Series 7 chapter 1 pt 1

Question 1

FINRA is what type of organization

Answer 1

self-regulatory organization

Question 2

General securities principles(series 24) May review and or approve

Answer 2

communications for all securities except options

Question 3

Limited securities principles(series 26) may only review and or approve

Answer 3

communications for investment company products

Question 4

Institutional communication

Answer 4

any written communication that is distributed or made available only to institutional investors but does not include a members firm’s internal communications

Question 5

Retail communication

Answer 5

any written communication that is distributed or made available to more than 25 retail investors within any 30 day calendar period.

Question 6

what is a retail investor

Answer 6

any person other than an institutional investor

Question 7

retail customer

Answer 7

any customer, existing or prospective that does not fit the definition of an institutional client.

Question 8

institutional communication used exclusively with following institutional investors

Answer 8

member firm or registered person of the member firm

bank
savings and loan
insurance company
registered investment company
investment advisor 
any entity with 50 million or more in total assets including natural persons
governmental entity
employee benefit plan that meets 

requirements of 403 b or section 475 and has at least 100 participants.

person acting solely of behalf of the institutional investor.

Question 9

correspondence

Answer 9

written or electronic communication that is distributed or made available to 25 or fewer retail investors within any 30 calendar day period.

Question 10

which communication group requires prior principal approval before use

Answer 10

Retail communication

Question 11

public appearance

Answer 11

participation in a any public speaking activity including electronic.

Question 12

does public appearance require preapproval

Answer 12

preapproval may be required but is not mandated.

Question 13

independently prepared reprint

Answer 13

consist of any article reprint that meets certain standards designed to ensure that the reprint was issued by an independent publisher and was not materially altered by the member.

can only be altered for factual errors and to make consistent with regulatory standards

Question 14

do independently prepared reprints need to be preapproved

Answer 14

must be preapproved by principal

Question 15

research reports

Answer 15

document prepared by an analyst or strategist typically as a part of a research team for an investment bank or broker-dealer

Question 16

electronic bulletin boards are considered what type of communication

Answer 16

retail

Question 17

generic advertising

Answer 17

promotes securities as an investment medium but does not refer to any specific security

Question 18

firms must have available for sale the type of security or service they advertise

true or false

Answer 18

true

Question 19

What requires that the communication was issued by an independent publisher and not materially altered by the member.

Answer 19

Independently prepared reprint

Question 20

Retail communications for investment companies that include a ranking or a comparison that is generally not published or is the creation of the investment company or the member must be

Answer 20

filed with FINRA at least 10 business days before first use

Question 21

Is a form letter to 20 prospective customers subject to preapproval by a principal

Answer 21

no

Question 22

if you are going to have a conference you must

Answer 22

complete a training program prior to the activity.

Question 23

ranking entity

Answer 23

refers to any entity that provides general information about investment companies to the public.

Question 24

Members may not use investment companies rankings in any retail communication other than

Answer 24

rankings created and published by ranking entities

or rankings created by an investment company or an investment company affiliate but based on standard performance measurements.

Question 25

bond mutual fund volatility rating

Answer 25

description issued by an independent third party relating to the sensitivity of the net asset value of a portfolio of an open end management investment company that invests in debt securities to changes in market conditions and the general economy.

Question 26

Money market funds which are composed of short term high quality debt instruments are

Answer 26

inappropriate for investors seeking long-term growth

Question 27

disclosure documents, such as statutory prospectus, summary prospectus, or statement of additional information are prepared by who

Answer 27

by the issuer and are not subject by the principal

Question 28

does a recruitment ad have to put out their name in the ad

Answer 28

no they can do a blind ad

Question 29

hypothetical illustrations showing assumed rates of return may be used

Answer 29

to demonstrate the performance of variable life policies.

Question 30

retail communications must be kept on file for

Answer 30

3 years

Question 31

an established firm must file investment company communications that include a ranking not independently prepared with finra within how long

Answer 31

within 10 days of first use.

Question 32

your established firm wishes to promote a mutual fund it markets to the public. What approval and filing requirements apply to this communication

Answer 32

it must be filed with finra at least 10 days before first use

it must be approved by a registered principal

Question 33

communications related to variable life and variable annuities must meet these specific standards.

Answer 33

communications must clearly describe the product as either variable life or a variable annuity

hypothetical illustrations showing assumed rates of return may be used to demonstrate the performance of variable life policies

communications regarding single premium variable life may only emphasize investment features of this product if an adequate explanation of the life insurance features is also provided