Last Updated: Sep 03, 2026
No. of Questions: 400 Questions & Answers with Testing Engine
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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions | 11% | - Regulatory requirements for transaction processing - Trade settlement and confirmation rules - Order types and execution procedures |
| Topic 2: Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives | 9% | - Suitability rules and regulatory compliance - Financial profile, risk tolerance, and investment objectives - Account types and documentation requirements |
| Topic 3: Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records | 73% | - Options and derivative products - Recordkeeping and regulatory reporting - Investment companies, ETFs, and variable annuities - Debt securities and government obligations - Margin accounts and taxation - Direct participation programs - Municipal securities - Equity securities |
| Topic 4: Seeks Business for the Broker-Dealer from Customers and Potential Customers | 7% | - Standards for advertising and public communications - Customer communication and solicitation rules - Product-specific disclosures and regulatory requirements |
Question 1
The definition of debentures is:
A. a worthless security
B. a loan secured by real estate
C. securities backed by the general credit of the issuers but no specific collateral
D. collateralized securities
Question 2
An "accumulation unit" of a variable annuity is used to determine which of the following?
A. the amount returned to the annuitant upon redemption of the account
B. the amount of annuity payments to be paid to the owner
C. the amount to be passed to the annuitant's beneficiary
D. the value of the annuitant's contract before annuity payments begin
Question 3
Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a
longer time for the order to be executed, to make sure the loss does not exceed 5 points. Which of the
following orders would be the best recommendation?
A. sell stop-limit order
B. buy stop order
C. sell stop order
D. sell limit order
Question 4
What does the following mean when printed on the stock exchange ticker tape?
A. one hundred shares of MST traded on the exchange and appear out of order on the tape
B. the last sale of MST was for 100 shares at 98.25
C. trading was suspended on MST pending dissemination of news
D. the preceding transaction in MST was tow or more points different than 98.25
Question 5
If a customer dies, the registered representative is required to:
A. cancel all open (good 'til cancelled) orders
B. both A and B
C. await instructions and necessary papers from the executor of the estate
D. sell out the account
Solutions:
| Question 1 Answer: C | Question 2 Answer: D | Question 3 Answer: A | Question 4 Answer: A | Question 5 Answer: B |
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