STOCKBROKER Flashcards

How often must existing margin account holders get the Margin Disclosure Statement?

Answer: Annually

Explanation: Margin customers must get the Margin Disclosure Statement at least once a year.

Which of the following statements is true about people who will work as research analysts?

Answer: They must be registered as general securities representatives and pass a research analyst qualification examination.

Explanation: Research analysts must first register as general securities representatives and then pass a research analyst qualification examination.

In a Short Margin Account, what is the equity formula?

Answer: + Credit - Short Market Value = Equity

Explanation: Equity in a Short Margin Account is calculated as follows: Equity = Credit Balance - Short Market Value

Which of the following types of investors are considered institutional?

Answer: All of the above

Explanation: Institutional investors include: Governmental entities. Employee benefit plans that meet the requirements of Section 403(b) or Section 457 of the Internal Revenue Code and have at least 100 participants. Qualified plans that meet the requirements of Section 3(a)(12)(C) of the Exchange Act and have at least 100 participants.

The Securities Act of 1933 is primarily concerned with the registration of:Which of the following is defined as "advertising" in the Securities Act of 1933?

Answer: Options website

Explanation: Optional rationale Any sales content that reaches a public audience through a mass medium, such as websites, newspapers, periodicals, magazines, radio, television, telephone recordings, motion pictures, billboards, signs, or sales communications to the public, is described as advertising. Correspondence is a letter sent to a customer, whereas sales literature is characterized as an options worksheet. The Options Disclosure Document (ODD) is the mandatory offering information that must be provided to customers when they open an options account and any options communication that makes a recommendation, indicates prior performance, or makes a prognosis.

What are the three requirements for general telemarketing?

Answer: Time of Day Restriction, National Do-Not-Call List, and Firm-Specific Do Not Call List

Explanation: The three General Telemarketing Requirements are the Time of Day Restriction, the Firm-Specific Do-Not-Call List and the National Do-Not-Call List.

Except for the following, all of the following statements about the municipal financial advisor in competitive bid underwritings are true:

Answer: Financial advisor will be the underwriter of the offering

Explanation: Municipal financial advisors are municipal broker-dealers who are knowledgeable about the municipal market. The financial advisor receives a fee from the municipality for assisting in creating a competitive bid offering. The firm acting as the advisor tries to get the issuer the best interest rate possible. If the underwriter is the same firm, there is an inherent conflict of interest. As the underwriter, the firm wants the issuer to pay the maximum interest rate possible, making it simpler to sell the issuer. The financial adviser cannot also be the underwriter in the transaction, which applies to competitive bids and negotiated offerings.

If a registered principal or registered representative's registration has been cancelled or terminated for a period of ___________ or more, he or she must repeat the qualifying exam.

Answer: 2 years

Explanation: If your registration has been revoked or canceled for more than two years, you must retake the qualifying exam.

A consumer who owns 100 shares of stock may be protected by:

Answer: Buying a put

Explanation: The easiest way to hedge a long stock position against a market downturn is to buy a put. If the market declines, the holder of a long put option can put (sell) the stock at the exercise price, shielding the stock position from market risk.