Series 27: Exercise

Exercise

Answer true or false

1. 1. True or false. The SEC adopted the customer protection rule to ensure customer funds and securities are kept separate the firm’s operations.
2. 2. True or false. Securities do not physically need to be located at a broker-dealer to be considered “possessed.”
3. 3. True or false. A hypothecation agreement gives a broker-dealer the right to use customers’ securities as collateral to finance its own investing activities.
4. 4. True or false. The PAB account was initiated to protect against losses arising from the failure of a member firm with large numbers of broker-dealer customers.
5. 5. True or false. The reserve formula calculation must be done monthly.
6. 6. True or false. The customer protection rule says that all securities in its customers’ margin accounts must be kept in either the broker-dealer’s possession or control.
7. 7. True or false. If debits exceed credits in the reserve calculation, the