Series 24 Practice Final Questions Part 1
A firm's investment banking department needs the assistance of an analyst from the research
department. This would involve giving the analyst access to recordkeeping & support systems that must
only be accessed from within their investment banking department. How can the analyst be give this
access without violating FINRA's information barrier rules? - correct answer ✔✔By temporarily
reassigning the analyst to the investment banking department
Which of the following are needed to qualify for "simplified arbitration?"
A.)No more than $25k in disputed damages
B.)No more than $50k in disputed damages
C.)Involves fewer than 5 securities
D.)Involves fewer than 10 securities - correct answer ✔✔B.)No more than $50k in disputed damages
A member firm is a MM in XYZZ stock. Customer A has placed an order with the member firm to sell 3k
shares of XYZZ stock @$10.02. After the order is received, the firm gets an order for Customer B to buy
10k XYZZ @ $10.10. To comply with FINRA order handling rules & also maximize the member firm's
profit , the Customer B order to buy 10k shares would be filled: - correct answer ✔✔Sell 3k shares for
Customer A at $10.10; Sell 7k shares from the firm's inventory account at $10.10
(Customer A limit order must be protected & filled first prior to filling an order for the firm's account. So
the Customer A limit order to sell at $10.02 must be filled at the customer limit (or better) BC there is a
buyer Customer B who came later at $10.10, this is reflective of the current market & Customer A order
must be filled at the better price, $10.10. Then the member firm can fill the balance of the customer buy
order from it's inventory account at the same $10.10)
Under FINRA rules covering "net basis" transactions, retail customers - correct answer ✔✔Must give
written consent on an order-by-order basis prior to executing a transaction on a "net basis"
(Most often demanded by sophisticated institutions. The member firm agrees to sell the institution a
block of stock at a fixed price, with no additional mark-up or commissions)
, A member firm has outsourced some of it's business support activities to a 3rd party vendor. Under
FINRA rules - correct answer ✔✔The relationship with the vendors used must be included in the firm's
Business Continuity Plan
All of the following statements are true regarding offerings made under Rule 504 Reg D EXCEPT
A.)The exemption is available for companies that sell no more than $10 million in securities within 12
months
B.)The exemption is not available to blank check companies
C.) Purchasers of the offering receive restricted securities
D.) The issuer can solicit or advertise the securities to the public - correct answer ✔✔D.) The issuer can
solicit or advertise the securities to the public
(Rule 506 offerings are made solely to accredited investors may be advertised)
When comparing Crowdfunding Offerings to At The Market (ATM) Offerings, which statement is true? -
correct answer ✔✔Crowdfunding offerings are subject to dollar offering limitations, while At The Market
Offerings have no dollar offering limitations
(Crowdfunding limit=$5,000,000)
ATM Offering - correct answer ✔✔Rule 415 allows seasoned issuers(Min $75million & public company
for at least 1 year) to file a shelf registration with the SEC good for a 3-year time window.
Crowdfunding Offering - correct answer ✔✔is an SEC Exemption from registration for start up companies
that seek funding from a group of small investors limited to raising up to $5 million in a 12 month period
Which statement is TRUE about quotes entered for OTC stocks - correct answer ✔✔BW may be placed
by a dealer seeking to sell stock
Unfirm quotes (Both 2-Sided & 1-sided quotes are permitted) May place OW (Offers Wanted as well)
A firm's investment banking department needs the assistance of an analyst from the research
department. This would involve giving the analyst access to recordkeeping & support systems that must
only be accessed from within their investment banking department. How can the analyst be give this
access without violating FINRA's information barrier rules? - correct answer ✔✔By temporarily
reassigning the analyst to the investment banking department
Which of the following are needed to qualify for "simplified arbitration?"
A.)No more than $25k in disputed damages
B.)No more than $50k in disputed damages
C.)Involves fewer than 5 securities
D.)Involves fewer than 10 securities - correct answer ✔✔B.)No more than $50k in disputed damages
A member firm is a MM in XYZZ stock. Customer A has placed an order with the member firm to sell 3k
shares of XYZZ stock @$10.02. After the order is received, the firm gets an order for Customer B to buy
10k XYZZ @ $10.10. To comply with FINRA order handling rules & also maximize the member firm's
profit , the Customer B order to buy 10k shares would be filled: - correct answer ✔✔Sell 3k shares for
Customer A at $10.10; Sell 7k shares from the firm's inventory account at $10.10
(Customer A limit order must be protected & filled first prior to filling an order for the firm's account. So
the Customer A limit order to sell at $10.02 must be filled at the customer limit (or better) BC there is a
buyer Customer B who came later at $10.10, this is reflective of the current market & Customer A order
must be filled at the better price, $10.10. Then the member firm can fill the balance of the customer buy
order from it's inventory account at the same $10.10)
Under FINRA rules covering "net basis" transactions, retail customers - correct answer ✔✔Must give
written consent on an order-by-order basis prior to executing a transaction on a "net basis"
(Most often demanded by sophisticated institutions. The member firm agrees to sell the institution a
block of stock at a fixed price, with no additional mark-up or commissions)
, A member firm has outsourced some of it's business support activities to a 3rd party vendor. Under
FINRA rules - correct answer ✔✔The relationship with the vendors used must be included in the firm's
Business Continuity Plan
All of the following statements are true regarding offerings made under Rule 504 Reg D EXCEPT
A.)The exemption is available for companies that sell no more than $10 million in securities within 12
months
B.)The exemption is not available to blank check companies
C.) Purchasers of the offering receive restricted securities
D.) The issuer can solicit or advertise the securities to the public - correct answer ✔✔D.) The issuer can
solicit or advertise the securities to the public
(Rule 506 offerings are made solely to accredited investors may be advertised)
When comparing Crowdfunding Offerings to At The Market (ATM) Offerings, which statement is true? -
correct answer ✔✔Crowdfunding offerings are subject to dollar offering limitations, while At The Market
Offerings have no dollar offering limitations
(Crowdfunding limit=$5,000,000)
ATM Offering - correct answer ✔✔Rule 415 allows seasoned issuers(Min $75million & public company
for at least 1 year) to file a shelf registration with the SEC good for a 3-year time window.
Crowdfunding Offering - correct answer ✔✔is an SEC Exemption from registration for start up companies
that seek funding from a group of small investors limited to raising up to $5 million in a 12 month period
Which statement is TRUE about quotes entered for OTC stocks - correct answer ✔✔BW may be placed
by a dealer seeking to sell stock
Unfirm quotes (Both 2-Sided & 1-sided quotes are permitted) May place OW (Offers Wanted as well)
