Exam (elaborations)
Series 24 - Financial Responsibility and Net Capital Questions with Correct Answers
- Course
- Institution
Series 24 - Financial Responsibility and Net Capital Questions with Correct Answers
[Show more]
Content preview
Series 24 - Financial Responsibility and Net CapitalQuestions with Correct Answers
What are the two requirements for a subordinated loan? Correct Answer-
It must:
- Be in writing for a specified amount of cash or securities
- Have at least a one year duration; no prepayment for first year
What are the three requirements for a temporary subordinated loan?
Correct Answer-- Allowed for a maximum duration of 45 days
- No more than three such loans in a 12-month period
- Firm's ratio of AI/NC does not exceed 10:1 or its net capital is not
below 120% of the minimum
When must temporary and regular subordinated loan agreements be
filed? Correct Answer-For SEC, 10 days prior to the effective date. For
FINRA, temporary loan agreements 10 days prior to the effective date;
and regular subordinated loan agreements 30 days prior to the effective
date.
What is total capital, tentative net capital, and net capital? Correct
Answer-Equity + Debt = Total Capital.
Total Capital - Non-Allowable Assets = Tentative Net Capital.
Tentative Net Capital - Haircuts on security positions = Net Capital.
What is the minimum net capital requirement for a prime broker?
Correct Answer-$1,500,000
, What is the minimum net capital requirement for a qualified block
positioner? Correct Answer-$1,000,000
What is the minimum net capital requirement for a carrying broker?
Correct Answer-$250,000
What is the minimum net capital requirement for underwriters and
market makers? Correct Answer-$100,000
What is the minimum net capital requirement for non-carrying brokers?
Correct Answer-$50,000. They receive, but do not hold, customer funds.
What is the minimum net capital requirement for other broker-dealers?
Correct Answer-$5,000. They neither receive nor hold customer funds.
What are net capital requirements for a market maker? Correct Answer-
$100,000 minimum and $1,000,000 maximum.
$1,000 per stock at $5 or less.
$2,500 per stock above $5.
Does aggregate indebtedness (AI) include subordinated loans? Correct
Answer-No. AI does not include subordinated or collateralized loans
(that are not collaterlized by customer funds).
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller cracker. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83100 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now