Question 1

The formation of an asset-backed security or debt obligation that represents a claim on the cash flows from mortgage loans is known as:

Options :

A : Securitization

B : Hypothecation

C : Loan processing

D : Claim processing

Answer: A

Question 2

A broker-dealer (BD) creates a marketing postcard that includes a statement regarding FINRA's endorsement of the BD. Which of the following responses is true?

Options :

A : The statement regarding FINRA-s endorsement is not permissible.

B : The statement is permissible if a principal of the BD approves it in writing prior to use.

C : The statement is permissible if the statement is approved in writing by FINRA prior to use.

D : The statement is permissible if the postcard does not discuss specific investment opportunities.

Answer: A

Question 3

A municipal securities dealer makes a political contribution of $990 to a local mayoral candidate. At the end of the quarter, to whom, if anyone, must the dealer report the contribution?

Options :

A : SEC

B : MSRB

C : FINRA

D : No disclosure required as the amount is below the reporting threshold

Answer: B

Question 4

On settlement date, a customer is unable to pay for a purchase in his cash account. His position is liquidated. Which of the following statements is true according to Federal Reserve Regulation T?

Options :

A : Only closing transactions are permitted.

B : The customer is barred from trading for 30 days.

C : The customer-s account is frozen for 90 days.

D : All related accounts are frozen for 90 days.

Answer: C

Question 5

The process in which the buying firm must pay for the securities and the selling firm must deliver the securities is known as:

Options :

A : A corporate action

B : Clearing the trade

C : The settlement of the transaction

D : A delivery versus payment (DVP) transaction

Answer: C

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