Exam 12 Wrong Answers

Question 1

The three steps in the money laundering process are

Answer 1

Placement, layering, integration

Question 2

Which of the following best defines an underwriter?

Answer 2

A broker/dealer that helps an issuer sell securities to the public

Question 3

Which of the following details is not found in a prospectus?

Answer 3

Future earnings projections

Question 4

For transactions of $10,000 or more, a broker/dealer is required to file a Currency Transaction Report (CTR) with the

Answer 4

Financial Crimes Enforcement Network

Question 5

Henry is setting up an investment advisory contract with William as his adviser. William has given Henry a couple of investment tips to encourage him to use his advisory services, but has not given Henry any written documentation. Which of the following is True regarding this situation?

Answer 5

William gave advice prior to the advisory contract being established which is a prohibited business practice

Question 6

Which of the following would be considered a reportable financial event for FINRA?

Answer 6

An associated person has been subject to disciplinary action involving forgery

Question 7

An investor holds 5,000 shares in a company that has just made a tender offer to buy a maximum of 1 million shares of its outstanding stock at $50 a share. If the company sets the minimum number of shares to be purchased at 900,000 and only 800,000 shares are tendered, how many of the investor’s shares will the company purchase?

Answer 7

0

Question 8

Which type of real estate limited partnership is the riskiest?

Answer 8

Raw land

Question 9

For stock trades settling regular way, the ex dividend date is

Answer 9

One day before the record date

Question 10

Which of the following is included in the definition of a broker/dealer?

Answer 10

Market makers

Question 11

All of the following are considered retail communications except

Answer 11

Promotional material sent to 5 customers in the past month

Question 12

An investor who is making his first purchase of a security for $1,500 in a new margin account is required to make a cash deposit of

Answer 12

$1,500

Question 13

Which of the following is a primary consideration in recommending a limited partnership (LP)?

Answer 13

Net worth

Question 14

Which of the following is not a provision of the Securities Exchange Act of 1934?

Answer 14

SEC’s right to establish margin requirements

Question 15

Which of the following would qualify as a suspicious transaction and would require filing of an SAR?

Answer 15

Multiple wire transfers from the account in the amount of $6,000

Question 16

Under which of the following scenarios would a registered representative be equipped to provide prior written notification to his firm?

Answer 16

Selling nonproprietary investment company products through his firm

Question 17

Which FINRA by-law sets guidelines for how broker/dealers conduct business with each other?

Answer 17

Uniform Practice Code

Question 18

The number of authorized shares can only be changed by which of the following?

Answer 18

The majority approval of the shareholders

Question 19

Which of these statements is incorrect concerning broker/dealers?

Answer 19

A firm can act in both the capacity of a broker and a dealer when selling securities from its own inventory