Series 7 Exam Practice Test 14: Rules and Regulations

1. Which TWO of the following are TRUE regarding a power of attorney?

I. A durable power of attorney cancels upon mental incompetence or death of the investor

II. A durable power of attorney only cancels upon death of the investor

III. A regular power of attorney cancels upon mental incompetence or death of the investor

IV. A regular power of attorney only cancels upon the death of the investor

2. All of the following must be included on a stock order ticket EXCEPT

3. Mutual funds must send out account statements to investors at least

4. Which of the following are subject to the FINRA 5 percent markup policy?

I. Principal transactions

II. Agency transactions

III. Riskless transactions

IV. Proceeds transactions

5. The ex-dividend date is __________ business day(s) before the record date.

6. Broker-dealers, investment companies, and investment advisers must have written policies designed to protect customers' records and information. This falls under:

7. Melste Corp. has just announced a 20-cent dividend to shareholders of record. If the record date is Friday, April 12th, when is the first day an investor can purchase the stock and not receive the dividend?

8. A violation in which a registered rep excessively trades a customer's account for the sole purpose of generating commissions is known as

9. According to FINRA rules, complaints must be maintained on records of brokerage firms for at least

10. According to FINRA rules, which TWO of the following are TRUE about ACATs?

I. When ACAT notices are received, firms have 1 business day to verify the customer's instructions

II. When ACAT notices are received, firms have 3 business days to verify the customer's instructions

III. Assets must be transferred within 3 business days after verification

IV. Assets must be transferred within 4 business days after verification

11. What is the minimum amount of assets an investor must have to establish a prime brokerage account?

12. According to FINRA rules, what is the maximum amount of retail persons a brokerage firm may send promotions to in a 30-day period for the promotions to be considered correspondence?

13. While starting your new career, you decide you want to moonlight as a bartender to help make ends meet. Who must be notified?

I. Your brokerage firm

II. FINRA

III. The SEC