Ser24 index cards ii & iii.txt

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Ser24 index cards ii & iii.txt
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Ser 24 vol II
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Ser 24 vol. II
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  1. ID#: 30715
    Which of the following statements regarding advertising prepared by an established member firm are TRUE?
    I) Options advertisements must be filed with FINRA at least ten days before first use
    II) Options advertisements must be filed with FINRA within ten days of first use
    III) Mutual fund advertisements must be filed with FINRA at least ten days before first use
    IV) Mutual fund advertisements must be filed with FINRA within ten days of first use
    A) I and IV
    B) I and III
    C) II and III
    D) II and IV
    • ID#: 30715
    • The correct answer was A
    • Options advertisements must be filed with FINRAs Advertising Regulation Department by all firms at least ten days before first use Mutual fund advertisements must be filed within ten days of first use if the filer is an established firm
  2. ID#: 30442
    Under the Code of Arbitration, a respondent must answer within how many days after receiving a statement of claim?
    A) 15
    B) 45
    C) 20
    D) 30
    • ID#: 30442
    • The correct answer was B
    • After receiving a statement of claim, a respondent has 45 calendar days to respond to both the director of arbitration and the claimant
  3. ID#: 30208
    The maximum dollar limit for simplified arbitration procedures between securities industry persons is:
    A) $5,000
    B) $2,500
    C) $25,000
    D) $10,000
    • ID#: 30208
    • The correct answer was C
    • Simplified arbitration procedures are allowed and encouraged for disputes with a claim value of $25,000 or less
  4. ID#: 31351
    Members must maintain a record of a callers request not to receive further telemarketing calls and to honor that firm-specific, Do-Not-Call request for a period of:
    A) Nine years
    B) Three years
    C) Six years
    D) Five years
    • ID#: 31351
    • The correct answer was D
    • Registrations in the National Do-Not-Call list are maintained for five years A consumer may reregister her telephone number at any time Such reregistration begins another five-year registration period FINRA rules on a firm-specific, Do-Not-Call list mirrors this five-year rule
  5. ID#: 205981
    One of the representatives in your firm has prepared and wishes to send a letter to all of his clients, about 50 in all, describing a strategy he believes is appropriate given recent market turbulence Which statement is true?
    A) Approval by a principal is required in advance of first use
    B) The letter requires prompt review by a principal
    C) A copy must be filed with FINRA within 10 days of first use
    D) The letter may not be sent
    • ID#: 205981
    • The correct answer was A
    • In this instance, the letter is considered sales literature (25 or more existing clients in a 30 calendar day period), which requires principal approval prior to first use
  6. ID#: 30706
    If a registered representative voluntarily leaves the industry, which of the following statements are TRUE?
    I) The registered representative must reaffiliate within one year of termination to avoid retaking the exam
    II) The registered representative must reaffiliate within two years of termination to avoid retaking the exam
    III) FINRA retains jurisdiction over the registered representative for one year from the termination date
    IV) FINRA retains jurisdiction over the registered representative for two years from the termination date
    A) I and III
    B) II and IV
    C) I and IV
    D) II and III
    • ID#: 30706
    • The correct answer was B
    • For two years after a registered representative leaves the industry, reaffiliation with a member firm can be done without retaking the licensing exam In addition, FINRA retains jurisdiction for the two-year period following termination Thus, if the person becomes the subject of an arbitration hearing, on the record interview or disciplinary action the person is still subject to FINRA rules The SEC on the other hand may impose sanctions for criminal activity such as fraud for as long as the law permits
  7. ID#: 31317
    A member firm that plans to offer customers an investment analysis tool must provide FINRA access to the tool:
    A) only if there is an arbitration case related to its use B) ten days prior to first use
    C) within ten days of first use
    D) only if there is a Code of Procedure hearing related to its use
    • ID#: 31317
    • The correct answer was C
    • If a firm plans to offer an investment analysis tool to its customers, it must provide FINRA access to the tool within ten days of first use Furthermore, the firm must describe the criteria and methodology used, including the tools limitations and key assumptions; explain that results may vary with each use and over time; describe, if applicable, the universe of investments considered in the analysis; and display the caveat that projections are not guarantees of results
  8. ID#: 31367
    To avoid a long commute to work, a representative wants to occasionally conduct securities business at your firms insurance office, which is much closer to his home To avoid having to register your insurance office as a branch, the representative must effect fewer than:
    A) 100 securities transactions annually
    B) 50 securities transactions annually
    C) 75 securities transactions annually
    D) 25 securities transactions annually
    • ID#: 31367
    • The correct answer was D
    • Any location used primarily for nonsecurities business (eg insurance sales) and from which fewer than 25 securities transactions are effected annually is excluded from the definition of a branch office
  9. ID#: 31253
    A member firm fails to pay an arbitration award within the prescribed time frame FINRA may revoke the members registration after giving:
    A) 15 days written notice
    B) 10 days written notice
    C) 20 days written notice
    D) 30 days written notice
    • ID#: 31253
    • The correct answer was A
    • Arbitration awards must be paid within 30 days of decision date If a firm fails to pay within this time period, FINRA may suspend or revoke the firms membership after giving 15 days written notice
  10. ID#: 31083
    Which of the following is considered sales literature?
    A) Independently prepared reprints
    B) A group email sent to 25 prospective retail customers in any 30-calendar-day period
    C) A group email sent to ten existing retail customers in any 30-calendar-day period
    D) Billboards
    • ID#: 31083
    • The correct answer was B
    • The definition of customer correspondence includes form letters and group emails sent to fewer than 25 prospective or existing retail customers in any 30-calendar-day period Form letters and group emails sent to 25 or more existing or prospective retail customers in any 30-calendar-day period are sales literature Billboards are public media and as such are considered to be advertising Independently prepared reprints are a separate category of communications with the public
  11. ID#: 30433
    Under the Code of Procedure, if a FINRA member receives a formal complaint from the Department of Enforcement, the member must file an answer within how many days?
    A) 15
    B) 10
    C) 25
    D) 30
    • ID#: 30433
    • The correct answer was C
    • After receiving a complaint from the Department of Enforcement, a respondent has 25 days to file a response
  12. ID#: 30803
    To terminate 12b-1 charges, a mutual fund must obtain a majority vote of:
    I) shareholders
    II) directors
    III) outside directors
    A) I, II and III
    B) I and II
    C) II and III
    D) I and III
    • ID#: 30803
    • The correct answer was D
    • To terminate 12b-1 charges, a fund must have a majority vote of both the shareholders and outside directors
  13. ID#: 30438
    A late filing fee will be assessed against a member if Form U-5 is not filed within how many days of a termination date?
    A) 30
    B) 10
    C) 20
    D) 45
    • ID#: 30438
    • The correct answer was A
    • If Form U-5 is not filed with FINRA within 30 days of a termination date, a late filing fee will be assessed
  14. ID#: 31447
    Under FINRA rules, which of the following are considered advertising?
    I) A principal writes a weekly article on investing, which is syndicated in newspapers throughout the country
    II) A research analyst appears on CNBC to talk about his latest equity recommendation
    III) Copy written by a principal for use as a college recruiting tool
    IV) Copy written by a principal for use in a TV commercial describing the firms services
    A) I and III
    B) I and IV
    C) II and III
    D) II and IV
    • ID#: 31447
    • The correct answer was B
    • Copy intended for use in public media such as newspapers, magazines, radio, television, and so forth is considered advertising Sales literature, on the other hand, is a form of targeted communication not using public media For example, copy prepared as a recruiting tool is targeted to a select group A research analyst speaking about his latest equity recommendations is a separate form of public communication termed a public appearance
  15. ID#: 30623
    If an individual is convicted of a money- or securities-related fraud, FINRA may rightfully deny registration to that individual for how many years from the conviction date?
    A) Two years
    B) One year
    C) Ten years
    D) Five years
    • ID#: 30623
    • The correct answer was C
    • Conviction within the past ten years for any felony or securities-/money-related misdemeanor is a statutory disqualification of an applicant for registration with a FINRA member firm
  16. ID#: 30982
    Members must immediately file notice with FINRA regarding a complaint against which of the following?
    I) Registered representative, if settled for $10,000
    II) Registered representative, if settled for $20,000
    III) Member, if settled for $20,000
    IV) Member, if settled for $30,000
    A) III and IV
    B) I and II
    C) II and III
    D) I and IV
    • ID#: 30982
    • The correct answer was D
    • Members must file notice with FINRA to report securities- or commodities-related judgments, awards, or settlements of $15,000 or more against individuals, or $25,000 or more against member firms
  17. ID#: 205975
    A registered person has been in the securities business for 6 years This person will be subject to the Regulatory Element of Continuing Education
    A) in 2 more years
    B) next year
    C) every 2 years
    D) this year
    • ID#: 205975
    • The correct answer was A
    • The Regulatory Element of CE must be completed within 120 days of a persons second registration anniversary and every 3 years thereafter (ie, within 120 days of a persons 5th, 8th, 11th registration anniversary etc) Therefore, the next required date is in 2 more years
  18. ID#: 30658
    An associated person leaves Member Firm #1 and four months later is hired by Member Firm #2 A principal at Member Firm #2 asks for a copy of Form U-5 filed by the former employer Under FINRA rules, the new employee must provide a copy within how many business days of the request?
    A) five days
    B) two days
    C) seven days
    D) ten days
    • ID#: 30658
    • The correct answer was B
    • Under FINRA rules, if a new employer requests a copy of Form U-5 from a new employee, he must provide it within two business days
  19. ID#: 30437
    Under FINRA rules, a registered representative must complete the regulatory element of continuing education within how many days of a registration anniversary date?
    A) 60
    B) 30
    C) 120
    D) 90
    • ID#: 30437
    • The correct answer was C
    • The regulatory element requires that all registered persons complete a computer-based training session within 120 days of their second registration anniversary and every third anniversary thereafter
  20. ID#: 30429
    Information on customer complaints must be electronically filed with FINRA:
    A) semiannually
    B) weekly
    C) monthly
    D) quarterly
    • ID#: 30429
    • The correct answer was D
    • FINRA rules require members to electronically file information on customer complaints within 15 days of the end of each calendar quarter If the complaint involves allegations of theft, misappropriation of funds or securities, or forgery, the member must immediately (within ten business days) report it to FINRA
  21. ID#: 31492
    Under FINRA rules, a firm with at least 20 registered persons will be subject to the taping rule if at least what percentage of its registered persons have been employed by disciplined firms within the past three years?
    A) 15%
    B) 10%
    C) 20%
    D) 25%
    • ID#: 31492
    • The correct answer was C
    • A firm with 20 or more registered persons will be subject to the taping rule if 20% or more of these persons have been employed by disciplined firms within the past three years
  22. ID#: 30894
    If an employee of an NYSE member wants to take a second job, which of the following statements is TRUE?
    A) Prior approval of the member firm is required
    B) Prior approval of the NYSE is required
    C) Prior approval of both the NYSE and the member firm is required
    D) No approval is required
    • ID#: 30894
    • The correct answer was D
    • If an employee wants to take a second job that person must give prior notification to the member
  23. ID#: 31059
    If a member firm fails to pay a monetary award resulting from an arbitration decision, within 30 days of the decision date, which of the following statements will be TRUE?
    I) FINRA can immediately suspend the firms membership
    II) FINRA can suspend the firms membership only after giving 15 days written notice
    III) FINRA can immediately revoke the firms membership
    IV) FINRA can revoke the firms membership only after giving 15 days written notice
    A) I and IV
    B) I and III
    C) II and IV
    D) II and III
    • ID#: 31059
    • The correct answer was C
    • After giving 15 days written notice, FINRA may suspend or revoke the membership of any member in arrears in the payment of fees, dues, assessments, or other charges This includes failure to honor an arbitration award
  24. ID#: 31246
    If a member firm is notified by FINRA that it must begin tape-recording the phone calls of its registered representatives, it must do so within how many days of notification?
    A) 30
    B) 60
    C) 45
    D) 90
    • ID#: 31246
    • The correct answer was B
    • A firm has 60 days to secure the equipment and begin recording
  25. ID#: 31087
    Advertisements do not have to be prefiled with FINRA if they relate to which of the following?
    A) Direct participation programs (DPPs)
    B) Options
    C) Security futures
    D) CMOs
    • ID#: 31087
    • The correct answer was A
    • All advertising relating to options, CMOs, and security futures (single stock futures) must be filed with FINRA at least ten days before first use Advertising for DPPs must be filed with FINRA within ten days of first use
  26. ID#: 30301
    Disciplinary actions levied by FINRA under the Code of Procedure against a member or an associated person charged with rule violations take effect:
    A) immediately
    B) no sooner than 30 calendar days from the decision date
    C) no sooner than ten business days from the decision date
    D) no sooner than 45 calendar days from the decision date
    • ID#: 30301
    • The correct answer was B
    • Decisions reached by the Department of Enforcement become final 30 calendar days after formal issuance, when time has run out for filing an appeal and setting possible redress motion in action Under the Code of Procedure, the respondent has 25 days from the issue date of the Department of Enforcements formal decision to file an appeal with the National Adjudicatory Council This 25-day period runs concurrently with the 30-calendar-day waiting period for the Department of Enforcements decision to become final
  27. ID#: 30444
    A member firm files Form U-5 with FINRA for a former employee Two years later, the member learns facts that show the information filed to be inaccurate Under FINRA rules, the member must file an amended Form U-5 within:
    A) 60 days
    B) 30 days only if the former employee has reassociated with another member
    C) 30 days
    D) 60 days only if the former employee has reassociated with another member
    • ID#: 30444
    • The correct answer was C
    • If a member learns facts that show a Form U-5 filing to be inaccurate, the member must file an amended form within 30 days
  28. ID#: 31192
    The SEC defines a research report as a client communication that analyzes individual securities distributed to at least how many persons?
    A) 100
    B) 25
    C) 50
    D) 15
    • ID#: 31192
    • The correct answer was D
    • Under Regulation AC, an analysis of individual securities prepared for a specific person or a limited group of fewer than 15 persons is not considered a research report
  29. ID#: 30326
    For how long must a FINRA member firm keep a record of written customer complaints?
    A) six years
    B) one year
    C) four years
    D) Lifetime of the customers account
    • ID#: 30326
    • The correct answer was B
    • According to FINRA Rule 4513 that went into effect December 2011 written customer complaints and any correspondence related to the complaints must be kept for four years
  30. ID#: 31335
    Copies of message traffic resulting from the use of instant messaging must be retained for:
    A) one years
    B) three year
    C) two years
    D) six years
    • ID#: 31335
    • The correct answer was B
    • Like other forms of communication with the public, copies of IM traffic must be retained for three years Members are permitted to use IM as long as they have software in place to monitor, capture, and retrieve message traffic
  31. ID#: 30213
    Which of the following forms of written communication must a principal approve before use?
    A) Letter sent this month to 50 prospective customers offering advice about a stock
    B) Letter to a customer confirming an annual account review appointment
    C) Interoffice memorandum
    D) Preliminary prospectus
    • ID#: 30213
    • The correct answer was A
    • Form letters containing promotional material sent to more than 25 prospective retail customers within any 30-calendar-day period must be approved by a principal before use Form letters sent to fewer than 25 prospective or existing retail clients (within a 30-day period) are considered group correspondence, which, like other correspondence, does not need prior approval, but it is subject to subsequent review
  32. ID#: 30820
    Which of the following statements regarding the Code of Arbitration are TRUE?
    I) Simplified arbitration is available for claims of $50,000 or less
    II) Simplified arbitration is available for claims of $25,000 or less
    III) The statute of limitations for filing a claim is three years from the event
    IV) The statute of limitations for filing a claim is six years from the event
    A) II and IV
    B) I and III
    C) I and IV
    D) II and III
    • ID#: 30820
    • The correct answer was A
    • Simplified arbitration is available only for claims of $25,000 or less The statute of limitations for filing a claim is six years from the event giving rise to the claim
  33. ID#: 31197
    Branch offices that supervise one or more locations must be inspected:
    A) periodically
    B) at least annually
    C) at least once every three years
    D) at intervals determined by the firm
    • ID#: 31197
    • The correct answer was B
    • Supervising branch offices, like OSJs, must be inspected at least annually
  34. ID#: 30842
    A member firm that is required to monitor the telemarketing of its registered representatives must provide written reports on its review of the recordings to FINRA:
    A) monthly
    B) weekly
    C) quarterly
    D) semiannually
    • ID#: 30842
    • The correct answer was C
    • Reports to FINRA on telemarketing supervision must be made quarterly However, if a member firm is required to monitor telephone conversations, it must do so for all of its representatives, not just representatives from disciplined firms
  35. ID#: 30656
    An established member firm must prefile which of the following advertisements?
    I) An investment company piece that includes a ranking prepared by an independent entity
    II) An investment company piece that includes a ranking prepared by the member
    III) Recruitment advertising
    IV) An investment company piece that contains bond volatility ratings
    A) III and IV
    B) I and II
    C) I and III
    D) II and IV
    • ID#: 30656
    • The correct answer was D
    • Generally, investment company advertisements must be filed by established members within ten days of first use (postfiling) However, if the piece contains a ranking prepared by the member, or if it contains bond volatility ratings, it must be filed ten days before first use (prefiling)
  36. ID#: 31195
    A customer writes to your office and asks you to hold his mail because he will be traveling throughout Europe for the next four months Under FINRA rules, your firm:
    A) may hold his mail for three months
    B) must continue to send statements and confirmations
    C) may hold his mail for two months
    D) must comply with his request
    • ID#: 31195
    • The correct answer was A
    • Under FINRA rules, customer mail can be held for up to two months if the customer is traveling domestically, and for up to three months if traveling abroad
  37. ID#: 31174
    You receive a signed A-CAT Form from a prospective customer who wishes to transfer his account to your firm Under FINRA rules, your firm must forward the form to the carrying member:
    A) within one business day
    B) immediately
    C) within two business days
    D) within three business days
    • ID#: 31174
    • The correct answer was B
    • FINRA rules require that you immediately forward the A-CAT Form to the firm currently carrying the account
  38. ID#: 30249
    A supervising officer or partner must inspect each office of supervisory jurisdiction (OSJ) at least:
    A) annually.
    B) monthly.
    C) quarterly.
    D) semiannually.
    • ID#: 30249
    • The correct answer was A.
    • Each OSJ must be inspected at least once a year.
  39. ID#: 31221
    A registered representative works at a branch office that has no satellite offices under supervision. This office must be inspected:
    I. at least annually.
    II. at least once every three years.
    III. by a supervisor not directly involved in the branch's operations.
    IV. by the resident branch office manager.
    A) I and III.
    B) II and III.
    C) I and IV.
    D) II and IV.
    • ID#: 31221
    • The correct answer was b
    • Nonsupervisory branch offices must be inspected at least once every three years by an arm's-length supervisor.
  40. ID#: 30435
    Under MSRB Rule G-37, restrictions on municipal securities business due to political contributions include which of the following?
    I. Competitive offerings.
    II. Negotiated offerings.
    III. Financial advisory work.
    A) I and III.
    B) I and II.
    C) II and III.
    D) I, II and III.
    • ID#: 30435
    • The correct answer was c
    • MSRB Rule G-37 deals with negotiated offerings and financial advisory work. The rule prohibits municipal firms from engaging in municipal securities business with an issuer for two years after any political contribution is made to an official of that issuer by the firm. It does not affect competitive offerings in which a firm is chosen as an underwriter based on lowest interest cost.
  41. ID#: 31012
    A municipal finance professional contributes $250 in support of the primary election of a municipal official, who subsequently wins the primary. If the MFP was entitled to vote for this official, which of the following statements are TRUE?
    I. The MFP may contribute an additional $250 to the general election of the official with no impact on the firm's underwriting business.
    II. The firm will be barred from underwriting the municipality's issues if the MFP contributes an additional $250 for the general election.
    III. The firm may contribute $250 to the general election of the official with no impact on the firm's underwriting business.
    IV. The firm will be barred from underwriting the municipality's issues if it contributes $250 or less to the general election.
    A) II and III.
    B) I and III.
    C) I and IV.
    D) II and IV.
    • ID#: 31012
    • The correct answer was c.
    • Rule G-37 allows $250 per election, meaning the MFP may contribute an additional $250 for the general election. A firm's contribution to the election of a municipal official will always trigger a two-year bar from the municipality's underwriting activity. The $250 de minimis contribution is a safe harbor available only to MFPs.
  42. ID#: 205790
    Your firm plans to publish a mutual fund advertisement that contains bond fund volatility ratings. Which statements are true?
    I. The ad must be filed with FINRA at least 10 days prior to first use.
    II. The ad must be filed with FINRA within 10 days of first use.
    III. Copy of the ad must be retained for 3 years from first use.
    IV. Copy of the ad must be retained for 3 years from last use.
    A) I and IV
    B) I and III
    C) II and III
    D) II and IV
    • ID#: 205790
    • The correct answer was A.
    • Any ad which contains bond fund volatility ratings must be pre-filed with FINRA. Also, advertising copy must be retained for 3 years after last use.
  43. ID#: 205559
    • The correct answer was b
    • As the former Treasurer is out of office and is no longer an issuer official, Rule G-37 does not apply. Therefore, the MFP may contribute as much as election laws permit.
  44. ID#: 30210
    Under the Code of Arbitration Procedure, how much time does a client have to submit a claim against a registered representative or member firm?
    A) one year.
    B) six months.
    C) six years.
    D) ten years.
    • ID#: 30210
    • The correct answer was c
    • Under the Code of Arbitration Procedure, a dispute or claim is eligible for submission to arbitration up to six years after the date of the dispute's occurrence
  45. ID#: 30209
    If not appealed to the National Adjudicatory Council, Department of Enforcement findings under the Code of Procedure, other than barring and expulsion, become effective:
    A) no earlier than ten days from the date of the decision.
    B) immediately.
    C) only after SEC review.
    D) no earlier than 30 days from the date of the decision.
    • ID#: 30209
    • The correct answer was d
    • If they are not appealed, Department of Enforcement decisions become final no earlier than 30 days after the written decision is handed down. Appeals must be made within 25 days of the decision date. The exceptions are barring and expulsion, which take effect immediately.
  46. ID#: 205789
    Under the Code of Procedure, a respondent has 25 days to respond to a complaint from the Department of Enforcement. If the respondent does not answer within 25 days, the department will send a second notice requiring an answer within
    A) 14 days.
    B) 20 days.
    C) 10 days.
    D) 7 days.
    • ID#: 205789
    • The correct answer was A.
    • A second notice requires a response within 14 days. The notice states that failure to reply allows the hearing officer to enter a default decision (guilty as charged).
  47. ID#: 31088
    A senior officer of a member firm must attest to FINRA that the firm is in compliance with the research analyst conflict of interest rules by what date each year?
    A) Oct 1.
    B) Apr 1.
    C) July 1.
    D) Jan 1.
    • ID#: 31088
    • The correct answer was b
    • By April 1 of each year, each member firm must attest to FINRA that it has adopted and implemented procedures to be in compliance with the research analyst conflict of interest rules.
  48. ID#: 31353
    Under FINRA rules, a member firm may contact which of the following persons, each of whom is on the National Do-Not-Call list?
    I. The person making the call has a personal relationship with the recipient of the call.
    II. The person has contacted the member to inquire about its services within the three months preceding the call.
    III. The person to be contacted transferred his account within the 18 months preceding the call.
    IV. The member has obtained the person's prior written consent.
    A) I and IV.
    B) I and III.
    C) I, II, III and IV.
    D) II and III.
    • ID#: 31353
    • The correct answer was c
    • Members may not contact persons on the national list with three exceptions: the member has an established relationship with the recipient of the call, the member has obtained the person's prior written consent, and the member has an established business relationship with the person to be contacted. An established business relationship exists if the person to be contacted had an account with the member within the 18 months preceding the call or contacted the member regarding its products or services within the preceding three months.
  49. ID#: 30450
    Under FINRA rules, routine amendments to Form U-4 must be made within how many days of any change?
    A) 60.
    B) 15.
    C) 45.
    D) 30.
    • ID#: 30450
    • The correct answer was d
    • Routine amendments to Form U-4 must be made within 30 days of any change. If the change is not routine (i.e., it might affect a firm's membership), the filing must be done within ten days.
  50. ID#: 31340
    Under the Code of Procedure, a prehearing conference must be held within how many days of receipt of the respondent's answer to the complaint?
    A) 21.
    B) 7.
    C) 14.
    D) 28.
    • ID#: 31340
    • The correct answer was A.
    • A prehearing conference must be held within 21 days of the respondent's answer.
  51. ID#: 30430
    If a member wishes to appeal an adverse decision in a Code of Procedure hearing, the member first must appeal to the National Adjudicatory Council within how many days of the decision date?
    A) 40.
    B) 30.
    C) 25.
    D) 45.
    • ID#: 30430
    • The correct answer was c
    • If either side is displeased with a Code of Procedure decision, an appeal must be made within 25 days of the decision date.
  52. ID: 205949
    An analyst is about to issue a bullish research report on XYZ common stock. Under FINRA rules, the analyst and household members are prohibited from purchasing the stock for
    10 days after issuance
    20 days after issuance
    5 days after issuance
    30 days after issuance
    • ID: 205949
    • Your answer, 5 days after issuance., was correct!.
    • FINRA rules prohibit analysts and members of their households from investing in a company's securities for 30 days before and 5 days after the analyst issues a research report on the company
  53. ID: 30443
    Which type of historical information is required on Form U-4?
    I. 5-year residency.
    II. 10-year residency.
    III. 5-year employment.
    IV. 10-year employment.
    I and IV
    I and III.
    II and IV.
    II and III
    • ID: 30443
    • The correct answer was: I and IV.
    • Form U-4 requires an applicant to provide a 5-year residency history and a 10-year employment history.
  54. ID: 31287 A research analyst issues a strong buy recommendation on XYZ stock. Two weeks after issuance, the analyst is:
    I. permitted to buy XYZ.
    II. prohibited from buying XYZ.
    III. permitted to sell XYZ.
    IV. prohibited from selling XYZ.
    I and III
    I and IV
    II and III
    II and IV
    • ID: 31287
    • The correct answer was: I and IV.
    • Under the research analyst conflict of interest rules, an analyst is prohibited from investing in XYZ 30 days before and five days after the issuance of a research report on the company. Any existing holdings must be disclosed in the report. Therefore, the analyst would be permitted to buy XYZ two weeks after issuance. However, the rules also prohibit an analyst from trading against his most recent recommendation. Therefore, the analyst would be prohibited from selling any existing holdings in XYZ stock.
  55. ID: 31365
    A registered representative wants to conduct business from his vacation home, which is not registered as a branch office. The representative may conduct business from his vacation home and maintain its nonbranch status as long as it is used for less than:
    40 business days annually for securities business
    90 business days annually for securities business
    30 business days annually for securities business
    60 business days annually for securities business.
    • ID: 31365
    • Your answer, 30 business days annually for securities business., was correct!.
    • Under FINRA rules, any location, other than a primary residence, that is used for less than 30 business days annually for securities business is excluded from the definition of a branch. These locations would generally include vacation or second homes.
  56. ID#: 30715
    Which of the following statements regarding advertising prepared by an established member firm are TRUE?
    I. Options advertisements must be filed with FINRA at least ten days before first use.
    II. Options advertisements must be filed with FINRA within ten days of first use.
    III. Mutual fund advertisements must be filed with FINRA at least ten days before first use.
    IV. Mutual fund advertisements must be filed with FINRA within ten days of first use.
    A) II and IV.
    B) I and III.
    C) II and III.
    D) I and IV.
    • ID#: 30715
    • The correct answer was D
    • Options advertisements must be filed with FINRAĆ­s Advertising Regulation Department by all firms at least ten days before first use. Mutual fund advertisements must be filed within ten days of first use if the filer is an established firm.;
  57. ID#: 30442
    Under the Code of Arbitration, a respondent must answer within how many days after receiving a statement of claim?
    A) 20.
    B) 15.
    C) 45.
    D) 30.
    • ID#: 30442
    • The correct answer was c
    • After receiving a statement of claim, a respondent has 45 calendar days to respond to both the director of arbitration and the claimant.;
  58. ID#: 30208
    The maximum dollar limit for simplified arbitration procedures between securities industry persons is:
    A) $2,500.
    B) $25,000.
    C) $5,000.
    D) $10,000.
    • ID#: 30208
    • The correct answer was b
    • Simplified arbitration procedures are allowed and encouraged for disputes with a claim value of $25,000 or less.;
  59. ID#: 31351
    Members must maintain a record of a caller's request not to receive further telemarketing calls and to honor that firm-specific, Do-Not-Call request for a period of:
    A) Five years.
    B) Three years.
    C) Six years.
    D) Nine years.
    • ID#: 31351
    • The correct answer was A.
    • Registrations in the National Do-Not-Call list are maintained for five years. A consumer may reregister her telephone number at any time. Such reregistration begins another five-year registration period. FINRA rules on a firm-specific, Do-Not-Call list mirrors this five-year rule.;
  60. ID#: 205981
    One of the representatives in your firm has prepared and wishes to send a letter to all of his clients, about 50 in all, describing a strategy he believes is appropriate given recent market turbulence. Which statement is true?
    A) The letter may not be sent.
    B) The letter requires prompt review by a principal.
    C) A copy must be filed with FINRA within 10 days of first use.
    D) Approval by a principal is required in advance of first use.
    • ID#: 205981
    • The correct answer was d
    • In this instance, the letter is considered sales literature (25 or more existing clients in a 30 calendar day period), which requires principal approval prior to first use.;
  61. ID#: 30706
    If a registered representative voluntarily leaves the industry, which of the following statements are TRUE?
    I. The registered representative must reaffiliate within one year of termination to avoid retaking the exam.
    II. The registered representative must reaffiliate within two years of termination to avoid retaking the exam.
    III. FINRA retains jurisdiction over the registered representative for one year from the termination date.
    IV. FINRA retains jurisdiction over the registered representative for two years from the termination date.
    A) I and IV.
    B) I and III.
    C) II and IV.
    D) II and III.
    • ID#: 30706
    • The correct answer was c
    • For two years after a registered representative leaves the industry, reaffiliation with a member firm can be done without retaking the licensing exam. In addition, FINRA retains jurisdiction for the two-year period following termination. Thus, if the person becomes the subject of an arbitration hearing, on the record interview or disciplinary action the person is still subject to FINRA rules. The SEC on the other hand may impose sanctions for criminal activity such as fraud for as long as the law permits.;
    • ID#: 31317
    • A member firm that plans to offer customers an investment analysis tool must provide FINRA access to the tool:
    • A) ten days prior to first use.
    • B) within ten days of first use.
    • C) only if there is an arbitration case related to its use.
    • D) only if there is a Code of Procedure hearing related to its use.
  62. ID#: 31317
    • The correct answer was b
    • If a firm plans to offer an investment analysis tool to its customers, it must provide FINRA access to the tool within ten days of first use. Furthermore, the firm must describe the criteria and methodology used, including the tool's limitations and key assumptions; explain that results may vary with each use and over time; describe, if applicable, the universe of investments considered in the analysis; and display the caveat that projections are not guarantees of results.;
  63. ID#: 31253
    A member firm fails to pay an arbitration award within the prescribed time frame. FINRA may revoke the member's registration after giving:
    A) 15 days' written notice.
    B) 10 days' written notice.
    C) 20 days' written notice.
    D) 30 days' written notice.
    • ID#: 31253
    • The correct answer was A.
    • Arbitration awards must be paid within 30 days of decision date. If a firm fails to pay within this time period, FINRA may suspend or revoke the firm's membership after giving 15 days' written notice.;
  64. ID#: 31253
    A member firm fails to pay an arbitration award within the prescribed time frame. FINRA may revoke the member's registration after giving:
    A) 30 days' written notice.
    B) 10 days' written notice.
    C) 20 days' written notice.
    D) 15 days' written notice.
    • ID#: 31253
    • The correct answer was d
    • Arbitration awards must be paid within 30 days of decision date. If a firm fails to pay within this time period, FINRA may suspend or revoke the firm's membership after giving 15 days' written notice.;
  65. ID#: 31083
    Which of the following is considered sales literature?
    A) A group email sent to ten existing retail customers in any 30-calendar-day period.
    B) Independently prepared reprints.
    C) A group email sent to 25 prospective retail customers in any 30-calendar-day period.
    D) Billboards
    • ID#: 31083
    • The correct answer was c
    • The definition of customer correspondence includes form letters and group emails sent to fewer than 25 prospective or existing retail customers in any 30-calendar-day period. Form letters and group emails sent to 25 or more existing or prospective retail customers in any 30-calendar-day period are sales literature. Billboards are public media and as such are considered to be advertising. Independently prepared reprints are a separate category of communications with the public.;
  66. ID#: 30433
    Under the Code of Procedure, if a FINRA member receives a formal complaint from the Department of Enforcement, the member must file an answer within how many days?
    A) 10.
    B) 25.
    C) 15.
    D) 30.
    • ID#: 30433
    • The correct answer was b
    • After receiving a complaint from the Department of Enforcement, a respondent has 25 days to file a response.;
  67. ID#: 30803
    To terminate 12b-1 charges, a mutual fund must obtain a majority vote of:
    I. shareholders.
    II. directors.
    III. outside directors.
    A) I and III.
    B) I and II.
    C) II and III.
    D) I, II and III.
    • ID#: 30803
    • The correct answer was A.
    • To terminate 12b-1 charges, a fund must have a majority vote of both the shareholders and outside directors.;
  68. ID#: 30438
    A late filing fee will be assessed against a member if Form U-5 is not filed within how many days of a termination date?
    A) 45.
    B) 10.
    C) 20.
    D) 30.
    • ID#: 30438
    • The correct answer was d
    • If Form U-5 is not filed with FINRA within 30 days of a termination date, a late filing fee will be assessed.;
  69. ID#: 31447
    Under FINRA rules, which of the following are considered advertising?
    I. A principal writes a weekly article on investing, which is syndicated in newspapers throughout the country.
    II. A research analyst appears on CNBC to talk about his latest equity recommendation.
    III. Copy written by a principal for use as a college recruiting tool.
    IV. Copy written by a principal for use in a TV commercial describing the firm's services.
    A) II and III.
    B) I and III.
    C) I and IV.
    D) II and IV.
    • ID#: 31447
    • The correct answer was c
    • Copy intended for use in public media such as newspapers, magazines, radio, television, and so forth is considered advertising. Sales literature, on the other hand, is a form of targeted communication not using public media. For example, copy prepared as a recruiting tool is targeted to a select group. A research analyst speaking about his latest equity recommendations is a separate form of public communication termed a public appearance.;
  70. ID#: 30623
    If an individual is convicted of a money- or securities-related fraud, FINRA may rightfully deny registration to that individual for how many years from the conviction date?
    A) One year.
    B) Ten years.
    C) Two years.
    D) Five years.
    • ID#: 30623
    • The correct answer was b
    • Conviction within the past ten years for any felony or securities-/money-related misdemeanor is a statutory disqualification of an applicant for registration with a FINRA member firm.;
  71. ID#: 30982
    Members must immediately file notice with FINRA regarding a complaint against which of the following?
    I. Registered representative, if settled for $10,000.
    II. Registered representative, if settled for $20,000.
    III. Member, if settled for $20,000.
    IV. Member, if settled for $30,000.
    A) II and IV.
    B) I and II.
    C) II and III.
    D) III and IV.
    • ID#: 30982
    • The correct answer was A.
    • Members must file notice with FINRA to report securities- or commodities-related judgments, awards, or settlements of $15,000 or more against individuals, or $25,000 or more against member firms.;
  72. ID#: 205975
    A registered person has been in the securities business for 6 years. This person will be subject to the Regulatory Element of Continuing Education
    A) this year.
    B) next year.
    C) every 2 years.
    D) in 2 more years.
    • ID#: 205975
    • The correct answer was d
    • The Regulatory Element of CE must be completed within 120 days of a person's second registration anniversary and every 3 years thereafter (i.e., within 120 days of a person's 5th, 8th, 11th registration anniversary etc.) Therefore, the next required date is in 2 more years.;
  73. ID#: 30658
    An associated person leaves Member Firm #1 and four months later is hired by Member Firm #2. A principal at Member Firm #2 asks for a copy of Form U-5 filed by the former employer. Under FINRA rules, the new employee must provide a copy within how many business days of the request?
    A) seven days.
    B) five days.
    C) two days.
    D) ten days.
    • ID#: 30658
    • The correct answer was c
    • Under FINRA rules, if a new employer requests a copy of Form U-5 from a new employee, he must provide it within two business days.;
  74. ID#: 30437
    Under FINRA rules, a registered representative must complete the regulatory element of continuing education within how many days of a registration anniversary date?
    A) 30.
    B) 120.
    C) 60.
    D) 90.
    • ID#: 30437
    • The correct answer was b
    • The regulatory element requires that all registered persons complete a computer-based training session within 120 days of their second registration anniversary and every third anniversary thereafter.;
  75. ID#: 30429
    Information on customer complaints must be electronically filed with FINRA:
    A) quarterly.
    B) weekly.
    C) monthly.
    D) semiannually.
    • ID#: 30429
    • The correct answer was A.
    • FINRA rules require members to electronically file information on customer complaints within 15 days of the end of each calendar quarter. If the complaint involves allegations of theft, misappropriation of funds or securities, or forgery, the member must immediately (within ten business days) report it to FINRA.;
  76. ID#: 31492
    Under FINRA rules, a firm with at least 20 registered persons will be subject to the taping rule if at least what percentage of its registered persons have been employed by disciplined firms within the past three years?
    A) 25%.
    B) 10%.
    C) 15%.
    D) 20%.
    • ID#: 31492
    • The correct answer was d
    • A firm with 20 or more registered persons will be subject to the taping rule if 20% or more of these persons have been employed by disciplined firms within the past three years.

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