive margin
A client owns 300 shares of BACH common stock in a margin account. The stock was originally
purchased at a price of $40 per share and the Reg. T call was met. If the BACH is now selling for
$50 per share, disregarding interest charges, the client's equity is now
A. $9,000
B. $1,000
C. $6,000
D. $3,000 correct answers $9k
If a clearing firm receives a text message from a customer complaining about the activities of an
associated person at one of its introducing broker-dealers, the clearing firm must do all of the
following except
A. follow the complaint procedure because a complaint through a text message is considered to
be a written complaint.
B. forward the complaint to the introducing firm.
C. forward the complaint to the SEC.
D. notify the customer that the complaint was received and forwarded. correct answers Forward
the complaint to the SEC
Under the Securities Exchange Act of 1934, an exchange is
A. any transaction involving a security
B. an organization that provides facilities for bringing together buyers and sellers of securities
C. an organization of securities professionals designed to promote fair practices in doing
business with the public
D. a disposition of a security for value correct answers An organization that provides facilities
for bringing together buyers and sellers of securities
One of the primary differences between trading on listed exchanges and trading in the over-the-
counter market is that only on the exchanges are prices determined
A. by an auction process.
B. by the exchange itself.
C. through a negotiation process.
, D. by the FINRA 5% markup policy. correct answers By an auction process
A client of a broker-dealer is obligated to replace stock she sold after borrowing it from the
broker-dealer. From this information, you can conclude that she
A. engaged in a short sale of the stock
B. took a short position in a call option
C. was straddling a commingled arbitrage
D. took a short position in a put option correct answers Engaged in a short sale of the stock
Large investors, such as hedge funds or institutions, using high-speed systems to monitor and
submit large number of orders to the markets are engaging in
A. market manipulation.
B. market making.
C. high frequency trading.
D. front running. correct answers High frequency trading
When a broker-dealer acts in the capacity of a principal in a trade, the firm has acted
A. for the benefit of the client
B. in an unethical manner
C. as a contra party to the trade
D. as an agent correct answers As a contra party to the trade
A client enters an order as follows: Sell stop 100 shares of LTC at 45 limit 45.50. Following the
entry of that order, trades occur in the following sequence: 47; 46; 45.12; 44.97; 45.28; 45.97;
46.05. More than likely, the client received
A. 45.97
B. 45.28
C. 46.05
D. 44.97 correct answers 45.97
Margin regulations are determined by the Board of Governors of the Federal Reserve System.
The authority for them to do so is found in
A. the Securities Exchange Act of 1934
B. the Maloney Act of 1938
C. the Securities Act of 1933
D. the Federal Reserve Act of 1913 correct answers The Securities Exchange Act of 1934
A customer representing an institution calls the securities agent to complain that a security
bought one year ago is showing a loss. The customer's job will be lost unless he is able to get out
of the security at breakeven or a small loss. The market is 78-81 in the security and the
customer's cost is 85. The agent can legally:
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