Stock Broker Cheat Sheet 2026
The 30 highest-yield Stock Broker facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.
- A broker-dealer that holds customer securities and cash must comply with which rule regarding segregation of customer assets? → Rule 15c3-3
- The subtotal that emerges from removing cost of goods sold and operating expenses from sales on a company's income statement is: → Operating profit
- What is the 'code of conduct' that all FINRA-registered representatives must adhere to regarding conflicts of interest? → Disclose and manage all material conflicts of interest with customers fairly
- Which type of annuity provides a guaranteed fixed payment amount throughout the payout period? → Fixed annuity
- What does 'churning' refer to in the context of broker-dealer regulations? → Excessive trading in a customer account to generate commissions
- What is a 'Treasury Inflation-Protected Security' (TIPS) and how does it protect investors? → A Treasury bond whose principal adjusts with the CPI, protecting purchasing power
- Which strategy profits most in a neutral market where the stock price remains flat near the strike price? → Short straddle
- What is 'beta' as a measure of risk in securities analysis? → A measure of a security's price volatility relative to the overall market
- A consumer who owns 100 shares of stock may be protected by: → Buying a put
- A protective put strategy is primarily used to: → Hedge against a drop in value of a stock you already own
- What is a 'circuit breaker' in US equity markets? → A regulatory mechanism that halts trading when major indexes fall by specified percentages
- Which of the following measures is the greatest for a bond investor to decrease credit risk while also guarding against buying power risk? → Invest in bonds from many different issuers
- Which of the following types of investors are considered institutional? → All of the above
- What is the 'T+1' settlement standard for US equity trades? → Trades settle (transfer of securities and cash) one business day after the trade date
- Which type of option gives the holder the right, but not the obligation, to SELL shares at a specified strike price? → Put option
- What does 'in the money' mean for a call option? → The strike price is below the current market price
- Which mutual fund share class typically has no front-end sales load but charges a contingent deferred sales charge (CDSC) if sold within a certain period? → Class B shares
- What does 'out of the money' mean for a put option? → The current stock price is above the strike price
- What is a money market instrument, and which of the following is an example? → A short-term debt security; Treasury bills (T-bills)
- What is a call option? → The right to buy shares at a specified strike price
- What is the minimum net capital requirement concept that prevents broker-dealers from operating with excessive debt relative to assets? → Net capital rule
- An American Depositary Receipt (ADR) allows US investors to do which of the following? → Invest in foreign company shares traded on US exchanges in US dollars
- Which regulation governs the extension of credit by broker-dealers to customers purchasing securities on margin? → Regulation T
- What is a convertible bond? → A bond that can be exchanged for a set number of the issuer's common shares
- What does the options Greek 'delta' measure? → The rate of change in an option's price for a $1 move in the underlying stock
- Under SEC Regulation S-P, broker-dealers must provide customers with privacy notices describing how the firm handles which type of information? → Non-public personal information
- Under FINRA Rule 2010, members must observe 'high standards of commercial honor and just and equitable principles of trade,' which is also known as what? → The just-and-equitable rule or standards of commercial honor
- Convertible preferred stock's price is more influenced by _______________ and less by _______________ than other types of preferred stock. → The price of the common stock; interest rates
- What is a 'limit order' and what is its key advantage over a market order? → An order to buy or sell at a specified price or better; guarantees price but not execution
- In a Short Margin Account, what is the equity formula? → + Credit - Short Market Value = Equity
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