Securities Industry Essentials Exam Free Preview
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Question 1 of 20
1. Question
Which of the following statement is/are true about “Joint Back Office Requirement”?
I. Participants must be registered as a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934
II. Meet and maintain the ownership standards established by the carrying broker-dealer
III. Meet and maintain a minimum account equity requirement of $1,000,000 with each clearing broker-dealer where an account of the JBO Participant is carried
IV. Participants must be registered under the Bank Secrecy ActCorrect
FINRA rule no 4210. Margin Requirements
An arrangement may be established between two or more registered broker-dealer pursuant to Regulation T Section 220.7, to form a joint back office (“JBO”) arrangement for carrying and clearing or carrying accounts of participating broker-dealers. Members must provide written notification to FINRA prior to establishing a JBO arrangement.
(i) A carrying and clearing or carrying member must:
a. maintain a minimum tentative net capital (as such term is defined in SEA Rule 15c3-1) of $25 million as computed pursuant to SEA Rule 15c3-1 and, if applicable, Rule 4110(a), except that a member whose primary business consists of the clearance of options market-maker accounts may carry JBO accounts provided that it maintains a minimum net capital of $7 million as computed pursuant to SEA Rule 15c3-1 and, if applicable, Rule 4110(a). In addition, the member must include in its ratio of gross options market maker deductions to net capital required by the provisions of SEA Rule 15c3-1 and, if applicable, Rule 4110(a), gross deductions for JBO participant accounts. Clearance of options market maker accounts shall be deemed a broker-dealer’s primary business if a minimum of 60 percent of the aggregate deductions in the above ratio is options market maker deductions. In the event that a carrying and clearing, or a carrying member’s tentative net capital (as such term is defined in SEA Rule 15c3-1), or net capital, respectively, has fallen below the above requirements, the firm shall: 1. promptly notify FINRA in writing of such deficiency, 2. take appropriate action to resolve such deficiency within three consecutive business days, or not permit any new transactions to be entered into pursuant to the JBO arrangementIncorrect
FINRA rule no 4210. Margin Requirements
An arrangement may be established between two or more registered broker-dealer pursuant to Regulation T Section 220.7, to form a joint back office (“JBO”) arrangement for carrying and clearing or carrying accounts of participating broker-dealers. Members must provide written notification to FINRA prior to establishing a JBO arrangement.
(i) A carrying and clearing or carrying member must:
a. maintain a minimum tentative net capital (as such term is defined in SEA Rule 15c3-1) of $25 million as computed pursuant to SEA Rule 15c3-1 and, if applicable, Rule 4110(a), except that a member whose primary business consists of the clearance of options market-maker accounts may carry JBO accounts provided that it maintains a minimum net capital of $7 million as computed pursuant to SEA Rule 15c3-1 and, if applicable, Rule 4110(a). In addition, the member must include in its ratio of gross options market maker deductions to net capital required by the provisions of SEA Rule 15c3-1 and, if applicable, Rule 4110(a), gross deductions for JBO participant accounts. Clearance of options market maker accounts shall be deemed a broker-dealer’s primary business if a minimum of 60 percent of the aggregate deductions in the above ratio is options market maker deductions. In the event that a carrying and clearing, or a carrying member’s tentative net capital (as such term is defined in SEA Rule 15c3-1), or net capital, respectively, has fallen below the above requirements, the firm shall: 1. promptly notify FINRA in writing of such deficiency, 2. take appropriate action to resolve such deficiency within three consecutive business days, or not permit any new transactions to be entered into pursuant to the JBO arrangement -
Question 2 of 20
2. Question
Which of the following statement is/are true about exempted securities?
I. financial instruments that do not need to be registered with the Securities Exchange Commission (SEC)
II. financial instruments that are registered under the Bank Secrecy Act
III. these securities are backed by the government
IV. carry a lesser risk than securities offered by public companiesCorrect
Rule no 4210. Margin Requirements
Exempt securities are financial instruments that do not need to be registered with the Securities Exchange Commission (SEC). They are generally backed by the government and may carry a lesser risk than securities offered by public companies. Exempt securities, under Section 4 of the Securities Act of 1933, are financial instruments that carry government backing and typically have a government or tax-exempt statusIncorrect
Rule no 4210. Margin Requirements
Exempt securities are financial instruments that do not need to be registered with the Securities Exchange Commission (SEC). They are generally backed by the government and may carry a lesser risk than securities offered by public companies. Exempt securities, under Section 4 of the Securities Act of 1933, are financial instruments that carry government backing and typically have a government or tax-exempt status -
Question 3 of 20
3. Question
Which of the following statement is/are true about the broad index stock group?
I. Index stock group consisting of 25 or more stocks
II. Value of stocks are determined by current market prices
III. Value of the stocks is determined by current share prices
IV. Indexes are established and maintained by financial services or data companiesCorrect
Rule no 4210. Margin Requirements
The term “broad index stock group” means an index stock group of 25 or more stocks whose inclusion and relative representation in the group is determined by the inclusion and relative representation of their current market prices in a widely disseminated stock index reflecting the stock market as a whole or an inter-industry sector of the stock market.Incorrect
Rule no 4210. Margin Requirements
The term “broad index stock group” means an index stock group of 25 or more stocks whose inclusion and relative representation in the group is determined by the inclusion and relative representation of their current market prices in a widely disseminated stock index reflecting the stock market as a whole or an inter-industry sector of the stock market. -
Question 4 of 20
4. Question
Which of the following statement is/are true regarding “put”?
I. A put is an options contract that gives the owner the right, but not the obligation, to sell a certain amount of the underlying asset
II. Puts are traded on various underlying assets, which can include stocks, currencies, commodities, and indexes
III. The value of a put option appreciates as the price of the underlying stock depreciates relative to the strike price
IV. the buyer of a put option believes that the underlying stock will drop below the market price before the expiration dateCorrect
Rule no 2360. Options
Put — The term “put” means an option contract under which the holder of the option has the right, in accordance with the terms of the option, to sell the number of units of the underlying security or deliver a dollar equivalent of the underlying index covered by the option contract. In the case of a “put” issued by The Options Clearing Corporation on common stock, it shall mean an option contract under which the holder of the option has the right, in accordance with terms of the option, to sell to The Options Clearing Corporation the number of units of the underlying security covered by the option contract or to tender the dollar equivalent of the underlying index.Incorrect
Rule no 2360. Options
Put — The term “put” means an option contract under which the holder of the option has the right, in accordance with the terms of the option, to sell the number of units of the underlying security or deliver a dollar equivalent of the underlying index covered by the option contract. In the case of a “put” issued by The Options Clearing Corporation on common stock, it shall mean an option contract under which the holder of the option has the right, in accordance with terms of the option, to sell to The Options Clearing Corporation the number of units of the underlying security covered by the option contract or to tender the dollar equivalent of the underlying index. -
Question 5 of 20
5. Question
Which of the following statements is/are true regarding cash flows?
I. Company’s ability to create value for shareholders is determined by its ability to generate positive cash flows
II. Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business
III. Positive cash flow indicates that a company’s liquid assets are decreasing
IV. Assessing the amounts, timing and uncertainty of cash flows is one of the most basic objectives of financial reportingCorrect
Rule no 2130. Direct Participation Program
Cash flow — cash funds provided from operations, including lease payments on net leases from builders and sellers, without deduction for depreciation, but after deducting cash funds used to pay all other expenses, debt payments, capital improvements and replacements.Incorrect
Rule no 2130. Direct Participation Program
Cash flow — cash funds provided from operations, including lease payments on net leases from builders and sellers, without deduction for depreciation, but after deducting cash funds used to pay all other expenses, debt payments, capital improvements and replacements. -
Question 6 of 20
6. Question
Which of the following statement is/are true regarding SEC?
I. The SEC can bring only civil actions against lawbreakers, but works with the Justice Department on criminal cases
II. After the Great Recession, the SEC recovered close to $1 billion in penalties and other damages as a result of its prosecutions
III. The Securities and Exchange Commission (SEC) is responsible for overseeing the securities markets and protecting investors
IV. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the marketCorrect
Rule no 0160. Definitions
The U.S. Securities and Exchange Commission (SEC) is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of the securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States. After the Great Recession, the SEC recovered close to $4 billion in penalties and other damages as a result of its prosecutionsIncorrect
Rule no 0160. Definitions
The U.S. Securities and Exchange Commission (SEC) is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of the securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States. After the Great Recession, the SEC recovered close to $4 billion in penalties and other damages as a result of its prosecutions -
Question 7 of 20
7. Question
Which of the following statement is/are true regarding delta neutral?
Correct
Rule no 2360. Options
Delta Neutral — The term “delta neutral” describes an equity options position that has been fully hedged, in accordance with a Permitted Pricing Model as defined in paragraph (b)(3)(A)(ii)b. with a portfolio of instruments including or relating to the same underlying security to offset the risk that the value of the equity options position will change with incremental changes in the price of the security underlying the options position.Incorrect
Rule no 2360. Options
Delta Neutral — The term “delta neutral” describes an equity options position that has been fully hedged, in accordance with a Permitted Pricing Model as defined in paragraph (b)(3)(A)(ii)b. with a portfolio of instruments including or relating to the same underlying security to offset the risk that the value of the equity options position will change with incremental changes in the price of the security underlying the options position. -
Question 8 of 20
8. Question
What are the options for reporting of options positions?
I. Conventional options
II. Standardized options
III. Specific options
IV. Conventional and standardizedCorrect
Rule no 2360. Options
A)(i)a. Conventional Options
Each member shall file or cause to be filed with FINRA a report with respect to each account in which the member has an interest, each account of a partner, officer, director or employee of such member, and each customer, non-member broker, or non-member dealer account, which, acting alone or in concert, has established an aggregate position of 200 or more option contracts (whether long or short) of the put class and the call class on the same side of the market covering the same underlying security or index, combining for purposes of this subparagraph long positions in put options with short positions in call options and short positions in put options with long positions in call options, provided, however, that such reporting with respect to positions in conventional index options shall apply only to an option that is based on an index that underlies, or is substantially similar to an index that underlies, a standardized index option.
b. Standardized Options
Each member that conducts a business in standardized options but is not a member of the options exchange upon which the standardized options are listed and traded shall file or cause to be filed with FINRA a report with respect to each account in which the member has an interest, each account of a partner, officer, director or employee of such member, and each customer, non-member broker, or non-member dealer account, which, acting alone or in concert, has established an aggregate position of 200 or more option contracts (whether long or short) of the put class and the call class on the same side of the market covering the same underlying security or index, combining for purposes of this subparagraph long positions in put options with short positions in call options and short positions in put options with long positions in call options.Incorrect
Rule no 2360. Options
A)(i)a. Conventional Options
Each member shall file or cause to be filed with FINRA a report with respect to each account in which the member has an interest, each account of a partner, officer, director or employee of such member, and each customer, non-member broker, or non-member dealer account, which, acting alone or in concert, has established an aggregate position of 200 or more option contracts (whether long or short) of the put class and the call class on the same side of the market covering the same underlying security or index, combining for purposes of this subparagraph long positions in put options with short positions in call options and short positions in put options with long positions in call options, provided, however, that such reporting with respect to positions in conventional index options shall apply only to an option that is based on an index that underlies, or is substantially similar to an index that underlies, a standardized index option.
b. Standardized Options
Each member that conducts a business in standardized options but is not a member of the options exchange upon which the standardized options are listed and traded shall file or cause to be filed with FINRA a report with respect to each account in which the member has an interest, each account of a partner, officer, director or employee of such member, and each customer, non-member broker, or non-member dealer account, which, acting alone or in concert, has established an aggregate position of 200 or more option contracts (whether long or short) of the put class and the call class on the same side of the market covering the same underlying security or index, combining for purposes of this subparagraph long positions in put options with short positions in call options and short positions in put options with long positions in call options. -
Question 9 of 20
9. Question
Which of the following statement is/are true regarding filing of new applicant for FINRA membership?
I. a trial balance, balance sheet, supporting schedules, and computation of net capital, each of which has been prepared as of a date that is within 30 days before the filing date of the application
II. An NMA form
III. a new member assessment report
IV. an original signed and notarized paper Form BD, with applicable schedulesCorrect
Rule no 1013. New Member Application and Interview
An Applicant for FINRA membership shall file its application with the Department in the manner prescribed by FINRA. An Applicant shall submit an application that includes:
(A) Form NMA;
(B) an original signed and notarized paper Form BD, with applicable schedules;
(C) an original FINRA-approved fingerprint card for each Associated Person who will be subject to SEA Rule 17f-2;
(D) a new member assessment report;
(E) a detailed business plan that adequately and comprehensively describes all material aspects of the business that will be, or are reasonably anticipated to be, performed at and after the initiation of business operations, including future business expansion plans, if any, and includes:
(i) a trial balance, balance sheet, supporting schedules, and computation of net capital, each of which has been prepared as of a date that is within 30 days before the filing date of the application;
(ii) a monthly projection of income and expenses, with a supporting rationale, for the first 12 months of operations;
(iii) an organizational chart;Incorrect
Rule no 1013. New Member Application and Interview
An Applicant for FINRA membership shall file its application with the Department in the manner prescribed by FINRA. An Applicant shall submit an application that includes:
(A) Form NMA;
(B) an original signed and notarized paper Form BD, with applicable schedules;
(C) an original FINRA-approved fingerprint card for each Associated Person who will be subject to SEA Rule 17f-2;
(D) a new member assessment report;
(E) a detailed business plan that adequately and comprehensively describes all material aspects of the business that will be, or are reasonably anticipated to be, performed at and after the initiation of business operations, including future business expansion plans, if any, and includes:
(i) a trial balance, balance sheet, supporting schedules, and computation of net capital, each of which has been prepared as of a date that is within 30 days before the filing date of the application;
(ii) a monthly projection of income and expenses, with a supporting rationale, for the first 12 months of operations;
(iii) an organizational chart; -
Question 10 of 20
10. Question
Which of the following function is/are part of “Office of Supervisory Jurisdiction”?
I. order execution or market making
II. new applicant registration Of FINRA
III. final acceptance (approval) of new accounts on behalf of the member
IV. maintaining custody of customers’ funds or securitiesCorrect
Rule no 3110. Supervision
“Office of Supervisory Jurisdiction” means any office of a member at which any one or more of the following functions take place:(A) order execution or market making;
(B) structuring of public offerings or private placements;
(C) maintaining custody of customers’ funds or securities;
(D) final acceptance (approval) of new accounts on behalf of the member;
(E) review and endorsement of customer orders, pursuant to paragraph (b)(2) above;
(F) final approval of retail communications for use by persons associated with the member, pursuant to Rule 2210(b)(1), except for an office that solely conducts final approval of research reports
Incorrect
Rule no 3110. Supervision
“Office of Supervisory Jurisdiction” means any office of a member at which any one or more of the following functions take place:(A) order execution or market making;
(B) structuring of public offerings or private placements;
(C) maintaining custody of customers’ funds or securities;
(D) final acceptance (approval) of new accounts on behalf of the member;
(E) review and endorsement of customer orders, pursuant to paragraph (b)(2) above;
(F) final approval of retail communications for use by persons associated with the member, pursuant to Rule 2210(b)(1), except for an office that solely conducts final approval of research reports
-
Question 11 of 20
11. Question
Which of the following statements is/are true regarding foreign sovereign debt security?
I. Sovereign bonds can be denominated in a foreign currency or the government’s domestic currency
II. Because of default risk, sovereign bonds tend to be offered at NO discount
III. The government of a country with an unstable economy tends to denominate its bonds in the currency of a country with a stable economy
IV. The default risk of a sovereign bond is assessed by international debt marketsCorrect
Rule no 4210. Margin Requirements
The term “highly rated foreign sovereign debt securities” means any debt securities (including major foreign sovereign debt securities) issued or guaranteed by the government of a foreign country, its provinces, state or cities, or a supranational entity, if at the time of the extension of credit the issue, the issuer or guarantor, or any other outstanding obligation of the issuer or guarantor ranked junior to or on a parity with the issue or the guarantee is assigned a rating (implicitly or explicitly) in one of the top two rating categories by at least one nationally recognized statistical rating organization.Incorrect
Rule no 4210. Margin Requirements
The term “highly rated foreign sovereign debt securities” means any debt securities (including major foreign sovereign debt securities) issued or guaranteed by the government of a foreign country, its provinces, state or cities, or a supranational entity, if at the time of the extension of credit the issue, the issuer or guarantor, or any other outstanding obligation of the issuer or guarantor ranked junior to or on a parity with the issue or the guarantee is assigned a rating (implicitly or explicitly) in one of the top two rating categories by at least one nationally recognized statistical rating organization. -
Question 12 of 20
12. Question
Which of the following is/are true about fidelity bonds?
I. business insurance that offers an employer protection against losses
II. they can be either monetary or physical in terms of protection
III. fidelity bonds often provide protection caused by its employees’ dishonest actions
IV. these bonds are trade-able and can acquire interest just like regular bondsCorrect
Rule no 4360. Fidelity Bonds
A fidelity bond is a form of business insurance that offers an employer protection against losses – either monetary or physical – caused by its employees’ fraudulent or dishonest actions. Fidelity bonds are often held by insurance companies and brokerage firms, which are specifically required to carry protection proportional to their net capital. Among the possible forms of loss a fidelity bond covers include fraudulent trading, theft and forgery. In Australia, a fidelity bond is called “employee dishonesty insurance,” and in the U.K. it’s called “fidelity guarantee insurance.”Incorrect
Rule no 4360. Fidelity Bonds
A fidelity bond is a form of business insurance that offers an employer protection against losses – either monetary or physical – caused by its employees’ fraudulent or dishonest actions. Fidelity bonds are often held by insurance companies and brokerage firms, which are specifically required to carry protection proportional to their net capital. Among the possible forms of loss a fidelity bond covers include fraudulent trading, theft and forgery. In Australia, a fidelity bond is called “employee dishonesty insurance,” and in the U.K. it’s called “fidelity guarantee insurance.” -
Question 13 of 20
13. Question
Which of the following statement is/are true about broad index stock group?
I. Index stock group consisting of 25 or more stocks
II. Value of stocks are determined by current market prices
III. Value of the stocks is determined by current share prices
IV. Indexes are established and maintained by financial services or data companiesCorrect
Rule no 4210. Margin Requirements
The term “broad index stock group” means an index stock group of 25 or more stocks whose inclusion and relative representation in the group are determined by the inclusion and relative representation of their current market prices in a widely disseminated stock index reflecting the stock market as a whole or an inter-industry sector of the stock market.Incorrect
Rule no 4210. Margin Requirements
The term “broad index stock group” means an index stock group of 25 or more stocks whose inclusion and relative representation in the group are determined by the inclusion and relative representation of their current market prices in a widely disseminated stock index reflecting the stock market as a whole or an inter-industry sector of the stock market. -
Question 14 of 20
14. Question
Which of the following statements is/are true regarding “Time Within Which Margin or “Mark to Market” Must Be Obtained”?
I. the margin should be obtained within 20 days from the date
II. the margin can be obtained later if FINRA has given additional time
III. the margin should be obtained within 15 days from the date
IV. the margin should be obtained within 25 days from the dateCorrect
Rule no 4210. Margin Requirements
The amount of margin or “mark to market” required by any provision of this Rule shall be obtained as promptly as possible and in any event within 15 business days from the date such deficiency occurred, unless FINRA has specifically granted the member additional time.Incorrect
Rule no 4210. Margin Requirements
The amount of margin or “mark to market” required by any provision of this Rule shall be obtained as promptly as possible and in any event within 15 business days from the date such deficiency occurred, unless FINRA has specifically granted the member additional time. -
Question 15 of 20
15. Question
Which of the following things should be given in order to protect and educate investors?
I. Finra website and address
II. Pamphlet including information about regarding finra brokercheck
III. Finra borkercheck hotline numberCorrect
FINRA rule no 2267. Investor Education and Protection
Any member whose contact with customers is limited to introducing customer accounts to be held directly at an entity other than a FINRA member and thereafter does not carry customer accounts or hold customer funds and securities may furnish a customer with the information required by paragraph (a) of this Rule at or prior to the time of the customer’s initial purchase, in lieu of once every calendar year; and
(2) any member that does not have customers or is a party to a carrying agreement where the carrying firm member complies with paragraph (a) of this Rule is exempt from the requirements of this Rule.Incorrect
FINRA rule no 2267. Investor Education and Protection
Any member whose contact with customers is limited to introducing customer accounts to be held directly at an entity other than a FINRA member and thereafter does not carry customer accounts or hold customer funds and securities may furnish a customer with the information required by paragraph (a) of this Rule at or prior to the time of the customer’s initial purchase, in lieu of once every calendar year; and
(2) any member that does not have customers or is a party to a carrying agreement where the carrying firm member complies with paragraph (a) of this Rule is exempt from the requirements of this Rule. -
Question 16 of 20
16. Question
Which statement does not refer to breakpoint sale?
I. The purpose of breakpoint is to offer investors discounts for making shorter investments so that they could invest more
II. Break point discount begins at $25,000
III. Purchase of investment must be recorded by Letter of IntentCorrect
FINRA rule no 2342. “Breakpoint” Sales
(a) No member shall sell investment company shares in dollar amounts just below the point at which the sales charge is reduced on quantity transactions so as to share in the higher sales charges applicable on sales below the breakpoint.
(b) For purposes of determining whether a sale in dollar amounts just below a breakpoint was made in order to share in a higher sales charge, FINRA will consider the facts and circumstances, including, for example, whether a member has retained records that demonstrate that the trade was executed in accordance with a bona fide asset allocation program that the member offers to its customers.Incorrect
FINRA rule no 2342. “Breakpoint” Sales
(a) No member shall sell investment company shares in dollar amounts just below the point at which the sales charge is reduced on quantity transactions so as to share in the higher sales charges applicable on sales below the breakpoint.
(b) For purposes of determining whether a sale in dollar amounts just below a breakpoint was made in order to share in a higher sales charge, FINRA will consider the facts and circumstances, including, for example, whether a member has retained records that demonstrate that the trade was executed in accordance with a bona fide asset allocation program that the member offers to its customers. -
Question 17 of 20
17. Question
What is a ‘proxy?’
Correct
2251. Processing and Forwarding of Proxy and Other Issuer-Related Materials
Charges for Proxy Follow-Up Material
For each set of follow-up material, a Processing Unit Fee of 40 cents per account, except for those relating to an issuer’s annual meeting for the election of directors, for which the Processing Unit Fee shall be 20 cents per account.Incorrect
2251. Processing and Forwarding of Proxy and Other Issuer-Related Materials
Charges for Proxy Follow-Up Material
For each set of follow-up material, a Processing Unit Fee of 40 cents per account, except for those relating to an issuer’s annual meeting for the election of directors, for which the Processing Unit Fee shall be 20 cents per account. -
Question 18 of 20
18. Question
According to rule of “Disclosure of Financial Condition”, what does the term ‘customer’ means?
Correct
FINRA rule no 2261. Disclosure of Financial Condition
The term “customer” means any person who, in the regular course of such member’s business, has cash or securities in the possession of such member.Incorrect
FINRA rule no 2261. Disclosure of Financial Condition
The term “customer” means any person who, in the regular course of such member’s business, has cash or securities in the possession of such member. -
Question 19 of 20
19. Question
What is meant by limited partnership roll up transaction?
Correct
FINRA rule no 2310. Direct Participation Programs
Limited partnership roll-up transaction is a transaction involving the combination or reorganization of one or more limited partnerships, directly or indirectly, in which:
(A) some or all of the investors in any of such limited partnerships will receive new securities, or securities in another entity, that will be reported under a transaction reporting plan declared effective before January 1, 1991, by the SEC under Section 11A of the Exchange Act.
(B) any of the investors’ limited partnership securities are not, as of the date of the filing, reported under a transaction reporting plan declared effective before January 1, 1991, by the SEC under Section 11A of the Exchange Act.
C) investors in any of the limited partnerships involved in the transaction are subject to a significant adverse change with respect to voting rights, the term of existence of the entity, management compensation, or investment objectives.Incorrect
FINRA rule no 2310. Direct Participation Programs
Limited partnership roll-up transaction is a transaction involving the combination or reorganization of one or more limited partnerships, directly or indirectly, in which:
(A) some or all of the investors in any of such limited partnerships will receive new securities, or securities in another entity, that will be reported under a transaction reporting plan declared effective before January 1, 1991, by the SEC under Section 11A of the Exchange Act.
(B) any of the investors’ limited partnership securities are not, as of the date of the filing, reported under a transaction reporting plan declared effective before January 1, 1991, by the SEC under Section 11A of the Exchange Act.
C) investors in any of the limited partnerships involved in the transaction are subject to a significant adverse change with respect to voting rights, the term of existence of the entity, management compensation, or investment objectives. -
Question 20 of 20
20. Question
What is meant by the term ‘aggregate exercise price’ under options contract?
Correct
FINRA rule no 2360. Options
An aggregate exercise price is the value traded of the underlying asset if the holder exercises its options contract. In other words, it is the amount of money needed to buy, for a call, or sell, for a put all the underlying asset represented by the options contract.
The term ‘aggregate exercise price’ is calculated by multiplying option contract with the number of units of the underlying security covered by such option contract.Incorrect
FINRA rule no 2360. Options
An aggregate exercise price is the value traded of the underlying asset if the holder exercises its options contract. In other words, it is the amount of money needed to buy, for a call, or sell, for a put all the underlying asset represented by the options contract.
The term ‘aggregate exercise price’ is calculated by multiplying option contract with the number of units of the underlying security covered by such option contract.
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