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Question 1

A broker-dealer (BD) creates a marketing postcard that includes a statement regarding FINRA's endorsement of the BD. Which of the following responses is true?

Options :

A : The statement regarding FINRA-s endorsement is not permissible.

B : The statement is permissible if a principal of the BD approves it in writing prior to use.

C : The statement is permissible if the statement is approved in writing by FINRA prior to use.

D : The statement is permissible if the postcard does not discuss specific investment opportunities.

Answer: A

Question 2

A customer buys 100 ABC at $50 and at the same time sells an ABC April 50 call at $8. At expiration, ABC must be at what market price for the customer to break even?

Options :

A : $42

B : $44

C : $50

D : $58

Answer: A

Question 3

Executing trades using the delivery versus payment (DVP) settlement process requires the buyer to make a cash payment by which of the following deadlines?

Options :

A : On the 5th business day after execution

B : Before or at the same time as securities being delivered

C : No later than 3 days after the securities are delivered

D : By the agreed-upon settlement date with the issuer

Answer: B

Question 4

The process in which the buying firm must pay for the securities and the selling firm must deliver the securities is known as:

Options :

A : A corporate action

B : Clearing the trade

C : The settlement of the transaction

D : A delivery versus payment (DVP) transaction

Answer: C

Question 5

Which of the following terms describes failure to honor a firm quote?

Options :

A : Freeriding

B : Backing away

C : Interpositioning

D : Market manipulation

Answer: B