Series 6: Chapter 8 Practice Questions

Chapter 8 Practice Questions

1. 1. How much may a customer be initially loaned under Regulation T?
2. A. 25% of a security’s value
3. B. 35% of a security’s value
4. C. 50% of a security’s value
5. D. 65% of a security’s value
6. 2. Assuming each of investor has no money in his or her cash account, which of the following is an example of freeriding?
7. A. Martin purchases 500 shares of ABC on Monday and sells them on Thursday, after his initial trade has settled.
8. B. Julian purchases 1,000 shares of XYZ on Monday and does not pay for them until Friday.
9. C. Justine purchases 200 shares of ABL on Tuesday and then sells them the same day to fund her purchase.
10. D. Amy purchases 500 shares of FXT on Monday, deposits 50% of the cost of the securities in her account on Tuesday, and then does not deposit additional money into her account.
11. 3. An order ticket for a securities transaction must be prepared:
12. A. Before the execution of the trade
13. B. By the end of the trade date
14. C. No later than one business day after the trade date
15. D. No later than two business days after the trade date
16. 4. A trade confirmation for an agency transaction in an equity security contains all of the following except:
17. A. Quantity
18. B. Name of security
19. C. Net cost
20. D. Markup or markdown
21. 5. To hold a security in street name means:
22. A. You have bought a security on margin
23. B. You bought your security over-the-counter
24. C. You are the beneficial owner of the security
25. D. Your certificate is being held by your broker
26. 6. Jack’s customer, John, has asked Jack to hold his mail for him for a while. Jack wants to be a broker that delivers exceptional customer service to his customers, so Jack agrees to hold his mail. Which of the following is true regarding FINRA’s requirements for holding mail for a customer?
27. A. FIN