Series 99: Chapter 1 Practice Questions

Chapter 1 Practice Questions

1. 1. A customer owns 100 shares of XYZ. The customer has registered the shares directly with the company and they are held through book-entry with a transfer agent. The customer wishes to transfer the shares. How should the shares be transferred?
2. A. Direct Registration System
3. B. ACATS
4. C. DWAC
5. D. CRD
6. 2. Sarah, a representative of a broker-dealer, has a great idea to increase business. She decides to hold a one-day sale on Black Friday. She is going to cut the sales charge back and discount the price of the mutual funds she sells. She has decided to take out a large ad in the New York Times advertising this great deal. Which of the following is true?
7. A. Sarah’s plan is acceptable as long as she gets her advertising preapproved with FINRA.
8. B. Sarah’s plan is acceptable as long as she gets both the discount and the advertisement approved by a principal in writing.
9. C. Sarah’s plan is a violation of securities laws.
10. D. Sarah’s plan is acceptable as long as she does not discount the securities below the NAV and she gets her advertisement preapproved by FINRA and her principal.
11. 3. A security may be endorsed by the customer either:
12. A. On the front of the security’s certificate or with a stock or bond assignment
13. B. On the back of the security’s certificate or with a stock or bond assignment
14. C. On the front of the security’s certificate or with a stock or bond power
15. D. On the back of the security’s certificate or with a stock or bond power
16. 4. All of the following are acceptable reasons for a security to be subject to reclamation except:
17. A. The certificate was counterfeit.
18. B. The signature on the certificate was not guaranteed.
19. C. Corporation defaulted on the security at T + 1.
20. D. The certificate was rejected by the transfer agent.
21. 5. Good delivery requirements state that if a coupon bond is missing interest coupons prior to delivery to an