SIE Understanding Trading, Customer Accounts and Prohibited Activities Practice Test 2

1. Which of the following is a characteristic of a retirement account?

A. It is opened by a person who is retired.

B. It is opened by a person who is an employee of a corporation.

C. It is opened by a person who owns an annuity to place in the account.

D. It is opened by a person who desires tax deferral on the investment return.

2. Which of the following describes money laundering?

A. Concealing the source of illegally-obtained money

B. Embezzling money from an employer

C. Extortion through threatened exposure of another person's misdeeds

D. Bribery of an elected official through hidden political contribution

3. Which of the following reports is to be submitted by a financial firm to the FinCEN within thirty days of observing a person's suspicious action?

A. Suspicious Activity Report

B. Currency Transaction Report

C. OFAC Report

D. Customer Account Statement

4. Which of the following is true of the books and records requirements for member broker-dealers?

A. Requirements must allow for self-regulatory organizations to carry out examinations of broker-dealers.

B. Data must be kept on electronic media.

C. Records must be kept ten years, unless specifically designated for a different time frame.

D. A registered principal must regularly sign an inventory of records.

5. Which of the following best describes nonpublic personal information (NPI)?

A. Personally identifiable information that would be obtained in the course of serving a financial services consumer, but which may be publicly available

B. Personally identifiable information that is publicly available, and that is kept in a company's nonpublic storage area

C. Personally identifiable financial information that a financial firm obtains in the process of serving a consumer with a financial product or service unless that information is otherwise publicly available

D. Personally identifiable financial information that specifically relates to a financial service consumer's real estate property purchase price

6. According to FINRA Rule 2210 – Communications with the Public, which of the following is sent to twenty-five or less retail investors within a thirty-day calendar period?

A. Institutional communication

B. Proxy information

C. Retail communication

D. Correspondence

7. Which is the highest obligation of a securities professional?

A. Most favorable price

B. Suitability

C. Best interest

D. Highest return on investment

8. Which of the following is the act of using improper methods to increase or decrease the market price of a security or somehow affect the actions of other investors for personal gain?

A. Market manipulation

B. Insider trading

C. Freeriding

D. Backing away

9. Which of the following types of market manipulation is also referred to as "churning"?

A. Market rumors

B. Pump-and-dump

C. Front running

D. Excessive trading

10. Which of the following involves the inappropriate use of material nonpublic information?

A. Intimidation

B. Borrowing from customers

C. Insider trading

D. Exploitation of specified adults

SIE Understanding Trading, Customer Accounts and Prohibited Activities Practice Test 2

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