FINRA Securities Industry Essentials

Question 1

What is the primary role of FINRA?

Accepted Answer

Regulate the securities industry

Answer

Issue government bonds

Answer

Determine interest rates

Answer

Oversee federal monetary policy

Question 2

Which financial instrument represents ownership in a company?

Accepted Answer

Stocks

Answer

Bonds

Answer

Mutual Funds

Answer

Options

Question 3

What does the Securities Act of 1933 primarily regulate?

Accepted Answer

Issuance of new securities

Answer

Secondary market transactions

Answer

Banking regulations

Answer

Futures trading

Question 4

Which organization insures customer accounts against brokerage firm failures?

Accepted Answer

SIPC

Answer

FDIC

Answer

SEC

Answer

FINRA

Question 5

What is the function of a market maker?

Accepted Answer

Provide liquidity by buying and selling securities

Answer

Regulate securities transactions

Answer

Issue corporate bonds

Answer

Manage mutual funds

Question 6

What is a key difference between common and preferred stock?

Accepted Answer

Common stock has voting rights, preferred does not

Answer

Preferred stock offers no dividends

Answer

Common stock is more expensive

Answer

Preferred stock is riskier