Good luck and read through the questions carefully before attempting to answer.

1. Which of the following option positions would represent the most risk to a customer?
   a. Net debit spread
   b. Net credit spread
   c. Long call
   d. Short straddle
   
   
2. A customer has $485,000 securities and $135,000 cash in his account. If the firm was to go bankrupt, what amounts would SIPC cover?
   a. $485,000 securities and $135,000 cash
   b. $400,000 securities and $100,000 cash
   c. $500,000 securities and no cash
   d. $365,000 securities and $135,000 cash
   
   
3. Diane Lee has a stock certificate bearing the name: "Diane E. Lee." How must she sign/endorse the stock certificate?
   a. Diane Lee
   b. D. Lee
   c. Diane E. Lee
   d. Whatever her legal signature is.
   
   
4. The Securities Act of 1933 pertains to which securities market?
   a. Primary
   b. Secondary
   c. Third
   d. Fourth
   
   
5. A customer is long 200 shares of stock. There is a 3 for 2 split. How many additional shares will he receive?
   a. 66
   b. 100
   c. 300
   d. 600
   
   
6. If there is no activity in a client's account, how often must the brokerage firm send a statement to its customer?
   a. Monthly
   b. Quarterly
   c. Semi-annually
   d. Yearly
   
   
7. The Fiscal Policy of the United States Government is set by which of the following?
   a. Federal Reserve system
   b. United States Treasury Department
   c. Office of Management and Budget
   d. The Congress of the United States
   
   
8. A customer previously mentioned that he would like to sell a stock at $50, but did not give the RR written discretion. The stock goes up to $50 but the customer is on vacation and cannot be reached. The RR should:
   a. Sell the stock at $50
   b. Talk to the customer s wife and get her approval
   c. Do nothing at all until he contacts the customer
   d. Use his discretion, doing what he considers to be best for the customer
   
   
9. Which of the following does not apply as far as trading stocks on the floor of the NYSE is concerned?
   a. Time priority
   b. Price precedence
   c. Time and price parity
   d. Premiums
   
   
10. An RR who has limited trading authorization in a customer's account may do which of the following?
    a. Deduct a monthly fee for handling the account.
    b. Buy and sell stocks, bonds, warrants, and mutual funds
    c. Transfer securities in and out of the client's account.
    d. Pay money out to a third party.
    
    

Answer Key

Additional Sample Questions