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Series 10 Practice Exam 4

Series 10 Practice Exams

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Practice Exam 4

Series 10 Practice Exam 4

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Question 1 of 10

1. Question

When a corporation declares a cash dividend, there may be certain investors who believe buying the stock at that time in order to qualify to receive the dividend is a sound investment income strategy. FINRA rules state that:

Such an investor may proceed with the purchase based on their desire for dividend income.
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Such an investor may not proceed with the purchase under these circumstances.
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A member firm should caution its RRs to avoid engaging in ‘selling dividends’ as there is no material benefit to the investor in doing so.
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Firms should require the purchaser to sign a waiver of liability if they proceed with such a practice.
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Question 2 of 10

2. Question

FINRA Rule 5130 places certain restrictions on purchasers wishing to buy shares in which of the following distributions?

DPPs
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REITs
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Equity IPOs
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All of the above
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Question 3 of 10

3. Question

SRO rules identify simplified arbitration as a process for handling:

A customer complaint involving $ 50,000 or less
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A customer complaint involving $ 100,000 or less
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A dispute between member firms involving $ 50,000 or less
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A dispute between member firms involving $ 100,000 or less
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Question 4 of 10

4. Question

One of your RRs has entered an order for a customer but has mismarked the order ticket, showing the wrong customer account for the transaction. To rectify the error, which of these would be appropriate?

Cancel the order
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Let the order go through as written and have the client transfer the securities to the correct account after settlement.
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Cancel the order and Re-bill
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Cancel the order and Re-bill with principal’s approval.
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Question 5 of 10

5. Question

A number of your sales agents have asked you for clarification regarding the ex-dividend date when a corporation announces a stock split or stock dividend. You inform them as follows:

It’s the same rule as applies for cash dividends
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Stock dividends of 25% or greater, and stock splits, have an ex-dividend date one business day past the designated payable date.
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Stock dividends of 25% or greater, and stock splits, have an ex-dividend date one business day after the designated record date.
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The corporate Board of Directors at its discretion will set the ex-dividend date for these distributions.
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Question 6 of 10

6. Question

When a trade takes place in an OTC equity security and a reclamation is required due to improper delivery by the contra-dealer;

Your firm is required make payment while the discrepancies are being resolved.
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Your firm may choose to make payment for any undisputed part of the delivery
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Your firm is required to make payment for any undisputed part of the delivery.
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Unless your firm initially rejected the delivery with notice to the contra-dealer that it was improper, your firm is required to make payment while the discrepancies are being resolved.
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Question 7 of 10

7. Question

Form U-6 is used in which of the following circumstances?

When a previously registered representative is coming back into the business after a 2-year hiatus.
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When a previously registered representative is coming back into the business prior to the end of a 2-year hiatus
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When a registered representative has completed their active duty military service and plans to come back to the member firm.
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To show any disciplinary history of a person associated with a member.
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Question 8 of 10

8. Question

Full disclosure documents are considered vitally important to provide to prospective purchasers of new securities offerings. All of the below are true except:

An Official Statement is provided to purchasers of new municipal issues
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An Offering Circular is provided to purchasers of Reg. A offerings
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An Offering Memorandum is provided to purchasers of Reg. D offerings
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A Final Prospectus is provided to purchasers of Rule 147 offerings
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Question 9 of 10

9. Question

All member firms must provide Continuing Education to their registered representatives on an ongoing basis, referred to as Firm Element CE. In addition, FINRA rules mandate all registered representatives take a Regulatory Element CE exam;

Annually
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Every two years
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Every three years
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Frequency depends upon the size of the member firm and the product mix it offers to the public.
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Question 10 of 10

10. Question

When a customer’s long margin account has gone into undermargined status, an NYSE/FINRA maintenance margin call will be issued, demanding the client bring their equity up to the minimum maintenance level.

The client has 2 business days in which to satisfy the call.
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The call may be met with cash in an amount equal to the call, or met by liquidation of securities in the account equal to 2 times the amount of the call.
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The call must be met on demand and may be met with cash equal to the call or by liquidation of securities in the account equal to 4 times the amount of the call.
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The client may use their SMA/excess equity in the account to meet the call.
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