Chapter 9 Practice Questions
1. Which of the following is true regarding approval of retail communications?
A. A registered principal must always approve the communication.
B. Members must maintain retail communications for a period of three years from first use.
C. An associated person may approve his own retail communications provided the registered principal is the one who files it with the FINRA Advertising Regulation Department.
D. They must always be filed with FINRA’s Advertising Regulation Department.
2. When must copies of retail communications concerning investment companies be filed with FINRA?
A. Before their first use
B. Within 5 business days of first use
C. Within 10 business days of first use
D. At least 10 business days prior to first use
3. A principal must approve which of the following communications before they are sent?
A. Sales literature
B. Group correspondence that is sent out to 20 prospective clients
C. An instant message response to a client
D. Interactive content on Facebook that does not include a recommendation to sell securities
4. A member firm’s advertisements contain paid endorsements from customers, one of which compares its services favorably against another broker, a nationally known competitor. The testimonials must be accompanied by each of these disclaimers and disclosures except:
A. These testimonials may not represent the views of other customers.
B. The experience of these customers is no guarantee of future performance.
C. The amounts of all payments made to customers for their endorsements must be footnoted.
D. Material differences between the two brokerages’ services must be disclosed.
5. Correspondence, as defined by FINRA, consists of any written (including electronic) communication that is distributed or made available to:
A. 30 prospective retail customers within any 30-calendar-day period
B. One or more of its existing