Chapter 2 Practice Question Answers
1. Answer: C. FINRA requires that the representative learn about a new customer’s identity, investment experience, financial status, and investment objectives. The customer’s educational background is not particularly relevant here and is not required information for a new account form.
2. Answer: B. Customer account records must be updated at least every three years.
3. Answer: D. A customer’s signature is not required on the new account form. According to the Patriot Act, the full name, date of birth, and Social Security number or tax ID is required to open an account. If the Social Security number has been applied for but not yet received, the firm may open the account, but they must obtain the SSN in a reasonable time frame.
4. Answer: C. Parties to a joint tenants in common, or JTIC, account specify a percentage split among them when opening the account, and they have no rights of survivorship. So if William were to die, his percentage would be passed on to his estate in accordance with his will. If William and Ruth want the assets in the account to go to each other should one die, then they want a joint tenants with rights of survivorship (JTWROS) account.
5. Answer: C. Regulation S-P protects investors from potential id