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FINRA Regulation Rules Exam 122 Questions with Verified Answers,100% CORRECT
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FINRA Regulation Rules Exam 122 Questions with Verified Answers
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FINRA Regulation Rules Exam 122 Questions with VerifiedAnswers
FINRA enforces regulations in which of the following markets?
I. first market
II. second market
III. third market
IV. fourth market - CORRECT ANSWER All of them
To take a second job, under FINRA rules, a registered rep must obtain prior
written approval from (the):
a. FINRA
b. SEC
c. branch manager
d. financial and operations principal - CORRECT ANSWER branch manager
Under FINRA rules, a registered rep:
a. may borrow money from a customer only with permission of FINRA
b. may borrow money from a customer only with permission of the branch
manager
c. may borrow money from a customer only with permission of the customer
d. may not borrow money from a customer - CORRECT ANSWER may not borrow
money from a customer
A registered rep takes a customer out to dinner and a show, spending $180. This
activity is:
a. a violation of FINRA rules
b. permitted because less than $100 was spent on a per-person basis
c. permitted if it complies with the firm's policies and procedures
d. permitted under all circumstances - CORRECT ANSWER permitted if it complies
with the firm's policies and procedures
A registered rep has written a research report about oil stocks that he wishes to
mail to customers. Which statement is TRUE?
,a. the report must be approved by the SEC
b. the report must be approved by a supervisory analyst
c. the report must be approved by FINRA
d. no prior approval is required - CORRECT ANSWER the report must be approved
by a supervisory analyst
Arbitration is preferred over litigation as a means for settling disputes because:
a. it is less time consuming and less expensive
b. it allows the parties involved to get a hearing of their grievances
c. the decision cannot be appealed
d. the arbitration panel is more knowledgeable about industry practices -
CORRECT ANSWER it is less time consuming and less expensive
Notification to FINRA is required for all of the following EXCEPT:
a. a written customer complaint is received about a registered employee
misappropriating customer funds
b. a registered representative is arrested for assault and battery
c. a registered rep is committed to a mental institution
d. a registered rep is indicted under the Securities Exchange Act of 1934 for
"insider trading" violations - CORRECT ANSWER a registered rep is committed to a
mental institution
If a brokerage firm receives a written customer complaint, then:
a. the complaint must be forwarded to the firm's self regulatory organization
(SRO) for resolution
b. the firm must resolve the complaint and keep a separate file of the complaints,
with action taken, for inspection by the SRO
c. the registered rep is responsible for resolving the customer complaint and
keeping the records of actions taken
d. no action need be taken unless the customer has also complained directly to
the self regulatory organization - CORRECT ANSWER the firm must resolve the
complaint and keep a separate file of the complaints, with action taken, for
inspection by the SRO
The FINRA 5% policy requires that consideration be given to all of the following
when determining mark-ups and commissions EXCEPT:
a. financial condition of customer
,b. dollar amount of the transaction
c. level of service provided by the firm
d. type of security involved in the transaction - CORRECT ANSWER financial
condition of customer
FINRA's 5% policy applies to which of the following?
a. sales charges on mutual fund offering
b. mark-ups charged on principal transactions of municipal bonds
c. underwritings spreads charged on new issue offerings effected over-the-
counter
d. commissions charged on transactions effected over-the-counter - CORRECT
ANSWER commissions charged on transactions effected over-the-counter
An order ticket is filled out and sent to the NYSE floor for execution. After being
executed on the floor, it is discovered that the account number is incorrect.
Under FINRA rules, the account number may be changed to the correct one by
the:
a. registered rep
b. specialist
c. branch office manager
d. floor governor - CORRECT ANSWER branch office manager
Under FINRA rules, copies of order tickets must be kept for:
a. 6 months
b. 2 years
c. 3 years
d. 5 years - CORRECT ANSWER 3 years
d. 5 years
Which statements are TRUE about the use of the FINRA name on a member firm's
or associated person's website?
I. the FINRA name can be shown
II. the FINRA name must be shown
III. if the FINRA name is shown, it must be hyperlinked to the FINRA website
IV. If the FINRA name is shown, it must be stated that FINRA does not sponsor the
website - CORRECT ANSWER the FINRA name can be shown
if the FINRA name is shown, it must be hyperlinked to the FINRA website
, All of the following time stamps are on an order ticket EXCEPT the time of order:
a. entry
b. execution, if executed
c. cancellation, if cancelled
d. confirmation - CORRECT ANSWER confirmation
Customers may be charged for all of the following services EXCEPT:
a. collection of dividends on street name stock
b. safekeeping of securities
c. mailing of proxies on street name stock
d. collection of interest on bonds held in safekeeping - CORRECT ANSWER mailing
of proxies on street name stock
In a secondary offering, a member who acted as manager or co-manager CANNOT
issue a research report on that company within how many days following the
effective date?
a. 3 calendar days
b. 5 calendar days
c. 10 calendar days
d. 25 calendar days - CORRECT ANSWER 3 calendar days
If a member firm acts as the managing underwriter in an initial public offering of
an issue's securities, then the member is prohibited from issuing a research report
on that company for:
a. 3 days following the effective date
b. 5 days following the effective date
c. 10 days following the effective date
d. 25 days following the effective date - CORRECT ANSWER 10 days following the
effective date
A registered rep would like to increase his production by working from home at
nights and on weekends. As part of this effort, the rep wants to use his home e-
mail account to send his customers information and recommendations. This
action is:
a. permitted as long as the rep uses his personal email account
b. permitted with prior permission of the branch manager
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