FINRA Uniform Securities Agent State Law Examination Sample Questions:

1. Penny Swyne, an agent employed by Bear Broker-Dealers, has received a written complaint via e-mail from Mr. Wolf regarding her performance as his agent.
What are Ms. Swyne's legitimate options?

A) As illegal as it may sound, since the complaint was via e-mail, Ms. Swyne can hit the delete button and make it all go away.
B) Ms. Swyne can call Mr. Wolf and offer to meet him for a romantic dinner and try to convince him to revoke the complaint.
C) Ms. Swyne must forward the complaint to the state Administrator.
D) Ms. Swyne must provide Bear Broker-Dealers with a copy of the complaint.

2. Which of the following would meet the requirements for an "exempt security?"

A) commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors
B) commercial paper with a $200,000 face value and a maturity of three months that is rated BB by Standard and Poors
C) a $25,000 promissory note that matures in three months
D) a $500,000 promissory note that matures in two years

3. No: 167
A "market not held" order is

A) an order in which the client tells the broker to use his own discretion in timing a purchase or sale in an attempt to get a better price.
B) an order to sell securities that the investor owns if the stock decreases by a certain amount from the current price.
C) an order to buy or sell a stock at a specified price, which differs from the current market price.
D) a prohibited activity in which an agent engages in the purchase or sale of securities that are not offered by his broker-dealer.

4. Which of the following would not be a prohibited activity for a broker-dealer?
I. A broker-dealer tells a client that a municipal revenue bond offered by the city of Boston, Massachusetts is almost risk-free because it is backed by the taxes paid to the city, and the city generates a lot of tax dollars.
II. A broker-dealer sells a client some bonds that the broker-dealer has in its portfolio, after informing the client that it is acting as a seller in the transaction.
III. A broker-dealer purchases some stock that a client is selling for its own portfolio, after informing the client that it is acting as a buyer in the transaction.
IV. A broker-dealer purchases 1,000 shares of Southwest Airlines for a client who calls and asks the broker-dealer to buy some shares of a domestic airline stock at a good price for him and receives written discretionary authority from the client two days later, prior to the settlement date.

A) I only
B) II and III only
C) I and IV only
D) II, III and IV only

5. Which of the following funds can an agent indicate is "no load?"

A) Both A and C can be advertised as "no load" funds.
B) a fund with no front-end or back-end load that has 12b-1 fees equal to 0.30% of the average net assets of the fund.
C) a fund with no front-end load that has 12b-1 fees equal to 0.10% of the average net assets of the fund and a rear-end load that varies depending on how long the investor has held the shares.
D) a fund with no front-end or back-end load that has 12b-1 fees equal to 0.25% of the average net assets of the fund.

Solutions: