S-12 Cheat Sheet 2026

The 30 highest-yield S-12 facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What ethical standard governs assessment and evaluation practice? → Adherence to the profession's code of ethics and applicable laws and regulations
2. How should professionals apply applied methods and techniques in daily practice? → Consistently integrate best practices into every aspect of professional work
3. How should professionals apply continuing education requirements in daily practice? → Consistently integrate best practices into every aspect of professional work
4. How should challenges in communication and documentation be addressed? → Apply systematic problem-solving, seek expert guidance when needed, and document decisions
5. What does a mutual fund’s expense ratio represent? → The fund's annual operating expenses as a percentage of its assets
6. What quality assurance measure supports communication and documentation? → Regular self-assessment, peer review, and adherence to established standards
7. A bond that can be redeemed by the issuer before its stated maturity date is known as a: → Callable bond
8. What ethical standard governs applied methods and techniques practice? → Adherence to the profession's code of ethics and applicable laws and regulations
9. Which US federal agency has primary regulatory authority over securities markets and broker-dealers? → The SEC (Securities and Exchange Commission)
10. FINRA is best described as: → A self-regulatory organization (SRO) that oversees broker-dealers
11. A registered representative receives a tip about a company from a friend at that company. Trading on this information would be an example of: → Insider trading
12. A rights offering allows existing shareholders to: → Purchase additional new shares at a discount before the public
13. What ethical standard governs professional standards and ethics practice? → Adherence to the profession's code of ethics and applicable laws and regulations
14. What ethical standard governs industry best practices practice? → Adherence to the profession's code of ethics and applicable laws and regulations
15. Which of the following is an example of a Self-Regulatory Organization? → FINRA (Financial Industry Regulatory Authority)
16. Which of the following is NOT a function of an SRO? → Setting monetary policy for the financial industry
17. What role does FINRA play in regulating broker-dealers? → It develops and enforces rules governing securities transactions
18. What is a key characteristic of a closed-end fund? → It is traded on exchanges at market prices.
19. When opening a new account, a broker-dealer must obtain which of the following from the customer? → Name, address, date of birth, and Social Security Number (or taxpayer ID)
20. How should professionals apply professional standards and ethics in daily practice? → Consistently integrate best practices into every aspect of professional work
21. During which phase of the business cycle is unemployment typically the highest? → Trough
22. Which of the following best describes the relationship between the SEC and SROs? → The SEC oversees and approves the rules set by SROs
23. What is the primary purpose of sending a trade confirmation to a customer? → To provide details of the executed transaction, including price, quantity, and commissions
24. Which report must broker-dealers file annually with the SEC and FINRA to demonstrate financial responsibility? → FOCUS Report (Financial and Operational Combined Uniform Single Report)
25. Which of the following is an example of a Self-Regulatory Organization? → FINRA (Financial Industry Regulatory Authority)
26. How should challenges in professional standards and ethics be addressed? → Apply systematic problem-solving, seek expert guidance when needed, and document decisions
27. The Securities Exchange Act of 1934 created which regulatory body to oversee the securities industry? → Securities and Exchange Commission
28. A married couple opens a joint account where each owns an undivided interest and ownership passes to the survivor upon death. This is called: → Joint tenants with right of survivorship (JTWROS)
29. A convertible bond allows the bondholder to: → Exchange the bond for a fixed number of common shares
30. What quality assurance measure supports continuing education requirements? → Regular self-assessment, peer review, and adherence to established standards