Quiz 4

Which of these is TRUE related to Regulation M? *

It permits bids and purchases by distribution participants

It allows for passive market making

It permits stabilization of a new issue to protect its price from falling substantially

It was created to prohibit manipulative conduct by persons that have an interest in the outcome of an offering

Which is true? *

Sharing in profits and losses in a client’s account is always prohibited

Borrowing from or lending to a client is acceptable without firm notification if the customer is an immediate family member

If signs of a client’s diminished capacity are identified, a firm should proceed with disbursing funds while contacting the client’s designated trusted contact person

Generally, firms and RRs are prohibited from paying compensation to any person who is not FINRA registered

Which statements are TRUE regarding associated persons of a member firm? *

The SIE must be taken by all employees

Orders can only be accepted and entered by registered personnel

Registered representatives will be required to sit for two exams

An individual who fails an exam on the second attempt is required to wait 30 days before retesting

Which statements are TRUE regarding registration process *

If allowed through an Eligibility Proceeding, a statutory disqualified person may be hired by a member firm

Form U5 provides the reasons for the termination of a previously registered person

Only registered representatives are subject to fingerprint requirements

An RR who is serving in the military is still subject to the continuing education requirements

Which statements are TRUE regarding information available on BrokerCheck and the process of addressing complaints? *

BrokerCheck provides information on a registered person’s background and disciplinary history

Expungement is the process of removing complaints from a registrant’s history

An investor brochure describes the process by which FINRA handles complaints against individuals

FINRA requires customer complaints to be retained for four years

Which statements are TRUE regarding different types of portfolio strategies? *

A buy-and-hold strategy may result in portfolio drift

Indexing is utilized to take advantage of market inefficiencies

Sector rotation will try to anticipate the next move in the business cycle

Dollar cost averaging results in realized profits on the investment

The federal reserve board sets the Fed Funds Rate *

True

False

A value stock is one that is often overlooked by investors *

True

False

Defensive stocks tend to perform well during periods of contraction *

True

False

A micro-cap stock is considered less risky than a small-cap stock *

True

False

MM SIE Exam Prep