chapter 8

Question 1

net capital

Answer 1

what’s left after selling all assets and paying off creditors.
it is intended to protect customers by requireing bd to have sufficient liquid capital on hand at all times

Question 2

what is responsible for preparation of firm’s financial stmt and net capital computations?

Answer 2

financial and operations principal (FINOP)

Question 3

carrying/executing/clearing broker dealer

Answer 3

• executes customer oders to buy and sell securites
• maintain custody of customer securites and other asests
• maintains recordkeeping of customer tranactions

Question 4

indroucing broker dealer

Answer 4

a firm that accepts customer orders to buy and sell securites but uses a carrying firm for clearing and custody

Question 5

min requirement for firms that carry customer accounts

Answer 5

250,000

Question 6

min requirement for firms that DO NOT carry customer accounts

Answer 6

100,000

Question 7

min requirement for firms engaged in market making or firm commitment underwritings

Answer 7

100,000

Question 8

min requirement for firms that make market with market value of more than $5 per share

Answer 8

2,500

Question 9

min requirement for firms that make market value for less than $5

Answer 9

1,000

Question 10

min requirement for mutual funds

Answer 10

25,000

Question 11

min requirement for dpp or merger and acquisition

Answer 11

5000

Question 12

fully disclosed introducing broker dealer that recieves but does not hold customer fund/securities

Answer 12

50,000

Question 13

fully disclosed introducing broker dealer that does not recieve customer funds or sec

Answer 13

5,000