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Series 26 – Practice Test 3

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Question 1 of 10

1. Question
Identify which of the following statements accurately represents the rule regarding FINRA’s jurisdiction over terminated employees?
1. 1 year for non-registered employees
2. 2 years for registered personnel
3. 2 years for non-registered employees
4. 4 years for registered personnel
I and II
Correct Incorrect Correct answer

II and III
Correct Incorrect Correct answer

III and IV
Correct Incorrect Correct answer

I and IV
Correct Incorrect Correct answer
Correct

Incorrect
Question 2 of 10

2. Question

Which of the below would one expect to find posted to the broker-dealer’s daily blotter?

The firm’s net capital as of that date
Correct Incorrect Correct answer

Identification of the securities and the amounts which were sold on that date
Correct Incorrect Correct answer

The settlement dates of the trades done on that date
Correct Incorrect Correct answer

Names and addresses of customers who did transactions on that date
Correct Incorrect Correct answer

Correct

Incorrect
Question 3 of 10

3. Question

A customer has expressed interest in investing in one of the mutual funds your firm has presented as suitable but they are concerned about meeting the minimum invest required to get into the fund. Which of the below would be the best source of this information?

SAI
Correct Incorrect Correct answer

Sales literature
Correct Incorrect Correct answer

The fund’s prospectus
Correct Incorrect Correct answer

The fund’s Custodian
Correct Incorrect Correct answer

Correct

Incorrect
Question 4 of 10

4. Question

In accordance with FINRA’s rules on the payment of continuing commissions, they are:

Not payable once a registered rep has left the industry.
Correct Incorrect Correct answer

Payable to a retired rep on the condition they left the industry in good standing and had entered into a bona fide contract while still employed which calls for such payments.
Correct Incorrect Correct answer

Payable to the surviving spouse of a retired registered rep with FINRA approval.
Correct Incorrect Correct answer

Payable to a retired registered rep who has agreed to direct business to their former firm for a period of 5 years.
Correct Incorrect Correct answer

Correct

Incorrect
Question 5 of 10

5. Question

FINRA’s rules regarding compensation can be divided into two categories: cash and non-cash compensation. Which of the following is not considered non-cash compensation?

Computer software program which assists the member in analyzing fund performance
Correct Incorrect Correct answer

Reimbursement of travel expenses to attend a fund-sponsored sales event
Correct Incorrect Correct answer

Items of reminder advertising, such as pens and coffee cups with the fund’s logo on them
Correct Incorrect Correct answer

Service fees
Correct Incorrect Correct answer

Correct

Incorrect
Question 6 of 10

6. Question
An associated person wishes to open an account at a member firm other than their own. Permission of their employing member firm is mandatory if which of the following securities products are going to be purchased in the account?
1. Open-end investment company shares
2. Unit Investment Trust shares
3. Real Estate Investment Trust shares
4. NYSE and NASDAQ listed stocks.
All of these
Correct Incorrect Correct answer

IV only
Correct Incorrect Correct answer

III and IV only
Correct Incorrect Correct answer

I and II only
Correct Incorrect Correct answer
Correct

Incorrect
Question 7 of 10

7. Question

A member firm’s minimum required Blanket Bond is based upon:

It’s highest net capital requirement for the 12 months preceding the current bond’s renewal date
Correct Incorrect Correct answer

It’s average net capital requirement for the 12 months preceding the current bond’s renewal date
Correct Incorrect Correct answer

The number of registered personnel employed by the firm during the previous 12 month period
Correct Incorrect Correct answer

The number of transactions performed by the firm during the previous 12 month period
Correct Incorrect Correct answer

Correct

Incorrect
Question 8 of 10

8. Question

As a Branch manager, you’ve come into possession of material non-public information about a publicly-traded listed stock. Under what circumstances is it permissible to trade on this information?

With permission from your Compliance or Legal Department
Correct Incorrect Correct answer

With permission from FINRA or the SEC
Correct Incorrect Correct answer

When the information is disseminated to the public
Correct Incorrect Correct answer

Under no circumstances
Correct Incorrect Correct answer

Correct

Incorrect
Question 9 of 10

9. Question

One of your agents has asked about sharing commissions with another agent and whether it is permitted.

Commission-sharing is not permitted.
Correct Incorrect Correct answer

Commission-sharing with registered personnel of the same firm is permitted with managerial approval.
Correct Incorrect Correct answer

Commission-sharing with legal or accounting professionals who the customer has on their financial team.
Correct Incorrect Correct answer

Commission-sharing with agents at other member firms is permitted with approval of both agents’ managers.
Correct Incorrect Correct answer

Correct

Incorrect
Question 10 of 10

10. Question

A client plans to annuitize their variable annuity contract. Once the paperwork has been completed, when will the insurance company begin making monthly payments?

Within 7 business days of receiving the paperwork
Correct Incorrect Correct answer

Within 5 business days of receiving the paperwork
Correct Incorrect Correct answer

Immediately upon receiving the paperwork
Correct Incorrect Correct answer

At the time set forth in the VA contract and, if applicable, the prospectus and/or the Investment Company Act of 1940
Correct Incorrect Correct answer

Correct

Incorrect

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Quiz Summary

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1. Question

Identify which of the following statements accurately represents the rule regarding FINRA’s jurisdiction over terminated employees?

2. Question

Which of the below would one expect to find posted to the broker-dealer’s daily blotter?

3. Question

A customer has expressed interest in investing in one of the mutual funds your firm has presented as suitable but they are concerned about meeting the minimum invest required to get into the fund. Which of the below would be the best source of this information?

4. Question

In accordance with FINRA’s rules on the payment of continuing commissions, they are:

5. Question

FINRA’s rules regarding compensation can be divided into two categories: cash and non-cash compensation. Which of the following is not considered non-cash compensation?

6. Question

An associated person wishes to open an account at a member firm other than their own. Permission of their employing member firm is mandatory if which of the following securities products are going to be purchased in the account?

7. Question

A member firm’s minimum required Blanket Bond is based upon:

8. Question

As a Branch manager, you’ve come into possession of material non-public information about a publicly-traded listed stock. Under what circumstances is it permissible to trade on this information?

9. Question

One of your agents has asked about sharing commissions with another agent and whether it is permitted.

10. Question

A client plans to annuitize their variable annuity contract. Once the paperwork has been completed, when will the insurance company begin making monthly payments?