Which of the following are duties of the specialist on an exchange floor?I). executing limit orders if/when the limit price specified is reachedII). minimizing any imbalance in supply and demand for the stock(s) that the specialist is assignedIII). determining an opening price for each assigned stock every dayIV). serving as an auctioneer for the shares of the assigned stocks
Answer(s): D
All of the choices listed are duties of the specialist on an exchange floor. The specialist maintains a limit order "book" and executes those orders if/when the limit price is reached. The specialist is also charged with maintaining a fair and orderly market in the assigned securities, which means trading on his own account to ensure that the supply and demand of the stock's shares match. Additionally, the specialist is responsible for setting the opening price for the assigned stock each day and for serving as the auctioneer for the shares of the stock.
Which of the following is not a money market security?
Answer(s): C
Common stock is not a money market security. Money market securities mature in one year or less. Common stock has no maturity.
On Friday, August 6th, the Board of Directors of Ecolab (ECI) announced that it would pay a dividend of $0.155 a share to shareholders of record as of Tuesday, September 21st.The dividend checks were scheduled to be mailed on Friday, October 15th. In this scenario, the payment date is:
The payment date is none of the choices listed. The payment date is the day the checks are scheduled to be mailed-Friday, October 15th.
Which of the following persons would not fall under the definition of "investment adviser," under federal guidelines?
An individual who works as an agent for a broker and occasionally gives investment advice to clients who request it but receives no additional compensation for doing so would not fall under the definition of "investment adviser," under federal guidelines. In 1987, Release IA -1092 expanded the definition to include individuals providing investment advice to entertainers or athletes, among others. The compensation need not be monetary. Box seats at athletic events would be considered compensation for advisory services.
GoForBroke Broker-Dealers has distributed a list of ten mutual funds that it suggests are top-notch funds worthy of recommendation by GoForBroke's agents. Coincidentally, all the funds on this list also happen to be those that execute the majority of their trades through GoForBroke.Is GoForBroke in violation of any FINRA rules?
Yes. By distributing a list naming specific funds that coincidentally all happen to execute a lot of trades through GoForBroke, the broker-dealer is violating FINRA's anti-reciprocal rule. Even though GoForBroke does not appear to be offering its agents any additional compensation for selling shares of these funds, it is promoting them above other funds that aren't conducting as many trades through the broker-dealer. Recommendations should be based on a specific client's needs, not on the money the fund generates for the broker-dealer. There is no rule that prohibits a broker-dealer from selling shares of mutual funds that execute their trades through them.
Post your Comments and Discuss FINRA Series 6 exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the Series 6 content, but please register or login to continue.