CSLB C20 TRADE TOUGHER EXAM PREP
QUESTIONS AND ANSWERS
COMPREHENSIVE REVIEW
●● What can a series 6 rep sell?
Answer: packaged products, such as mutual funds and annuities;
however, they may NOT sell REITs.
●● When and how long does a firm have to amend/update a U5
Answer: an ongoing obligation to amend Form U5 within 30 days
●● How long does a RR have to complete CE after it's anniversary date
Answer: 120 Days
●● Over what alleged value of a complaint will show up on a U4
Answer: $5,000 or more
●● Over what settled value of a complaint will show up on a U4
Answer: $15,000 or more
●● What is a broker's active military status called and what does it do
,Answer: Special Inactive Status exempts a RR from both the two-year
inactive status limitation and CE requirements
However, the tolling period will terminate 90 days following the
completion of active service
●● What does a RR have to provide its firm for outside business
activities
Answer: Written notice
●● If an MFP is going to conduct trades (for compensation / no
compensation) at another firm, what is needed
Answer: Written approval if compensated, written notice to MFPs firm if
the MFP isn't receiving compensation
●● How often does a RR need to participate in a compliance meeting
Answer: Annually
●● A claim is only eligible for submission to arbitration if the event
occured within the last ____ years
Answer: Six years. After six years, one cannot bring the claim to
arbitration
●● What is the limit for simplified arbitration
Answer: $50,000
, ●● What is the difference between Limited and Durable Power Of
Attorney
Answer: "Limited power of attorney allows a person to buy and sell
securities in a client's account, but it does NOT allow her to withdraw
assets or cash OR act on behalf of the account owner in the event of
mental incompetence or incapacitation.
Durable power of attorney allows a person to buy and sell securities in a
client's account, AND allows her to withdraw assets or cash AND can
act on behalf of the account owner in the event of mental incompetence
or incapacitation."
●● When is durable POA canceled
Answer: Client can cancel it, or immediately upon client's death.
●● What is a Not-Held order
Answer: "A non discretionary trade with three items that must be
specified from a client are action (buy/sell), amount (quantity), and asset
(security).
Day order only, specified in writing"
●● How can a RR share in the gains/losses with a client
Answer: With written approval of both a principal and the client, if it's in
direct proportion to the RR's contribution.
QUESTIONS AND ANSWERS
COMPREHENSIVE REVIEW
●● What can a series 6 rep sell?
Answer: packaged products, such as mutual funds and annuities;
however, they may NOT sell REITs.
●● When and how long does a firm have to amend/update a U5
Answer: an ongoing obligation to amend Form U5 within 30 days
●● How long does a RR have to complete CE after it's anniversary date
Answer: 120 Days
●● Over what alleged value of a complaint will show up on a U4
Answer: $5,000 or more
●● Over what settled value of a complaint will show up on a U4
Answer: $15,000 or more
●● What is a broker's active military status called and what does it do
,Answer: Special Inactive Status exempts a RR from both the two-year
inactive status limitation and CE requirements
However, the tolling period will terminate 90 days following the
completion of active service
●● What does a RR have to provide its firm for outside business
activities
Answer: Written notice
●● If an MFP is going to conduct trades (for compensation / no
compensation) at another firm, what is needed
Answer: Written approval if compensated, written notice to MFPs firm if
the MFP isn't receiving compensation
●● How often does a RR need to participate in a compliance meeting
Answer: Annually
●● A claim is only eligible for submission to arbitration if the event
occured within the last ____ years
Answer: Six years. After six years, one cannot bring the claim to
arbitration
●● What is the limit for simplified arbitration
Answer: $50,000
, ●● What is the difference between Limited and Durable Power Of
Attorney
Answer: "Limited power of attorney allows a person to buy and sell
securities in a client's account, but it does NOT allow her to withdraw
assets or cash OR act on behalf of the account owner in the event of
mental incompetence or incapacitation.
Durable power of attorney allows a person to buy and sell securities in a
client's account, AND allows her to withdraw assets or cash AND can
act on behalf of the account owner in the event of mental incompetence
or incapacitation."
●● When is durable POA canceled
Answer: Client can cancel it, or immediately upon client's death.
●● What is a Not-Held order
Answer: "A non discretionary trade with three items that must be
specified from a client are action (buy/sell), amount (quantity), and asset
(security).
Day order only, specified in writing"
●● How can a RR share in the gains/losses with a client
Answer: With written approval of both a principal and the client, if it's in
direct proportion to the RR's contribution.
