Series 3: Chapter 7 Practice Questions

Chapter 7 Practice Questions

1. 1. Fred is an independent IB operating as a sole proprietor. Which registration forms must he file with the National Futures Association?
2. A. Form 40
3. B. Form 8-R
4. C. Form 101
5. D. Form 1-FR-IB
6. 2. How much is the fee paid by a futures commission merchant for filing Form 7-R to register with the National Futures Association?
7. A. $500
8. B. $200
9. C. $100
10. D. $85
11. 3. How much is the fee paid by an individual principal or associated person for filing Form 8-R to register with the National Futures Association?
12. A. $500
13. B. $200
14. C. $100
15. D. $85
16. 4. All the following are required of an FCM’s risk disclosure document except:
17. A. A summary of its current risk practices, controls, and procedures
18. B. Its most recent FOCUS report
19. C. The business address and business background of each of its principals
20. D. Public display on its website
21. 5. A customer is unhappy over receiving a margin call. He asks his broker to show him where it says that he agreed to deposit the additional funds. Which document would the broker provide?
22. A. The risk disclosure statement
23. B. The signed acknowledgement of receipt of the risk disclosure statement
24. C. The signed commodity customer agreement
25. D. A copy of the firm’s margin call policy
26. 6. Which of the following is required of discretionary accounts?
27. I. Written customer authorization prior to each trade
28. II. Regular supervisory review of discretionary trading activity
29. III. Clear identification of each discretionary account
30. IV. Written principal approval of time and price prior to each trade
31. A. I and IV
    
32. B. I and III
    
33. C. II and IV
    
34. D. II and III
    
35. 7. Once a customer instructs her broker in writing to transfer her account to another firm, the carrying member must report to the receiving member all of the customer’s account balances and all open positions within:
36. A. Two business days
37. B. Three busin