Last Updated: Jul 28, 2026
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| Section | Weight | Objectives |
|---|---|---|
| Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions | 11% | - Trade settlement and confirmation rules - Order types and execution procedures - Regulatory requirements for transaction processing |
| Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives | 9% | - Account types and documentation requirements - Financial profile, risk tolerance, and investment objectives - Suitability rules and regulatory compliance |
| Seeks Business for the Broker-Dealer from Customers and Potential Customers | 7% | - Standards for advertising and public communications - Product-specific disclosures and regulatory requirements - Customer communication and solicitation rules |
| Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records | 73% | - Recordkeeping and regulatory reporting - Options and derivative products - Debt securities and government obligations - Margin accounts and taxation - Direct participation programs - Equity securities - Municipal securities - Investment companies, ETFs, and variable annuities |
1. According to FINRA Conduct Rules, a party judged guilty of a rule infraction by the District Business
Conduct Committee may then appeal to:
A) the public court system
B) the FINRA Board of Arbitration
C) the SEC
D) the FINRA Board of Governors
2. Bubba is concerned about the liquidity of a possible municipal bond purchase. He is therefore probably
most interested in the rating supplied by which of the following?
A) the bond buyers
B) Dow Jones
C) White's
D) Moody's
3. Reinvestment of dividends and distributions from investment company shares:
A) permits deferment of all federal income taxes on dividends and distributions until the investment is
liquidated
B) results in compounding of shares, which can be an important factor for investment growth
C) all of the above
D) makes possible the purchase of fund shares at a price below net asset value
4. Which of the following persons would consider annual reports of a corporation as the most important
factor in making investment decisions?
A) a chartist
B) a fundamental analyst
C) a technical analyst
D) a follower of the Dow theory
5. Revenue bonds are least likely to provide constructions funds for:
A) a public school
B) a pollution control facility
C) an airport
D) a toll highway
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: A |
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