Series 24: Review Quiz

Review Quiz

1. 1. A market maker gives a firm quote for LMN of “15 – 15 1/4.” The market maker receives a limit order to buy 1000 shares at the offering price. The market maker must provide:
2. A. 1000 shares at 15
3. B. 1000 shares at 15 1/4
4. C. 100 shares at 15
5. D. 100 shares at 15 1/4
6. 2. Under FINRA rules for an Alternative Display Facility, a locking quotation for a National Market System stock is prohibited. What is the best definition of a locking quotation?
7. A. a quote that stops active trading
8. B. a quote that freezes or locks the stock price
9. C. a bid for an NMS stock at a price equal to the price of an offer for such stock
10. D. a bid for an NMS stock at a higher price than the price of an offer for such stock
11. 3. Payment for order flow:
12. A. is prohibited
13. B. requires customer consent
14. C. requires disclosure to the customer
15. D. must not exceed $0.005 per share
16. 4. When an investor sells a security that he or she does not possess before the sale, it is known as:
17. A. naked short selling
18. B. normal short selling
19. C. market manipulation
20. D. front running
21. 5. Which of the following securities are subject to the Order Protection Rule of Regulation NMS?
22. I. a Nasdaq-listed stock
23. II. a Pink Sheets-listed stock
24. III. an OTCBB-listed stock
25. IV. an NYSE-listed stock
26. A. IV only
27. B. I and IV
28. C. II and III
29. D. I, II, III, and IV
30. 6. Dark pools of liquidity refer to which of the following?
31. A. large anonymous institutional orders
32. B. bulk orders of debt securities
33. C. all bulk institutional orders
34. D. bulk orders that require cash settlement
35. 7. When two or three private parties deliberately trade a security heavily between themselves in order to generate artificial trading volume, it is called:
36. A. painting the ta