Last Updated: May 31, 2026
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1. For an FINRA member firm to exercise discretionary power in any customer account requires written
authorization by that customer except when:
A) only time and price of execution are involved
B) the customer is a spouse of the registered representative
C) both B and C
D) the customer has given an oral approval after the transaction
2. To accommodate a customer's order to buy an over-the-counter stock, a broker/dealer is permitted to:
A) sell him shares from the firm's inventory
B) sell these shares short to the customer
C) act as agent on this transaction
D) all of the above
3. An investment company incapable of issuing a long-term debt instrument is:
A) a unit investment trust
B) an open-end investment company
C) a closed-end investment company
D) a face-amount certificate company
4. With the Regulation T requirement at 50%, a firm wishes to impose house rules that require a minimum
equity of 40%. Which of the following is true?
A) this cannot be implemented because the level is below Reg T
B) this cannot be implemented since maintenance requirements are only 25% of equity for long positions
C) this action must be approved by the FRB and FINRA
D) this is permissible
5. A mutual fund characterized by a modest sales charge and an investment in a fixed portfolio of municipal
securities is a:
A) management company
B) unit investment trust company
C) face-amount certificate company
D) open-end or closed-end company
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: D | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: B |
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