Question 1

The civil penalty for an individual who is convicted of an insider trading violation is permitted to be an amount up to how many times the profit gained or loss avoided?

Options :

A : 1 time

B : 3 times

C : 6 times

D : 10 times

Answer: B

Question 2

A customer purchased $80,000 of Fund XYZ two years ago. He now wants to buy $50,000 of Fund LMN offered within the same fund family, which offers a $100,000 breakpoint under right of accumulation. Which of the following statements is true?

Options :

A : The additional investment qualifies for a $100,000 breakpoint.

B : Each fund requires contributions of $100,000 to qualify for a breakpoint.

C :

The customer must sign a new letter of intent to receive the $100,000 breakpoint on the additional purchase.

D :

The customer will receive a sales charge discount on his next purchase after the account balance of the fund reaches $100,000.

Answer: A

Question 3

At a prospecting event, a registered representative (RR) provides cards for attendees to write down their contact information if they want to have a follow-up meeting with her. Which of the following actions should the RR take in this situation to comply with telemarketing rules?

Options :

A : Obtain the broker-dealer-s approval before making a call

B : Limit contact with prospects to between 9 a.m. and 9 p.m.

C : Contact the prospects at will since they provided express written consent

D :

Prior to contacting the prospects, check all of the names on the cards to make sure they are not on the National Do Not Call Registry

Answer: D

Question 4

An investor wants to purchase mutual fund shares, but she is concerned about the tax efficiency of the fund. Which of the following disclosures required under industry regulations will help the investor make an informed decision?

Options :

A : The fund-s turnover ratio

B : Sales charges and breakpoint discount opportunities

C : The commissions that the fund pays on each transaction

D : Projections of future dividend and capital gains distributions

Answer: A

Question 5

A registered representative (RR) at a member firm is the subject of a statutory disqualification. Which of the following statements is true?

Options :

A : The RR is prohibited from soliciting business but is permitted to accept unsolicited orders.

B :

The RR is prohibited from any association or employment with a member firm unless he obtains a waiver.

C :

The RR is prohibited from employment by a member firm in any registered capacity but is permitted to be employed in an unregistered capacity.

Answer: B

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