Chapter 13 Practice Questions
1. The following items are available for purchase with soft dollars except:
A. Cell phones
B. Employee salary
C. Copy machine
D. None of the choices listed can be purchased with soft dollars
2. Which of the following outside activities does a broker not need to disclose to her employer prior to engaging in them?
A. Investing money in a real estate investment trust
B. Serving on a nonprofit board of directors
C. Teaching yoga at a local community center
D. Serving as a paid trustee on a family trust
3. Which of the following activities can only occur in an Office of Supervisory Jurisdiction?
A. Creation of research reports
B. Solicitation of customer orders
C. Initial completion of customer paperwork
D. Order execution
4. Ramsey Investments has just been informed that it has too many personnel (six) who have recently been associated with disciplined firms. An employer of 15 people in all, Ramsey wants to opt out. How many employees from disciplined firms must it fire and how quickly to fall below the threshold and avoid having to operate by the taping rule?
A. Two; 30 days
B. Three; 60 days
C. Three; 30 days
D. Six; 30 days
5. FINRA requires each member firm to set up a system of written supervisory controls designed to perform all of the following activities except:
A. Monitor the transmittal of customers’ funds and securities
B. Conduct annual compliance meetings with the firm’s principals and reps
C. Validate changes to customers’ investment objectives
D. Review all customer account activities
6. For representatives whose telemarketing activities are subject to the taping rule, when must the reports reviewing those taped conversations be submitted to FINRA?
A. Twice a year
B. Within 30 days of the end of each calendar quarter
C. Within 30 days of the end of each calendar year
D. At the close of each quarter