SIE – Practice Exam 13

The two main accounts opened by investors are cash accounts and margin accounts, which are governed under:

An investor wants to purchase 100 shares of XYZ Company in their margin account for a total of $5,000. Under Regulation T, the investor can borrow up to:

In order to be approved for options trading, investors must be prepared to provide which of the following?

1. General investing knowledge
2. Trading experience
3. Investment objectives
4. Knowledge of options and the risk associated with options trading

A broker decides to sell 200 shares of XYZ Company on his customer’s behalf. In which account type is the broker permitted to make this trade?

Fee-based financial advisors have a fiduciary duty to their clients, which means:

An investor opens a new JTWROS (joint tenants with rights of survivorship) account with their spouse. If one of the account owners dies, which of the following occurs?

An investor opens a new TIC (tenants in common) account with their brother. If one of the account owners dies, which of the following occurs?

FINRA Rule 4370 requires firms to create and maintain written documentation that addresses serious or emergency business disruptions, known as:

The SEC Regulation Best Interest rule requires broker-dealers and investment advisers to supply which of the following relationship summary documents to retail investors?

Reasonable-basis suitability rules require broker-dealers and their registered representatives to:

1. Have a reasonable basis to believe that the recommendation is suitable for at least some investors
2. Have an understanding of the potential risks and rewards of the recommended product
3. Have a reasonable basis to believe that the recommendation is suitable for that specific customer
4. Have a reasonable basis to believe that a series of recommended transactions is not excessive nor unsuitable for the customer in consideration of their investment profile