Exercise

Answer the following questions.

1.Allowable “soft dollar arrangements” or “soft dollar payments” include which of the following choices?

A.Paying a brokerage commissions for services or research

B.A firm paying a registered rep’s travel expenses

C.A mutual fund sponsoring a sales contest

D.An investment adviser’s computer hardware

2.Firms must disclose to customers how their business continuity plans address potential business disruptions and how they will respond to various events. This disclosure is required:

A.In writing when a customer opens an account

B.In writing on an annual basis

C.Either verbally or in writing within 10 days of when the customer opens an account

D.Either verbally or in writing whenever the firm fails to meet its net capital requirements in a given month

3.For which of the following actions would it not be acceptable to pay a nonregistered foreign finder based on the amount raised?

A.For bringing in customers who are French nationals and live in France

B.For bringing in customers who are U.S. citizens and live in France

C.For bringing in customers who are French firms that are domiciled in France

D.For bringing in customers who are Swiss firms that are domiciled in France

4.Which of the following activities is allowed for an associated person of a firm?

A.Guaranteeing a customer that making a certain investment will not lead to a loss of money

B.Guaranteeing a customer that by diversifying his portfolio he will not lose any money

C.Telling a customer that he will be reimbursed for any amount lost as a result of making an investment

D.Each of the other choices is not allowed

5.Without prior written approval from both his firm and the firm of the other person, which of the following would be acceptable for an associated person of one firm to give to an associated person of another firm? Assume the gift is related to business provided.

A.A $150 wedding gif