Chapter 3 Practice Questions
1. Seth places an order for 15 shares of Dropped Call Wireless common stock. Seth’s broker must send Seth a trade confirmation:
A. No later than the day after settlement
B. At or before the completion of the transaction
C. By the close of business on the day of the transaction
D. No later than one day after the transaction
2. Brokers and dealers are required to disclose certain information to customers at or before completion of a transaction. Which of the following information is not required on the trade confirmation that discloses this information?
A. If the broker-dealer is not a member of SIPC
B. Whether the broker-dealer is acting as agent for the customer
C. Whether the broker-dealer is a market maker in the security
D. The name of the associated person who took the order
3. A customer must be sent or given a confirmation at or before settlement with all of the following information EXCEPT:
A. Which market the trade was executed in
B. Commission on trade, if acting as an agent
C. Markups/markdowns on Nasdaq securities if acting as principal
D. Whether the broker acted in a dual agency capacity
4. For transactions involving mutual fund securities purchased through an investment company plan, periodic confirmation statements are permissible if the customer is given prior notification. When must periodic confirmations be sent?
A. On the last day of the monthly period
B. On the last day of the quarterly period
C. Within five business days after the end of each monthly period
D. Within five business days after the end of each quarterly period
5. Which of these records is a firm required to retain for six years?
A. Minutes of partners’ meetings
B. General ledger
C. SARs
D. Retail communications
6. The S&P 500 declines by 20% at 2:00 p.m. What will happen to the markets?
A. There will be a market-wide halt for the rest