Chapter 4 Practice Questions
- 1. Member firms that wish to recommend deferred variable annuities must make sure that the customer would benefit from certain features of these investments. The benefits include all of the following except:
- A. Tax-deferred growth
- B. Death or living benefit
- C. Annuitization
- D. Immediate redemption without tax penalties
- 2. Under FINRA rules, an associated person may accept which of the following gifts from a mutual fund distributor:
- A. Reimbursement for out-of-pocket expenses incurred by the associated person and his spouse in attending an educational conference
- B. Occasional meals and NFL tickets tied to a stated annual sales quota
- C. A crisp new $100 bill delivered once every year on Christmas Eve
- D. None of the choices listed
- 3. All of the following are permitted non-cash compensation arrangements except:
- A. Season tickets to a sporting event
- B. Dinner at a local steakhouse
- C. Reimbursement for a meeting held by an offeror to educate associated persons
- D. A ticket to Wicked, a Broadway show, on premiere night
- 4. Which of the following would be acceptable to give to a customer under the FINRA rules on gifts and gratuities?
- A. A $200 ticket to Cirque du Soleil in which you accompany the person to the show
- B. Two $75 dollar tickets to a concert that you will not attend
- C. A $125 holiday box of chocolates sent by a representative
- D. A $150 stroller gift that the firm pays for
- 5. The most FINRA may fine a member for committing a minor rules violation, if the member submits a minor rule violation plan letter, is:
- A. $1,000
- B. $2,500
- C. $5,000
- D. $7,500
- 6. Assuming an agent’s broker-dealer has written procedures allowing certain types of borrowing and lending, agents may borrow funds from or loan funds to clients under which of the following conditions?
- I. The lending or borrowing is with a member of the agent’s immediate family