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

The civil penalty for an individual who is convicted of an insider trading violation is permitted to be an amount up to how many times the profit gained or loss avoided?

Options :

A : 1 time

B : 3 times

C : 6 times

D : 10 times

Answer: B

Question 3

An investor wants to purchase mutual fund shares, but she is concerned about the tax efficiency of the fund. Which of the following disclosures required under industry regulations will help the investor make an informed decision?

Options :

A : The fund-s turnover ratio

B : Sales charges and breakpoint discount opportunities

C : The commissions that the fund pays on each transaction

D : Projections of future dividend and capital gains distributions

Answer: A

Question 4

Which of the following is considered nonpublic information?

Options :

A : Customer-s name

B : Customer-s address

C : Customer-s net worth

D : Customer-s telephone number

Answer: C

Question 5

On settlement date, a customer is unable to pay for a purchase in his cash account. His position is liquidated. Which of the following statements is true according to Federal Reserve Regulation T?

Options :

A : Only closing transactions are permitted.

B : The customer is barred from trading for 30 days.

C : The customer-s account is frozen for 90 days.

D : All related accounts are frozen for 90 days.

Answer: C

Confidently Practice Online with Free SIE Exam Cram

Buying Options: