FINRA Practice Test Questions with
Complete Solutions24
Under normal circumstance, a customer's letter of intent on a mutual fund purchase is valid for
what maximum period of time?
3 months
6 months
13 months
24 months - ANSWERS-13 months
A savings account at a bank is guaranteed by which of the following entities?
FDIC
SIPC
Federal Reserve
Dept of the Treasury - ANSWERS-FDIC
UTMA accounts are opened under the tax ID of the:
Minor
Donor
Parent
Custodian - ANSWERS-Minor
Which of the following Form U4 reportable events results in statutory disqualification?
A personal bankruptcy filing
A written customer complaint alleging misappropriation of assets
,A felony theft charge
A felony conviction for a driving under the influence (DUI) charge - ANSWERS-A felony theft
charge
A married couple who warned income that exceeded $300,000 in each of the prior two years
and reasonably expects the same for the current year is:
A qualified investor
An accredited investor
An institutional investor
A qualified institutional buyer (QIB) - ANSWERS-An accredited investor
When is the interest on Treasury notes paid?
Quarterly
Semiannually
Annually
At maturity - ANSWERS-Semiannually
Which of the following investments are generally traded according to their average lie rather
than their state maturity dates?
Corporate bonds
Government bonds
Asset-backed securities
Fixed-rate capital securities - ANSWERS-Government Bonds
Which of the following represents the effect of a stock split?
The price per share of common stock increases
The price per share of common stock decreases
, Each stockholder's proportionate ownership decreases
Each stockholder's' proportionate ownership increases - ANSWERS-The price per share of
common stock DECREASES
The owner of which of the following products is MOST exposed to inflationary risk?
Utility stocks
Treasury bills
Treasury bonds
Blue chip industrials - ANSWERS-Treasury Bonds
A registered representative is reviewing the following portfolio:
30% ABC Energy Company
30% XYZ Health Care Company
30% Exchange-traded fund (tracks the S&P 500)
10% Money market Funds
Which of the following risks is inherent in this portfolio?
Credit
Liquidity
Political
Nonsystemic - ANSWERS-Nonsystematic
A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of
ABC stock for $35 per share. The customer will break even when the stock selling at what price
per share at expiration?
$3
$32
Complete Solutions24
Under normal circumstance, a customer's letter of intent on a mutual fund purchase is valid for
what maximum period of time?
3 months
6 months
13 months
24 months - ANSWERS-13 months
A savings account at a bank is guaranteed by which of the following entities?
FDIC
SIPC
Federal Reserve
Dept of the Treasury - ANSWERS-FDIC
UTMA accounts are opened under the tax ID of the:
Minor
Donor
Parent
Custodian - ANSWERS-Minor
Which of the following Form U4 reportable events results in statutory disqualification?
A personal bankruptcy filing
A written customer complaint alleging misappropriation of assets
,A felony theft charge
A felony conviction for a driving under the influence (DUI) charge - ANSWERS-A felony theft
charge
A married couple who warned income that exceeded $300,000 in each of the prior two years
and reasonably expects the same for the current year is:
A qualified investor
An accredited investor
An institutional investor
A qualified institutional buyer (QIB) - ANSWERS-An accredited investor
When is the interest on Treasury notes paid?
Quarterly
Semiannually
Annually
At maturity - ANSWERS-Semiannually
Which of the following investments are generally traded according to their average lie rather
than their state maturity dates?
Corporate bonds
Government bonds
Asset-backed securities
Fixed-rate capital securities - ANSWERS-Government Bonds
Which of the following represents the effect of a stock split?
The price per share of common stock increases
The price per share of common stock decreases
, Each stockholder's proportionate ownership decreases
Each stockholder's' proportionate ownership increases - ANSWERS-The price per share of
common stock DECREASES
The owner of which of the following products is MOST exposed to inflationary risk?
Utility stocks
Treasury bills
Treasury bonds
Blue chip industrials - ANSWERS-Treasury Bonds
A registered representative is reviewing the following portfolio:
30% ABC Energy Company
30% XYZ Health Care Company
30% Exchange-traded fund (tracks the S&P 500)
10% Money market Funds
Which of the following risks is inherent in this portfolio?
Credit
Liquidity
Political
Nonsystemic - ANSWERS-Nonsystematic
A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of
ABC stock for $35 per share. The customer will break even when the stock selling at what price
per share at expiration?
$3
$32
