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
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
