Finra series 7 - Study guides, Class notes & Summaries

Securities Act of 1933 Federal legislation requiring the full fair disclosure of all material information about the issuance of new securities. Securities Exchange Act of 1934 Federal legislation that established the Securities and Exchange Commission. The act aims to protect investors by regulating the exchanges, the over-the-counter market, the extension of credit by the Federal Reserve Board, broker/dealers, insider transactions, trading activities, client accounts, and net capital Secu...

Which of the following option strategies, besides going long a call, can be used to purchase stock below its current market value? A) Short call B) Short straddle C) Long put D) Short put A) Short call B) Short straddle C) Long put D) Short put If the put is exercised by the owner, the writer of the put will be obligated to purchase the stock. The cost of the stock is reduced by the amount of premium taken in when the put was written, allowing the investor to purchase the stock at a ne...

FINRA SECURITIES INDUSTRY REGULATIONS SERIES 7 EXAM SOLUTIONS QUESTIONS AND ANSWERS A+ VERIFIED

A registered principal or registered representative must retake the qualifying exam if his or her registration has been revoked or terminated for a period of ____________ or more. A.) 1 year B.) 5 years C.) 3 years D.) 2 years D.) 2 Years A member may maintain a representative registration for which of the following persons?I. A person who performs legal, compliance, or internal audit functions for the memberII. A person who performs back-office functions for the memberIII. A person who i...

You received a signed broker-to-broker transfer initiation form (TIF) from an established customer desiring to transfer a specifically designated part of his account to your firm, which is eligible to use the Automated Customer Account Transfer Service (ACATS). Your firm is obligated to submit the transfer instruction to the carrying member by establishing the instruction in the ACATS A) Immediately. B) within 1 business day. C) within 3 business days. D) within 2 business days. A FINRA...

Opposite of Buy Long Hold Sell Short Write an investor is long 1 XYZ Dec 40 call at 3. just prior to the close of market on the final trading day before expiration, xyz stock is trading at 47. what is the gain/loss to the investor? ANSWER: The investor is long the contract so they have already paid a premium. if the investor bought to close a position they will need to sell to offset the open long position. This investor will sell the contract for its intrinsic value because there is no time ...

FINRA Series 7 questions with 100% correct answers graded A+

a customer wants to change the name on their account (i.e. after getting married), who must approve it? Registered Principal Must approve the account If a client changes to another registered rep at the same firm, what is the first step? First step would be for the new registered rep to review the clients account. If a new customer asks a registered rep to replicate the portfolio of his friend what should they do? The registered rep should first touch base with the new customer to review t...

Under SEC rules, the purchaser of Regulation D private placement must complete and sign a(n): accredited investor questionnaire How does restricted stock differ from control stock in a Rule 144 sale? control stock must be held fully paid for a minimum of 6 months prior to sale while restricted stock can be sold immediately The prohibited practice of "spinning" is defined under FINRA rules as an arrangement where a: member firm gives officers of public companies IPO allocations in return ...

New Account Form -The information required on anew account form would depend upon the type of security that will be traded Required Info on New Account Form -Customer Name -Cash or Margin Account -DOB -SS or tax ID # -citizenship Firms must verify what 4 things? -Name -Address -SS or tax ID -DOB Customer Identification Program (CIP) put in place to impede terrorists from having bank/ brokerage accounts in the US from which the could transfer funds SIPC Notice When the account ...