S7 Customer Accounts Quiz

Which of the following funds is least suitable for a retiree in need for a steady stream of income?

• bond fund

• sector fund

• balanced fund

• growth and income fund

A corporation has an account at a member firm. The documentation that the corporation provided which lists the people who are permitted to trade on its behalf can be found in the corporation's

• registration paperwork filed with the SEC

• corporate resolution

• articles of incorporation

• brochures, as well as on the "Investors" page of its website

All of the following are true if a client wants to open a discretionary account EXCEPT:

• The firm must receive a signed trading authorization from the client.

• The firm must obtain an annual renewal of the authority in writing

• The firm must conduct frequent supervisory reviews of the account.

• That every discretionary order must be marked as such

When member firms execute customer securities transactions, the member firms must disclose all of the following on the customer confirmation EXCEPT that they

• acted as a customer's agent

• acted as an agent for another person

• are a market maker in the security

• are subject to FINRA inquiry

Which security has the lowest degree of capital risk?

• Warrants

• Options

• Common Stock

• Corporate Bonds

An investor who owns $10,000 of U.S. Treasury bonds would be primarily concerned with which of the following risks?

• capital risk

• default risk

• purchasing power of risk

• financial risk

Sam is buying stock in his cash account, which will be given to his nephew, who is a minor. The gift is considered to be completed when

• the securities have been paid for

• settlement date arrives

• the securities have been registered

• the order is executed

At what point in time is it necessary under SEC guidelines to prepare an order ticket for a transaction?

• This needs to only be performed on the settlement date of the transaction

• This must be performed no later than trade date plus one business day

• This must be performed prior to the transaction's execution

• This must be performed following the transaction's execution

• I only

• I, II

• II, III

• I, II, III

All of the following would be considered a "customer" subject to the FINRA Rule 2111 requirement of suitability for recommendations EXCEPT:

• A person with brokerage account at the broker dealer firm

• A person who purchases a security through a broker dealer where the security will be held by the issuer but the broker dealer will be compensated for the sale

• A potential customer who then becomes a customer

• An institutional customer