CUSTOMER ACCOUNTS UPDATED ACTUAL EXAM QUESTIONS CORRECT ANSWERS
GRADED A PLUS
Question:
Credit from Bank to Broker.
Answer:
Regulation U
Question:
Call loans made by banks to broker-dealers are secured by: A. fully paid securities held in margin
accounts for customers of the broker-dealer B. partially paid securities held in margin accounts for
customers of the broker-dealer C. fully paid securities held in cash accounts for customers of the
broker-dealer D. any security position held in the broker-dealer's inventory or held in a customer
account.
Answer:
B
Question:
Interest charges on customer debit balances are based on the: A. Discount Rate B. Federal Funds
Rate C. Call Loan Rate D. Prime Rate.
Answer:
C
Question:
A customer has opened a margin account and has signed both the hypothecation agreement and the
loan consent agreement. The brokerage firm can do all of the following with the customer's
securities EXCEPT: A. commingle the customer's securities with those of other customers B. lend
the stock to another customer who wishes to effect a short sale C. commingle the customer's
securities with securities owned by the brokerage firm D. pledge the customer's securities to a bank
, for a loan.
Answer:
C
Question:
The maximum amount of customer securities that can be rehypothecated by a broker is: A. 50 % of
the debit balance B. 70 % of the debit balance C. 100% of the debit balance D. 140% of the debit
balance.
Answer:
D
Question:
A corporation is making a combined primary offering of newly issued shares and secondary offering
of shares held by officers, where both issues are offered through a single prospectus. Which
statement is TRUE about margin rules on this offering? A. Neither the primary nor secondary
offering can be purchased on margin B. Only the primary offering can be purchased on margin C.
Only the secondary offering can be purchased on margin D. Both primary and secondary offerings
can be purchased on margin.
Answer:
A
Question:
Generally, new issues cannot be margined for how many days after issuance? A. 10 DAYS B. 20
DAYS C. 30 DAYS D. 90 DAYS.
Answer:
C
Question:
Which of the following transactions can be performed in a cash account? I Sale "against the box" II
Sale of a covered call III Long sale of a security IV Short sale of a security A. III only B. I and IV C.
GRADED A PLUS
Question:
Credit from Bank to Broker.
Answer:
Regulation U
Question:
Call loans made by banks to broker-dealers are secured by: A. fully paid securities held in margin
accounts for customers of the broker-dealer B. partially paid securities held in margin accounts for
customers of the broker-dealer C. fully paid securities held in cash accounts for customers of the
broker-dealer D. any security position held in the broker-dealer's inventory or held in a customer
account.
Answer:
B
Question:
Interest charges on customer debit balances are based on the: A. Discount Rate B. Federal Funds
Rate C. Call Loan Rate D. Prime Rate.
Answer:
C
Question:
A customer has opened a margin account and has signed both the hypothecation agreement and the
loan consent agreement. The brokerage firm can do all of the following with the customer's
securities EXCEPT: A. commingle the customer's securities with those of other customers B. lend
the stock to another customer who wishes to effect a short sale C. commingle the customer's
securities with securities owned by the brokerage firm D. pledge the customer's securities to a bank
, for a loan.
Answer:
C
Question:
The maximum amount of customer securities that can be rehypothecated by a broker is: A. 50 % of
the debit balance B. 70 % of the debit balance C. 100% of the debit balance D. 140% of the debit
balance.
Answer:
D
Question:
A corporation is making a combined primary offering of newly issued shares and secondary offering
of shares held by officers, where both issues are offered through a single prospectus. Which
statement is TRUE about margin rules on this offering? A. Neither the primary nor secondary
offering can be purchased on margin B. Only the primary offering can be purchased on margin C.
Only the secondary offering can be purchased on margin D. Both primary and secondary offerings
can be purchased on margin.
Answer:
A
Question:
Generally, new issues cannot be margined for how many days after issuance? A. 10 DAYS B. 20
DAYS C. 30 DAYS D. 90 DAYS.
Answer:
C
Question:
Which of the following transactions can be performed in a cash account? I Sale "against the box" II
Sale of a covered call III Long sale of a security IV Short sale of a security A. III only B. I and IV C.
