Skip to content

Series 3 Practice Exams
Series 3 Prep Courses
Other Practice Exams
- SIE
- Series 4
- Series 6
- Series 7
- Series 9
- Series 10
- Series 24
- Series 26
- Series 27
- Series 57
- Series 63
- Series 65
- Series 66
- Series 79
- Series 99

Series 3 Practice Exam 3

Series 3 Practice Exams

Practice Exam 1
Practice Exam 2
Practice Exam 3
Best Prep Courses

Series 3 Practice Exam 3

Time limit: 0

Quiz Summary

0 of 10 Questions completed

Questions:

Information

You have already completed the quiz before. Hence you can not start it again.

Quiz is loading…

You must sign in or sign up to start the quiz.

You must first complete the following:

Results

Exam complete. Results are being recorded.

Results

0 of 10 Questions answered correctly

Your time:

Time has elapsed

You have reached 0 of 0 point(s), (0)

Earned Point(s): 0 of 0, (0)
0 Essay(s) Pending (Possible Point(s): 0)

Categories

Not categorized 0%

Next Exam Main Menu

Question 1 of 10

1. Question

The commodity exchanges used the term ‘Open Interest’ which refers to:

The number of contracts that traded on the exchange that day.
Correct Incorrect Correct answer

The number of contracts that were opened on the exchange that day.
Correct Incorrect Correct answer

The total number of contracts which are outstanding and not yet settled.
Correct Incorrect Correct answer

The number of contracts which were terminated on that day.
Correct Incorrect Correct answer

Correct

Incorrect
Question 2 of 10

2. Question

All futures contracts have a minimum increment by which the price may change, more commonly referred to as:

1/100th of a cent
Correct Incorrect Correct answer

1 cent
Correct Incorrect Correct answer

Basis points
Correct Incorrect Correct answer

Tick size
Correct Incorrect Correct answer

Correct

Incorrect
Question 3 of 10

3. Question

The risk that a party to a futures contract will renege and fail to perform:

Is reduced by having registered brokers representing the parties
Correct Incorrect Correct answer

Is reduced by having the registered Commodity Exchanges handling the purchase and sale of contracts
Correct Incorrect Correct answer

Is referred to a litigation risk
Correct Incorrect Correct answer

Is reduced by having a Clearinghouse acting as a counter-party to both sides of a trade, guaranteeing performance
Correct Incorrect Correct answer

Correct

Incorrect
Question 4 of 10

4. Question

Once a client has been approved to use margin in trading futures contracts, the client has signed an agreement with their broker to be financially responsible for margin calls

Which will occur when contracts are initially entered into.
Correct Incorrect Correct answer

Which will occur when the account equity falls below the minimum maintenance requirement.
Correct Incorrect Correct answer

Which will occur when the broker changes its supervisory procedures requiring higher margin equity minimums.
Correct Incorrect Correct answer

Which will occur when a client wishes to engage more complex strategies than simply going long or short futures contracts.
Correct Incorrect Correct answer

Correct

Incorrect
Question 5 of 10

5. Question

It is a truism in the trading markets for both securities and futures that:

Lower volume leads to narrow bid-ask spreads.
Correct Incorrect Correct answer

Higher volume and liquidity lead to narrower bid-ask spreads.
Correct Incorrect Correct answer

Thinly-traded securities and futures will tend to have tighter bid-ask spreads.
Correct Incorrect Correct answer

Spreads between bid and ask prices are set by the Exchanges.
Correct Incorrect Correct answer

Correct

Incorrect
Question 6 of 10

6. Question

Margin requirements in the futures markets are based upon a variety of factors, excluding:

How volatile is the price of the underlying commodity
Correct Incorrect Correct answer

How liquid is the commodities market
Correct Incorrect Correct answer

The liquid net worth and experience of the client
Correct Incorrect Correct answer

The size of the contracts being traded
Correct Incorrect Correct answer

Correct

Incorrect
Question 7 of 10

7. Question

One of the principal differences between a futures contract and an option on a futures contract is:

An option provides an opportunity to take a position in the specific commodity whereas a futures contracts requires settling and exchanging the actual commodity
Correct Incorrect Correct answer

An option is considered a security whereas futures are contracts involving the taking or making delivery of a commodity
Correct Incorrect Correct answer

They may require separate exams to be taken by agents wishing to do business in both
Correct Incorrect Correct answer

Options are not marginable whereas futures contracts are marginable
Correct Incorrect Correct answer

Correct

Incorrect
Question 8 of 10

8. Question

The primary reason for initial margin deposit requirements is:

To prevent trading losses
Correct Incorrect Correct answer

To provide a good faith deposit to be used in the event the position shows losses
Correct Incorrect Correct answer

To lock in profits on trading positions
Correct Incorrect Correct answer

To pay for transaction fees associated with taking positions
Correct Incorrect Correct answer

Correct

Incorrect
Question 9 of 10

9. Question

A metals trader shorts a copper futures contracts with a 3.50 per pound price. They expect the price of copper to:

Decline
Correct Incorrect Correct answer

Increase
Correct Incorrect Correct answer

Remain neutral
Correct Incorrect Correct answer

Not enough information to tell
Correct Incorrect Correct answer

Correct

Incorrect
Question 10 of 10

10. Question

One of your clients takes a long position in 5 soybean futures contracts at $8.70 per bushel (contract size = 5000 bushels). If the price of soybeans declines to $8.50, your client will experience a:

Gain of $1,000
Correct Incorrect Correct answer

Loss of $1,000
Correct Incorrect Correct answer

Gain of $5,000
Correct Incorrect Correct answer

Loss of $5,000
Correct Incorrect Correct answer

Correct

Incorrect

1
2
3
4
5
6
7
8
9
10

Next: Best Series 3 Prep Courses

Disclaimer: FINRA®, SIE®, and Securities Industry Essentials® are trademarks of the Financial Industry Regulatory Authority (FINRA). This website is not affiliated with, endorsed by, or approved by FINRA. All trademarks are the property of their respective owners.

© 2025 FINRA Practice Tests • Built with GeneratePress