FINRA Exam 2026/2027 | Updated Questions & 100% Verified Answers |
Graded A+
Mediation - ANSWER Arbitration and ______ are two distinct methods of resolving securities
disputes between two or more parties. Disputes, claims or controversies arising out of business
dealings with any FINRA brokerage firm can be resolved in arbitration or ______.
Arbitration - ANSWER ______ is a formal dispute resolution process in which the parties—customers,
brokers, or brokerage firms making or responding to a claim—select a neutral, third party called a(n)
______, to listen to the arguments set forth by parties, study the testimonial and/or documentary
evidence, and render a decision on the matter. By ______ your claim, you forego the opportunity to
have the same matter decided by a court of law because an ______ award is final and binding.
Mediation - ANSWER ______ is an informal, voluntary and non-binding process. A(n) ______
facilitates negotiations between disputing parties. The ______'s role is to help the parties find a
mutually acceptable solution to the dispute.
First - ANSWER Arbitration and mediation are important methods of dispute resolution that have
been used successfully by the securities industry and others, but they generally should not be your
______ steps.
Arbitration - ANSWER ______ is a method of resolving a dispute between two or more parties by
neutral, qualified individuals, who serve as decision-makers after weighing the facts of each case
presented. The decision-makers are called ______. ______ of securities disputes against brokerage
firms, brokers, or both provides a prompt and inexpensive means of resolving issues. There are
certain laws governing the conduct of an ______ proceeding. The most important of these is perhaps
the fact that an ______ award is final and binding, subject to review by a court only on a very limited
basis. Parties should also recognize that ______ their claims precludes them from pursuing the same
claims through the courts.
Request for Mediation - ANSWER You may file a ______ ______ ______ at any time, whether or not
you have already filed an arbitration claim. However, ______ is a voluntary process — no party is
required to ______ a dispute. When we receive your request, FINRA Dispute Resolution staff will
contact the other party or parties to the dispute to explain the ______ process, and seek their
agreement to ______.
Mediation - ANSWER Initiate a ______: This is the first step of the ______ process. When one party
expresses an interest in ______, FINRA will contact the other parties to determine their interest, The
parties may submit all or some of the issues in dispute to ______, and may ______ selected
substantive or procedural issues.
,Complaint - ANSWER If you file a ______ with the Investor ______ Center, FINRA can investigate any
potentially fraudulent or suspicious activities by brokerage firms or registered representatives. You
must initiate an arbitration or mediation to pursue monetary damages or other restitution.
Attorney - ANSWER You should consider hiring an ______ to represent you during the arbitration or
mediation proceedings to provide direction and advice. Even if you do not choose to hire an ______,
brokerage firms are generally represented by an ______. If you cannot afford an ______, some law
schools provide legal representation through securities arbitration clinics. You can also check: (1)
American Bar Association;
(2) Public Investors Arbitration Bar Association; (3) Martindale - Hubbell
Database - ANSWER FINRA's Arbitration Awards ______ enables users to search online for FINRA and
NASD arbitration awards free of charge, seven days a week.
Exchanges - ANSWER FINRA provides dispute resolution services for several ______ that are not able
to staff or operate a dispute resolution program. These services include administration of the
______'s member-member, member-investor and member-employer securities-industry related
disputes. The term "member" may include brokerage firms that are not members of FINRA.
Code of Mediation Procedure - ANSWER This Code contains the official FINRA rules governing
mediations. (7 pages)
Statement of Claim - ANSWER The arbitration process begins with a party filing a ______ ______
_____ with FINRA. The party who files the ______ ______ ______ is called a claimant. The party
against whom the ______ ______ ______ is filed is called the respondent. The ______ ______ _____
should provide the details of the dispute, including relevant dates, names of entities and individuals
involved, and the type of relief requested and the respondents from whom the claimant is seeking
relief or damages. The type of relief a claimant may request, includes, but is not limited to, actual
monetary damages, interest, and specific performance.
ANSWER - ANSWER An ______ is a written document that specifies the relevant facts and available
defenses to the Statement of Claim. A respondent files an ANSWER to the claimant's Statement of
Claim.
Number - ANSWER The ______ of arbitrators appointed to a case depends on the amount and type
of relief requested in the Statement of Claim.
,Initial Prehearing Conference (IPHC) - ANSWER Once the panel is appointed, FINRA schedules the
______ ______ ______ (______). The ______ is the first time that the parties and arbitrators meet to
set the schedule for the case and usually held by telephone. During this telephone conference, the
arbitration panel will schedule evidentiary hearing dates, establish discovery deadlines, set briefing
and motion deadlines, determine whether mediation is desirable, and address other preliminary
matters.
Discovery Process - ANSWER The ______ ______ allows the parties to obtain facts and information
from other parties to the arbitration in order to support their own case and prepare for the hearing.
The Codes of Arbitration Procedure require parties to cooperate with each other to the fullest extent
practicable in the voluntary exchange of documents and information to expedite the arbitration
process. The Codes contain rules that govern the ______ ______, including making ______ requests,
responding to such requests, objecting to ______ requests, and arbitrator authority to issue
sanctions against parties for ______ abuses.
Closing - ANSWER After ______ the record, the arbitration panel considers all of the evidence,
deliberates together, and decides what relief the claimant is entitled to, if any.
Unanimous - ANSWER In a three-arbitrator panel, an award is based on the vote of a majority of the
arbitrators; a ______ decision is not required.
(Rules) Announcements - ANSWER ______ provide recent updates, changes, and notifications about
Dispute Resolution rules, proposals, and procedures.
Filing - ANSWER The party filing a claim must pay a ______ fee at the time the party files a Statement
of Claim. The amount of this fee is based on the total amount of the claim including any punitive and
treble damages requested, but excludes interest and expenses.
Fee waiver - ANSWER Parties may submit a written request for a ______ ______ stating the reason(s)
that would make payment of the filing fee a financial hardship.
In support of the request, parties should include the following information with the written request:
a copy of the most recently filed tax return;
two of the most recent pay stubs; and
documentation of garnishment or lien, or other documents that evidence hardship.
, Refund - ANSWER FINRA will issue a partial ______ of the filing fee, less any fees or costs owed by
that party, if the party notifies FINRA that the case is settled or withdrawn more than 10 calendar
days before a scheduled hearing, Any ______ will be paid directly to the named parties, even if a
non-party made payment on behalf of the named parties.
FINRA will not issue a ______ if a party notifies FINRA that a claim is settled or withdrawn within 10
calendar days of a scheduled hearing.
Auction Rate Securities (ARS) - ANSWER ______ ______ ______ (_____) are debt securities that are
sold through a dutch auction. A dutch auction is public offering auction structure in which the price
of the offering is set after taking in all bids and determining the highest price at which the total
offering can be sold. In a dutch auction, investors place a bid for the amount they are willing to buy in
terms of quantity and price. In this type of auction, an _____ is sold at an interest rate that will clear
the market at the lowest yield possible. This ensures that all bidders on an _____ receive the same
yield on the debt issue. The interest rate is reset periodically.
Investors covered by ______ final settlements with securities regulators (i.e., SEC, FINRA, and the
states) may participate in a Special Arbitration Process (SAP) to recover consequential damages.
Special Arbitration Process (SAP) - ANSWER The ______ ______ ______ (_____) are voluntary.
Eligible investors may choose any ______ associated with their brokerage firm. The ______ found in
the various regulatory settlements are not similar. Provisions for payment of fees, damages, and
other procedures may vary from settlement to settlement. Eligible investors should review all
applicable ______ before filing a claim.
Age - ANSWER Arbitrators are encouraged to consider the health and ______ of a party when:
Scheduling hearing dates;
Considering postponement requests; and
Setting discovery deadlines.
Expedited - ANSWER Various state statutes provide for speedy trials in civil actions involving seniors
or seriously ill parties. FINRA recognized a need for ______ hearings in arbitrations involving such
parties in its dispute resolution forum. Thus, on June 7, 2004, FINRA implemented various measures
to expedite arbitration proceedings in matters involving seniors or seriously ill parties.
Under these proceedings, FINRA Dispute Resolution staff (staff) will endeavor to do the following on
an _____ basis:
Graded A+
Mediation - ANSWER Arbitration and ______ are two distinct methods of resolving securities
disputes between two or more parties. Disputes, claims or controversies arising out of business
dealings with any FINRA brokerage firm can be resolved in arbitration or ______.
Arbitration - ANSWER ______ is a formal dispute resolution process in which the parties—customers,
brokers, or brokerage firms making or responding to a claim—select a neutral, third party called a(n)
______, to listen to the arguments set forth by parties, study the testimonial and/or documentary
evidence, and render a decision on the matter. By ______ your claim, you forego the opportunity to
have the same matter decided by a court of law because an ______ award is final and binding.
Mediation - ANSWER ______ is an informal, voluntary and non-binding process. A(n) ______
facilitates negotiations between disputing parties. The ______'s role is to help the parties find a
mutually acceptable solution to the dispute.
First - ANSWER Arbitration and mediation are important methods of dispute resolution that have
been used successfully by the securities industry and others, but they generally should not be your
______ steps.
Arbitration - ANSWER ______ is a method of resolving a dispute between two or more parties by
neutral, qualified individuals, who serve as decision-makers after weighing the facts of each case
presented. The decision-makers are called ______. ______ of securities disputes against brokerage
firms, brokers, or both provides a prompt and inexpensive means of resolving issues. There are
certain laws governing the conduct of an ______ proceeding. The most important of these is perhaps
the fact that an ______ award is final and binding, subject to review by a court only on a very limited
basis. Parties should also recognize that ______ their claims precludes them from pursuing the same
claims through the courts.
Request for Mediation - ANSWER You may file a ______ ______ ______ at any time, whether or not
you have already filed an arbitration claim. However, ______ is a voluntary process — no party is
required to ______ a dispute. When we receive your request, FINRA Dispute Resolution staff will
contact the other party or parties to the dispute to explain the ______ process, and seek their
agreement to ______.
Mediation - ANSWER Initiate a ______: This is the first step of the ______ process. When one party
expresses an interest in ______, FINRA will contact the other parties to determine their interest, The
parties may submit all or some of the issues in dispute to ______, and may ______ selected
substantive or procedural issues.
,Complaint - ANSWER If you file a ______ with the Investor ______ Center, FINRA can investigate any
potentially fraudulent or suspicious activities by brokerage firms or registered representatives. You
must initiate an arbitration or mediation to pursue monetary damages or other restitution.
Attorney - ANSWER You should consider hiring an ______ to represent you during the arbitration or
mediation proceedings to provide direction and advice. Even if you do not choose to hire an ______,
brokerage firms are generally represented by an ______. If you cannot afford an ______, some law
schools provide legal representation through securities arbitration clinics. You can also check: (1)
American Bar Association;
(2) Public Investors Arbitration Bar Association; (3) Martindale - Hubbell
Database - ANSWER FINRA's Arbitration Awards ______ enables users to search online for FINRA and
NASD arbitration awards free of charge, seven days a week.
Exchanges - ANSWER FINRA provides dispute resolution services for several ______ that are not able
to staff or operate a dispute resolution program. These services include administration of the
______'s member-member, member-investor and member-employer securities-industry related
disputes. The term "member" may include brokerage firms that are not members of FINRA.
Code of Mediation Procedure - ANSWER This Code contains the official FINRA rules governing
mediations. (7 pages)
Statement of Claim - ANSWER The arbitration process begins with a party filing a ______ ______
_____ with FINRA. The party who files the ______ ______ ______ is called a claimant. The party
against whom the ______ ______ ______ is filed is called the respondent. The ______ ______ _____
should provide the details of the dispute, including relevant dates, names of entities and individuals
involved, and the type of relief requested and the respondents from whom the claimant is seeking
relief or damages. The type of relief a claimant may request, includes, but is not limited to, actual
monetary damages, interest, and specific performance.
ANSWER - ANSWER An ______ is a written document that specifies the relevant facts and available
defenses to the Statement of Claim. A respondent files an ANSWER to the claimant's Statement of
Claim.
Number - ANSWER The ______ of arbitrators appointed to a case depends on the amount and type
of relief requested in the Statement of Claim.
,Initial Prehearing Conference (IPHC) - ANSWER Once the panel is appointed, FINRA schedules the
______ ______ ______ (______). The ______ is the first time that the parties and arbitrators meet to
set the schedule for the case and usually held by telephone. During this telephone conference, the
arbitration panel will schedule evidentiary hearing dates, establish discovery deadlines, set briefing
and motion deadlines, determine whether mediation is desirable, and address other preliminary
matters.
Discovery Process - ANSWER The ______ ______ allows the parties to obtain facts and information
from other parties to the arbitration in order to support their own case and prepare for the hearing.
The Codes of Arbitration Procedure require parties to cooperate with each other to the fullest extent
practicable in the voluntary exchange of documents and information to expedite the arbitration
process. The Codes contain rules that govern the ______ ______, including making ______ requests,
responding to such requests, objecting to ______ requests, and arbitrator authority to issue
sanctions against parties for ______ abuses.
Closing - ANSWER After ______ the record, the arbitration panel considers all of the evidence,
deliberates together, and decides what relief the claimant is entitled to, if any.
Unanimous - ANSWER In a three-arbitrator panel, an award is based on the vote of a majority of the
arbitrators; a ______ decision is not required.
(Rules) Announcements - ANSWER ______ provide recent updates, changes, and notifications about
Dispute Resolution rules, proposals, and procedures.
Filing - ANSWER The party filing a claim must pay a ______ fee at the time the party files a Statement
of Claim. The amount of this fee is based on the total amount of the claim including any punitive and
treble damages requested, but excludes interest and expenses.
Fee waiver - ANSWER Parties may submit a written request for a ______ ______ stating the reason(s)
that would make payment of the filing fee a financial hardship.
In support of the request, parties should include the following information with the written request:
a copy of the most recently filed tax return;
two of the most recent pay stubs; and
documentation of garnishment or lien, or other documents that evidence hardship.
, Refund - ANSWER FINRA will issue a partial ______ of the filing fee, less any fees or costs owed by
that party, if the party notifies FINRA that the case is settled or withdrawn more than 10 calendar
days before a scheduled hearing, Any ______ will be paid directly to the named parties, even if a
non-party made payment on behalf of the named parties.
FINRA will not issue a ______ if a party notifies FINRA that a claim is settled or withdrawn within 10
calendar days of a scheduled hearing.
Auction Rate Securities (ARS) - ANSWER ______ ______ ______ (_____) are debt securities that are
sold through a dutch auction. A dutch auction is public offering auction structure in which the price
of the offering is set after taking in all bids and determining the highest price at which the total
offering can be sold. In a dutch auction, investors place a bid for the amount they are willing to buy in
terms of quantity and price. In this type of auction, an _____ is sold at an interest rate that will clear
the market at the lowest yield possible. This ensures that all bidders on an _____ receive the same
yield on the debt issue. The interest rate is reset periodically.
Investors covered by ______ final settlements with securities regulators (i.e., SEC, FINRA, and the
states) may participate in a Special Arbitration Process (SAP) to recover consequential damages.
Special Arbitration Process (SAP) - ANSWER The ______ ______ ______ (_____) are voluntary.
Eligible investors may choose any ______ associated with their brokerage firm. The ______ found in
the various regulatory settlements are not similar. Provisions for payment of fees, damages, and
other procedures may vary from settlement to settlement. Eligible investors should review all
applicable ______ before filing a claim.
Age - ANSWER Arbitrators are encouraged to consider the health and ______ of a party when:
Scheduling hearing dates;
Considering postponement requests; and
Setting discovery deadlines.
Expedited - ANSWER Various state statutes provide for speedy trials in civil actions involving seniors
or seriously ill parties. FINRA recognized a need for ______ hearings in arbitrations involving such
parties in its dispute resolution forum. Thus, on June 7, 2004, FINRA implemented various measures
to expedite arbitration proceedings in matters involving seniors or seriously ill parties.
Under these proceedings, FINRA Dispute Resolution staff (staff) will endeavor to do the following on
an _____ basis:
