Chapter 10 Practice Questions
- 1. A member firm must preserve records of customer complaints for at least _____ years from the date of the complaint.
- A. Four
- B. Three
- C. Six
- D. Two
- 2. Which of the following outside activities does a broker not need to disclose to her employer prior to engaging in the activity?
- A. Investing money in a Real Estate Investment Trust
- B. Serving on a nonprofit board of directors
- C. Teaching yoga at a local community center
- D. Serving as a paid trustee on a family trust
- 3. Which of the following would be acceptable to give to a customer under the FINRA rules on gifts and gratuities?
- A. A $200 ticket to a Cirque de Soleil show that the representative will also attend
- B. Two $75 dollar tickets to a concert that the representative will not attend
- C. A $125 holiday box of chocolates sent by the representative and paid for by the firm
- D. A $150 stroller gift that the firm pays for
- 4. Sandra, a registered representative for Strong Brokers, is finding investors to purchase a racehorse she has her eye on. No one at Strong Brokers is aware of this investment. Sandra tells Jim, a client, about the opportunity. Jim wants in. Sandra arranges the paperwork, and the deal is structured so Jim’s stake would be considered a security. Sandra has committed a violation by:
- A. Selling away
- B. Engaging in arbitrage
- C. Passing along insider information
- D. All of the choices listed
- 5. Sally Slick, a registered representative of broker-dealer Shady Trades, receives a written complaint from a customer, John. John is upset with the performance of his portfolio and wants to invest in different securities. Sally’s supervisor is on vacation, so she holds on to the complaint for the time being. She mentions to John that she heard a rumor that ViaTech’s stock is about to skyrocket, and he decides