FINRA Exam Prep 2026/2027: Multiple Choice Practice Test with Answers
| Graded A+
Under SEC regulation S-P, which of the following information must a firm include in its customer
privacy and opt-out notices? - ANSWER the policies to protect the security of nonpublic information
under industry regulations, an initial purchase of $3,000 of common stock in a margin account
requires a cash deposit of - ANSWER $2,000, remember $2000 is the MINIMUM requirement
DPPs provide - ANSWER exposure to non-correlated assets
the primary purpose of a syndicate desk in the context of an equity offering is to - ANSWER build an
order book and allocate the stock
the call provision of a bond stipulates which of the following factors? - ANSWER call date and call
price
under FINRA rules, noncash compensation connected with the sale of variable contracts includes all
of the folllowing items except - ANSWER commissions
no-load mutual funds may have lower expense ratios than load mutual funds for which of the
following reasons? - ANSWER no-load funds are not permitted to charge a 12b-1 fee greater than 25
basis points
when a BD charges a commission on a securities transaction, it has acted as - ANSWER an agent
a savings account at a bank is guaranteed by which of the following entities? - ANSWER FDIC
stability in the value of a debt portfolio is greatest when? - ANSWER maturities of the debt securities
are short
a decline in the GDP must last for at least how many quarters to be considered a recession? -
ANSWER 2 quarters
, which of the following communications with the public is considered misleading? - ANSWER
literature providing 10-year performance information to support predictions of future performance
Roth 401k and Roth individual retirement account plans share which of the following features? -
ANSWER qualified distributions are excluded from federal income tax
insider information if the customer shares them with his RR EXCEPT - ANSWER declared stock
dividends
in the event of a stock split, which of the following entities is required to maintain a record of the
shareholders eligible to receive the additional shares? - ANSWER the transfer agent
which of the following actions violates FINRA rules regarding selling away? - ANSWER engaging in
private securities transactions without written prior consent of the employing BD
under rule 144A, an issuer of restricted stock is permitted to sell to which of the following investors?
- ANSWER QUIBS
blue-sky laws are regulated by which of the following entities? - ANSWER state securities regulators
which of the following outcomes are possible for the writer of a covered call option? - ANSWER Profit
limited and loss limited
which of the following stakeholders has first claim priority in a chapter 11 proceeding? - ANSWER
secured debt holders
which of the following investments are generally traded according to their average life rather than
their stated maturity dates? - ANSWER asset-backed securities
FinCEN accomplished its mission to safeguard the financial system from the abuses of financial crime,
including terrorist financing and money laundering by enforcing - ANSWER the bank secrecy act
an associated person who is NOT a RR is permitted to engage in which of the following activities? -
ANSWER Provide account opening forms to a new customer
| Graded A+
Under SEC regulation S-P, which of the following information must a firm include in its customer
privacy and opt-out notices? - ANSWER the policies to protect the security of nonpublic information
under industry regulations, an initial purchase of $3,000 of common stock in a margin account
requires a cash deposit of - ANSWER $2,000, remember $2000 is the MINIMUM requirement
DPPs provide - ANSWER exposure to non-correlated assets
the primary purpose of a syndicate desk in the context of an equity offering is to - ANSWER build an
order book and allocate the stock
the call provision of a bond stipulates which of the following factors? - ANSWER call date and call
price
under FINRA rules, noncash compensation connected with the sale of variable contracts includes all
of the folllowing items except - ANSWER commissions
no-load mutual funds may have lower expense ratios than load mutual funds for which of the
following reasons? - ANSWER no-load funds are not permitted to charge a 12b-1 fee greater than 25
basis points
when a BD charges a commission on a securities transaction, it has acted as - ANSWER an agent
a savings account at a bank is guaranteed by which of the following entities? - ANSWER FDIC
stability in the value of a debt portfolio is greatest when? - ANSWER maturities of the debt securities
are short
a decline in the GDP must last for at least how many quarters to be considered a recession? -
ANSWER 2 quarters
, which of the following communications with the public is considered misleading? - ANSWER
literature providing 10-year performance information to support predictions of future performance
Roth 401k and Roth individual retirement account plans share which of the following features? -
ANSWER qualified distributions are excluded from federal income tax
insider information if the customer shares them with his RR EXCEPT - ANSWER declared stock
dividends
in the event of a stock split, which of the following entities is required to maintain a record of the
shareholders eligible to receive the additional shares? - ANSWER the transfer agent
which of the following actions violates FINRA rules regarding selling away? - ANSWER engaging in
private securities transactions without written prior consent of the employing BD
under rule 144A, an issuer of restricted stock is permitted to sell to which of the following investors?
- ANSWER QUIBS
blue-sky laws are regulated by which of the following entities? - ANSWER state securities regulators
which of the following outcomes are possible for the writer of a covered call option? - ANSWER Profit
limited and loss limited
which of the following stakeholders has first claim priority in a chapter 11 proceeding? - ANSWER
secured debt holders
which of the following investments are generally traded according to their average life rather than
their stated maturity dates? - ANSWER asset-backed securities
FinCEN accomplished its mission to safeguard the financial system from the abuses of financial crime,
including terrorist financing and money laundering by enforcing - ANSWER the bank secrecy act
an associated person who is NOT a RR is permitted to engage in which of the following activities? -
ANSWER Provide account opening forms to a new customer
