Series 24
A registered representative is moving to a new broker-dealer. If her customers have filled out the transfer
request forms, the following is true: - correct answer ✔✔The carrying firm is permitted to contact the
customer
If a customer is required to take a RMD from his IRA, what are the requirements surrounding this client's
distribution obligation? - correct answer ✔✔The distribution must be made by April 1 in the year AFTER
the client turns 72 and the customer is permitted to remove cash or securities. If securities are moved,
cost basis is stepped up to reflect as if securities were sold, new cost basis is established.
A transaction in a TRACE-eligible security is executed at 6:10 a.m. The trade must be reported to FINRA: -
correct answer ✔✔No later than 15 minutes after the TRACE system opens.
A broker-dealer intends to hire a salesperson who has never worked for a member firm. During the
interview, the candidate discloses that he was arrested and charged with a misdemeanor for forgery. -
correct answer ✔✔This must be disclosed on the person's Form U4.
What type of offering will permit a US public company to quickly raise an unlimited amount of capital
from an unlimited number of both retail and institutional investors without registering the securities
with the SEC? - correct answer ✔✔A Regulation S offering. A regulation A offering limits the dollar
amount of securities that may be raised by the issuer to $75 million.
SIPC protection is NOT provided in this instance: - correct answer ✔✔Securities registered in the name
of the customer when they are held by the customer
What types of transactions would NOT be reported on the Consolidated Tape? - correct answer ✔✔A
private placement in a stock listed on the NYSE
Who is permitted to be the emergency contact for a member firm that has only one associated person? -
correct answer ✔✔The associated person and an employee of another firm who has knowledge of the
member firm's operations (typically the firm's attorney, accountant, or a clearing firm contact). FINRA
employees cannot serve as a member firm's emergency contact.
, An investor who is a registered investment adviser wants to place a limit order to sell 5,000 shares of a
Nasdaq stock at 26.75. The broker-dealer has disclosed to the client that it will accept the order but may
trade ahead of it. The following is true: - correct answer ✔✔If the client accepts the conditions, the
order does not need to be protected under the Manning Rule because the value of the trade is greater
than $100,000
Your firm is advising Industrial Paper in a proposed acquisition of Corrugated Box. The company intends
to issue debt to finance the purchase, and is filing Form 8-K to announce the proposed acquisition. The
following is NOT true regarding the disclosure documents filed in conjunction with the deal: - correct
answer ✔✔If your firm renders a fairness opinion regarding the terms of the acquisition, it may not
undermine the new debt offering of Industrial Paper
A broker-dealer that sells mutual funds is required to submit payments received from customers to the
investment company no later than: - correct answer ✔✔3 business days after the receipt of the
customer's order
What is the day-trading buying power of an account that has a long market value of $170,000 and a
debit balance of $90,000? - correct answer ✔✔$150,000. Day-trading buying power is limited to 4x the
trader's maintenance margin excess, as of close of previous day. The SRO maintenance requirement is
25% of the long market value ($42,500). Therefore, the excess maintenance requirement is $80,000 less
$42,500 or $37,500. The day-trading buying power is 4 x $37,500 which equals $150,000.
Who may suspend or expel a member firm from FINRA membership? - correct answer ✔✔Both a
hearing panel and the National Adjudicatory Council may suspend or expel a FINRA member firm.
The term deficiency letter is associated with a: - correct answer ✔✔Registration statement for an
offering that will be registered with the SEC
According to FINRA's Corporate Financing Rule, underwriting agreements need not be filed in what type
of offering? - correct answer ✔✔Restricted securities sold under Regulation D
What is an appropriate account title for a custodial account? - correct answer ✔✔[Custodian Name] C/F
[Minor Name] under [appropriate state]
A registered representative is moving to a new broker-dealer. If her customers have filled out the transfer
request forms, the following is true: - correct answer ✔✔The carrying firm is permitted to contact the
customer
If a customer is required to take a RMD from his IRA, what are the requirements surrounding this client's
distribution obligation? - correct answer ✔✔The distribution must be made by April 1 in the year AFTER
the client turns 72 and the customer is permitted to remove cash or securities. If securities are moved,
cost basis is stepped up to reflect as if securities were sold, new cost basis is established.
A transaction in a TRACE-eligible security is executed at 6:10 a.m. The trade must be reported to FINRA: -
correct answer ✔✔No later than 15 minutes after the TRACE system opens.
A broker-dealer intends to hire a salesperson who has never worked for a member firm. During the
interview, the candidate discloses that he was arrested and charged with a misdemeanor for forgery. -
correct answer ✔✔This must be disclosed on the person's Form U4.
What type of offering will permit a US public company to quickly raise an unlimited amount of capital
from an unlimited number of both retail and institutional investors without registering the securities
with the SEC? - correct answer ✔✔A Regulation S offering. A regulation A offering limits the dollar
amount of securities that may be raised by the issuer to $75 million.
SIPC protection is NOT provided in this instance: - correct answer ✔✔Securities registered in the name
of the customer when they are held by the customer
What types of transactions would NOT be reported on the Consolidated Tape? - correct answer ✔✔A
private placement in a stock listed on the NYSE
Who is permitted to be the emergency contact for a member firm that has only one associated person? -
correct answer ✔✔The associated person and an employee of another firm who has knowledge of the
member firm's operations (typically the firm's attorney, accountant, or a clearing firm contact). FINRA
employees cannot serve as a member firm's emergency contact.
, An investor who is a registered investment adviser wants to place a limit order to sell 5,000 shares of a
Nasdaq stock at 26.75. The broker-dealer has disclosed to the client that it will accept the order but may
trade ahead of it. The following is true: - correct answer ✔✔If the client accepts the conditions, the
order does not need to be protected under the Manning Rule because the value of the trade is greater
than $100,000
Your firm is advising Industrial Paper in a proposed acquisition of Corrugated Box. The company intends
to issue debt to finance the purchase, and is filing Form 8-K to announce the proposed acquisition. The
following is NOT true regarding the disclosure documents filed in conjunction with the deal: - correct
answer ✔✔If your firm renders a fairness opinion regarding the terms of the acquisition, it may not
undermine the new debt offering of Industrial Paper
A broker-dealer that sells mutual funds is required to submit payments received from customers to the
investment company no later than: - correct answer ✔✔3 business days after the receipt of the
customer's order
What is the day-trading buying power of an account that has a long market value of $170,000 and a
debit balance of $90,000? - correct answer ✔✔$150,000. Day-trading buying power is limited to 4x the
trader's maintenance margin excess, as of close of previous day. The SRO maintenance requirement is
25% of the long market value ($42,500). Therefore, the excess maintenance requirement is $80,000 less
$42,500 or $37,500. The day-trading buying power is 4 x $37,500 which equals $150,000.
Who may suspend or expel a member firm from FINRA membership? - correct answer ✔✔Both a
hearing panel and the National Adjudicatory Council may suspend or expel a FINRA member firm.
The term deficiency letter is associated with a: - correct answer ✔✔Registration statement for an
offering that will be registered with the SEC
According to FINRA's Corporate Financing Rule, underwriting agreements need not be filed in what type
of offering? - correct answer ✔✔Restricted securities sold under Regulation D
What is an appropriate account title for a custodial account? - correct answer ✔✔[Custodian Name] C/F
[Minor Name] under [appropriate state]
