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Series 24 > Chapter Activities Chapters 1-8 > Flashcards

Chapter Activities Chapters 1-8 Flashcards

1
Q

True or false: A syndicate member may purchase the unsold shares to complete an all or none offering

A

False

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2
Q

True or false: the cost of printing prospectuses is considered compensation to the underwriter

A

False

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3
Q

True or false: the issuer reimbursing for underwriting expenses is considered underwriting compensation

A

True

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4
Q

True or false: a regulation A offering must be filed under FINRA’s corporate financing rule

A

True

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5
Q

True or false: a conflict of interest occurs if a member firm underwrites the stock of an affiliate

A

True

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6
Q

True or false: a qualified independent underwriter must be used to allow a firm with a conflict of interest to participate in the underwriting

A

False

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7
Q

Restricted period of one day

A

Stock with a ADTV of $100,000

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8
Q

Underwriters can remain active marketmakers during the restricted period

A

Actively traded shares

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9
Q

An underwriter may use this to cover the short position and a rising market

A

Green shoe clause

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10
Q

An underwriter may use this to cover the short position and a rising market

A

Green shoe clause

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11
Q

Cannot be higher than the public offering price

A

Stabilizing bid

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12
Q

A short sale is made within five business days of the pricing of a new issue

A

New issue cannot be purchased to cover a short position

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13
Q

Is the following acceptable according to FINRA’s new issue rule?

An RR, whose firm is an underwriter, purchases shares of a follow on offering

A

Yes

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14
Q

Is the following acceptable according to FINRA’s new issue rule?

The daughter of an RR purchases shares of an IPO through the broker dealer employing the RR

A

No

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15
Q

Is the following acceptable according to FINRA’s new issue rule?

An executive of a company that’s conducting a follow on offering

A

Yes

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16
Q

Is the following acceptable according to FINRA’s new issue rule?

The spouse of an RR whose firm is conducting an IPO for a company

A

No

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17
Q

Is the following acceptable according to FINRA’s new issue rule?

An account of which 5% is held by restricted persons

A

Yes

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18
Q

Is the following acceptable according to FINRA’s new issue rule?

The grandparents supported by an RR, whose firm is involved in an underwriting of stock

A

No

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19
Q

A change of certified accountant

A

Form 8-K

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20
Q

A companies annual report

A

Form 10-k

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21
Q

A group’s acquisition of more than 5% of a corporation’s equity securities

A

Schedule 13 D

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22
Q

A listing of securities held by an institutional investment manager

A

Schedule 13 F

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23
Q

A companies quarterly report

A

Form 10-Q

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24
Q

True or false: form 3 is filed when an individual acquires more than 10% of a companies voting securities

A

True

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25
Q

True or false: an insider must report purchases of the company stock on form 4 within 10 days

A

False

Form 3 is 10 days
Form 4 is 2 days

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26
Q

True or false: insiders can purchase calls and protective puts on the companies stock

A

True

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27
Q

True or false: employees of a broker dealer are not permitted to purchase stock on the restricted list

A

True

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28
Q

True or false: a watchlist is made available to all employees of a broker dealer

A

False

Only compliance gets the list

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29
Q

True or false: an insider can avoid insider violations under a 10b5 –1 plan

A

True

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30
Q

In an M&A (merger and acquisition) deal,
The transaction price must be ______

A

Fair and reasonable

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31
Q

In order to offer shares in a tender offer, an investor must have a _______

A

Net long position

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32
Q

When purchasing its own stock during normal business hours, a corporation may use _______

A

Only one broker dealer

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33
Q

Under SEC Rule 10b-18, actively traded stock cannot be purchased within the last ______ minutes of trading

A

10

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34
Q

If a tender offer is adjusted after it’s been open for 10 days, it must remain open for an additional________

A

10 business days

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35
Q

True or false : an analyst may participate in a roadshow

A

False

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36
Q

True or false :
A syndicate member is subject to a quiet period on an IPO of 10 calendar days

A

True

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37
Q

True or false : a manager on a follow on offering is subject to a three calendar day quiet period

A

True

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38
Q

True or false : a research analyst is never permitted to trade a subject security

A

False

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39
Q

True or false : a firms research report must disclose if it has received investment banking compensation on an offering by the subject company in the last 12 months

A

True

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40
Q

True or false : disclosures on third-party research are only required by the firm that created the report

A

False

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41
Q

True or false : disclosures on independent, third-party research are only required by the firm that created the report

A

True

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42
Q

True or false : quarterly reports are required of all analysts public appearances

A

True

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43
Q

Subject to form U4 and/or subject to statutory disqualification:

A felony conviction eight years ago

A

You need to disclose on U4 and you are subject to statutory as qualification

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44
Q

Subject to form U4 and/or subject to statutory disqualification:

A felony conviction 15 years ago

A

Needs to be on U4 and not subject to statutory disqualification

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45
Q

Subject to form U4 and/or subject to statutory disqualification:

A tax lien is placed against the RR

A

Disclose on form U4 but not subject to statutory disqualification

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46
Q

Subject to form U4 and/or subject to statutory disqualification:

The RR obtains a real estate license

A

Disclose on form U4 and not subject to statutory disqualification

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47
Q

Subject to form U4 and/or subject to statutory disqualification:

The RR’s spouse obtains an insurance license

A

Neither

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48
Q

Subject to form U4 and/or subject to statutory disqualification:

The RR commodity license has been suspended

A

Needs to be disclosed on form U4 and subject to statutory disqualification

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49
Q

Subject to form U4 and/or subject to statutory disqualification:

The RR has failed the firms drug test

A

Neither

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50
Q

Subject to form U4 and/or subject to statutory disqualification:

The RR’s primary residence is under foreclosure

A

Neither

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51
Q

Subject to form U4 and/or subject to statutory disqualification:

A lender forgives the debt after the RR enters into a short sale of his home

A

Subject to form U4 and not subject to statutory disqualification

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52
Q

For accusations against former employees, firms are required to amend form U5 for an _______________

A

Indefinite period

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53
Q

Final arbitration awards disciplinary actions are reported on _______

A

Form U6

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54
Q

An individuals approved registrations, pending customer initiated civil proceedings, and current employing firm can be found through ________

A

Broker check

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55
Q

Form U5 must be filed within _______ of an individuals registration being terminated

A

30 days

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56
Q

Taping must begin within _______ of notification by FINRA

A

60 days

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57
Q

An RR who has assumed a supervisory position must pass the appropriate principles exam within ____

A

120 days

58
Q

The CEO of a broker dealer is supervised by the ______

A

CCO

59
Q

Two months after leaving a firm, an RR joins the military. After being discharged, the individual could join a firm within ________ without having to retest.

A

25 months

60
Q

After receiving $15,000 in cash transaction, a broker dealer must file a _________ within ______

A

BCTR ; 15 calendar days

61
Q

The business continuity plan must include emergency contact information of _______

A

2 people

62
Q

True or false: a branch office that supervises a non-branch office must be inspected annually

A

True

63
Q

True or false: A branch office must be inspected periodically

A

False

64
Q

True or false: under certain conditions, one principal may supervise multiple OSJs

A

True

65
Q

True or false: form BR must be filed within 30 days if its branch moves locations

A

True

66
Q

True or false: a temporary location can affect 30 securities trades annually and be considered a non-branch office

A

False

67
Q

True or false: two brothers who live at separate residences may work together at one brothers primary residence

A

False

68
Q

True or false: if an employee of a broker dealer who works on a bank’s premises is fired by the broker dealer for cause, the broker dealer must file form U5 and notify the bank

A

True

69
Q

True or false: a foreign broker dealer may be offered an underwriting discount on sales outside of the United States

A

True

70
Q

True or false: a suspended firm may be invited to join an underwriting group if the suspension ends before the offering

A

False

71
Q

True or false: a foreign finder may solicit both US and non-US clients for US broker dealers

A

False

72
Q

True or false: a RR must have a joint account with a customer in order to share in the profit and losses with the customer

A

True

73
Q

True or false: a customer may be reimbursed for losses in her account

A

False

74
Q

True or false: an RR is permitted to give a client a gift that’s valued at $150

A

False

75
Q

True or false: an RR can attend a sporting event with a client and sit in seats valued at $250

A

True

76
Q

True or false: retail communications only include those at our sent to existing customers

A

False

New or existing

77
Q

True or false: an unregistered hedge fund with a value of less than $50 million is an institutional investor

A

False

Because it’s unregistered and less than $50 million

78
Q

True or false: chatting is considered interactive content and treated like correspondence

A

True

79
Q

True or false: it’s acceptable for a firm to use social media if it automatically deletes and erases the content

A

False

Needs to be retrievable, so it cannot be deleted

80
Q

True or false: entanglement involves a broker dealer preparing content for a third-party post

A

True

81
Q

True or false: linking to a third-party post about a charity event that sponsored by the firm is considered a retail communication

A

False

Because it’s charity, it is not business

82
Q

True or false: sharing a comment that’s posted on social media may be considered a testimonial

A

True

83
Q

True or false: unscripted public appearances are considered correspondence

A

False

84
Q

True or false: an initial purchase of open and fun shares may be done on margin

A

False

85
Q

True or false: a 12b – 1 fee may be used to cover legal and accounting expenses of an investment company

A

False

86
Q

True or false: class B shares do not qualify for breakpoints

A

True

87
Q

True or false: switching from one mutual fund to another mutual fund in the same complex of funds is a taxable event

A

True

88
Q

True or false: convincing a customer to purchase mutual fund shares based on an impending cash dividend is considered advantageous to the customer

A

False

89
Q

True or false: a broker dealer may prioritize the recommendations of specific mutual funds based on the brokerage business received from the investment company

A

False

90
Q

True or false: a wholesaler may directly compensate an agent for the sale of a funds shares

A

False

91
Q

True or false: 403(b) and 457 plans allow participants to contribute on a tax deductible basis

A

True

92
Q

Temporarily holding a customers position due to a net capital situation is known as ______

A

Parking

93
Q

_______ results when an associated person execute trades outside of his firm without the broker dealers written permission

A

Selling away

94
Q

An individual hired by a broker dealer must notify her employer of an existing brokerage account within ________ of being hired

A

30 days

95
Q

A RR lending money to an immediate family member is __________to notify his broker dealer

A

Not required

96
Q

A broker dealer, reimbursing and investment advisor for travel expenses to attend a securities conference is________

A

Unacceptable

97
Q

Complaint reports must be filed with FINRA ______

A

Quarterly

98
Q

Decisions are rendered by hearing panel for violations of FINRA rules within:

A

60 days

99
Q

Stature of limitations for claims under Coate of arbitration (timeframe)

A

Six years

100
Q

Arbitration awards are payable within

A

30 days

101
Q

Mutually agreeable settlement to a monetary dispute is called a

A

Mediation

102
Q

A R R is sending an email to 40 retail clients to announce a new closed and fun that’s being offered by her firm

A

This requires approval and filing

103
Q

A RR is sending a stocks research report to five retail clients with a note which recommends that they add the stocks to portfolios

A

Supervision and review

104
Q

A firm place an ad in a local newspaper to announce its relocation and it’s new address

A

Supervision and review

105
Q

An RR males, a mutual fund perspective to 10 clients and 20 prospects with a note indicating that he believes the fund is suitable for their particular investment objectives

A

Approval and filing

106
Q

A RR males and economic review, which was published by her research department, to 10 retail clients and 20 institutional clients

A

Supervision and review

107
Q

A firm may use an _________ to suggest a portfolios, asset allocation

A

Investment analysis tool

108
Q

A testimonial must disclose if the provider has been paid more than ______

A

$100

109
Q

According to the SEC, money market funds must use a _______yield, and bond funds must use a _______yield

A

7 day ; 30 day

110
Q

Rankings for equity funds based on total return must use periods covering _________

A

1, 5, 10 years

111
Q

Hypothetical illustrations used for variable life insurance policies must use a rate of return of and the rate of _____return no greater than ____

A

0% ; 12%

112
Q

The maximum underwriting compensation on the sale of a direct participation program is ____

A

10%

113
Q

In a rollup transaction, the value of the partnerships is determined by an _______and must be paid _______The partners rejected the proposal.

A

Independent, appraiser; regardless of whether

114
Q

Investors in a real estate investment trust made deduct up to ______% of the dividend income received

A

20

115
Q

The estimated value of a nontraded REIT may be disclosed on either a _____ or an _______ basis

A

Net investment ; appraised value

116
Q

A registered representative who sells a promissory note that’s not approved by a principal is guilty of _______

A

Selling away

117
Q

If the stock to which a reverse convertible is linked, closes at a price that’s below the knockout level, the issuing broker dealer will deliver the stock at the _______

A

Depreciated value (lower price)

118
Q

Aftermarket prospective delivery requirement for a non-listed follow on offering is

A

40 days

119
Q

The registration form for ADRs is called

A

Form F-6

120
Q

The registration form for U.S. IPOs is called

A

S-1

121
Q

Aftermarket prospective delivery requirement for exchange listed IPOs is

A

25 days

122
Q

The registration form for U.S. follow on offerings

A

Form S-3

123
Q

The registration form for foreign IPOs is

A

Form F-1

124
Q

Eligible to file an S – 3 ASR for a primary offering

A

Well known season issuer (WKSI)

125
Q

An offering made through a broker dealers online platform

A

Crowdfunding

126
Q

May only use a free writing prospectus after the SEC filing, but without a statutory prospectus

A

Seasoned issuer

127
Q

The offering price may change during the underwriting period

A

At the market offering

128
Q

Eliminates liability resulting from a fraudulent statement on a new issue

A

Section 11

129
Q

True or false: a corporation can only use the 147A exemption in the state of which its chartered

A

False

130
Q

True or false:
Regulation A Tier 2 offering of $75 million all allows up to $22.5 million to be sold by existing shareholders

A

True

131
Q

True or false: an individual with the net worth of $1 million (exclusive of primary residence) is considered an accredited investor, regardless of annual income

A

True

132
Q

True or false: a purchaser representative must be registered with FINRA

A

False

133
Q

True or false: control stock must be held for six months before it may be sold under rule 144

A

False

134
Q

True or false: an individual with a portfolio valued at more than $100 million is defined as a QIB

A

False

135
Q

True or false: a foreign offering of equity securities by reporting issuer can be resold in the US after six months

A

True

136
Q

True or false: a member of private placement must provide a disclosure document even if all investors are QIBs

A

False

137
Q

Which type of issuer does this apply to:

Company may use a free running perspective prior to SEC registration

A

Well known seasoned issuer (WKSI)

138
Q

Which type of issuer does this apply to:

Company has a public float of $150 million

A

Seasoned issuer

139
Q

Which type of issuer does this apply to:

Company may only use a free writing prospectus if it’s accompanied by a statutory prospectus

A

Unseasoned issuer

140
Q

Which type of issuer does this apply to:

Company has issued $1.5 billion in non-convertible debt in the last year

A

Well known seasoned issuer (WKSI)

141
Q

Which type of issuer does this apply to:

Company is eligible for an S-3 shelf registration, but must wait for SEC review and effective date

A

Seasoned issuer

Series 24 (4 decks)

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