1. Who is responsible for creating the official statement for a municipal bond offering?

A. The issuer

B. Bond counsel for the underwriting syndicate

C. Bond counsel for the issuer

D. The underwriting syndicate

2. An RR must attempt to obtain all of the following information about customers, EXCEPT:

A. Their legal residence

B. Their educational background

C. Their tax ID number

D. Their occupation

3. An over-the-counter trader, when talking about the spread, is referring to the:

A. Difference between the bid and asked price of a stock at the current market

B. 5% markup which is allowable under the Conduct Rules

C. Difference between his cost price and his selling price

D. Amount of his markup from his cost price

4. Which of the following BEST describes the purpose of a hypothecation agreement in a margin account?

A. It describes the provisions of the loan that the customer is taking out for trading on margin.

B. It details the terms of the loan that the broker-dealer is taking out to comply with industry net capital requirements.

C. The agreement gives the broker-dealer permission to pledge a customers securities to a bank as collateral for a margin loan.

D. The agreement gives the broker-dealer permission to lend the customers securities to other investors who are executing short sales.

5. Which of the following is classified as a joint account?

A. An account shared between two brothers.

B. An account with third party trading authorization.

C. A spousal IRA.

D. An account established under UGMA/UTMA.

6. Relative to the 5% Markup Policy, which of the following statements is TRUE?

A. It is an SEC rule.

B. It serves as a guideline when determining a broker-dealer's percentage markup.

C. A broker-dealer must charge less than a 5% markup.

D. A broker-dealer may never charge more than a 5% markup.

7. Signatures of which tenants must be obtained when opening a joint account?

A. Only one, the tenant with the greatest percent interest in the account.

B. Only one, the tenant with authority to trade in the account.

C. All tenants, and all have authority to trade in the account.

D. All tenants, but only one has authority to trade in the account.

8. If a customer wishes to open an account to trade options, the account must be approved:

A. Prior to the time an initial order is accepted

B. 15 days prior to the time an initial order is accepted

C. Within 15 days of the acceptance of the initial order

D. No later than the time the confirmation is mailed to the customer for his initial transaction

9. A mother wants to gift money to her son. If she doesn't want the son to be able to use the money for living expenses, which of the following accounts is the most beneficial?

A. Trust account

B. 529 plan

C. Managed fee based account

D. Joint Account

10. Which of the following statements is NOT TRUE?

A. Clients must be notified of their free credit balances at least quarterly.

B. Depending on the record, SEC record retention rules generally require a firm to maintain required records for either three years, six years, or the life of the firm.

C. Broker-dealers must send customers balance sheets at least every six months.

D. SEC record retention rules generally require a firm to maintain records in an easily accessible location for the first three years.