Chapter 2 Practice Questions
1. A new customer account form must include all of the following information except:
A. The customer’s date of birth
B. The customer’s net worth
C. The customer’s educational background
D. The name of the representative in charge of the customer’s account
2. Customer account records must be updated at least every:
A. Six years
B. Three years
C. Year
D. Six months
3. Ellen called her broker from her nuclear bunker on a secure line. She is not too crazy about giving out information over the phone, but she would like to open an account. Which of the following is not required to open a new account?
A. Full name
B. Date of birth
C. Social Security number
D. Her signature
4. William and Ruth share a joint tenants in common brokerage account. This account has all the following characteristics except:
A. The certificates of securities sold from the account must be signed by both parties.
B. The account can only be closed by both parties.
C. Both owners always have rights to all of the account’s assets.
D. Either party can trade in the account without getting explicit written permission from the other party.
5. Regulation S-P helps protect customers from:
A. Recommendations to purchase high-risk securities such as S&P 500 index derivatives
B. Abusive commissions and sales charges
C. Having their private information misused
D. Money laundering
6. Which of the following custodian/minor combinations is possible for a UGMA account?
A. Betty White FBO Shelly Smith
B. James and Betty White FBO Bill Smith
C. James and Betty White FBO James White Jr. and Mary White
D. James White FBO James White Jr. and Mary White
7. A broker may effect a transaction for a customer without that customer’s permission for the specific transaction:
A. When the customer is out of the country and unable to access his account
B. Any