Series 24 — General Securities Principal Practice Test
Frequently asked questions
How many Series 24 — General Securities Principal practice questions are here?+
A full bank of original Series 24 — General Securities Principal practice questions across the official content areas, weighted like the real exam, with explanations. Free, no signup.
What is the Series 24 — General Securities Principal exam like?+
About 150 questions, 225 minutes, and you need 70% to pass. Practice by topic here, then take the full timed mock exam to gauge readiness.
Are these the real exam questions?+
No. Every question is 100% original, written from public primary sources with explanations. We never copy real exam questions or paid prep material.
Can I study in Chinese or Spanish?+
PrepPass practice is in English, 中文 and Español. The official exam is in English — switch the question language to English any time to rehearse the exact terminology you'll see on test day.
Sample practice questions
A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.
- 1. General Broker-Dealer Activities
Under FINRA Rule 3110, a broker-dealer's supervisory system must, at a minimum, include:
- a.A guarantee that no rule violations will ever occur
- b.Written supervisory procedures and the designation of qualified principals to carry them out
- c.Daily approval of every trade by the firm's CEO
- d.Approval of the firm's business plan by the SEC
Answer: b
Explanation: Rule 3110 requires a supervisory system reasonably designed to achieve compliance, including written supervisory procedures (WSPs) and designated, appropriately registered principals. A system cannot guarantee zero violations, and there is no requirement for CEO approval of every trade or SEC approval of the business plan.
- 2. General Broker-Dealer Activities
The SEC customer protection rule (Rule 15c3-3) requires a firm to safeguard customer assets primarily through:
- a.The reserve formula and possession-or-control requirements for customer cash and fully paid securities
- b.Purchasing insurance from a private carrier for each account
- c.Holding all customer funds in the firm's operating account
- d.Reporting each customer's tax basis to the IRS
Answer: a
Explanation: Rule 15c3-3 protects customers by requiring firms to maintain a special reserve bank account under the reserve formula and to keep fully paid and excess-margin securities in the firm's possession or control. Commingling customer funds with firm operating funds would violate the rule.
- 3. General Broker-Dealer Activities
Under FINRA Rule 3310, a firm's anti-money-laundering program must be:
- a.Approved by FINRA staff before adoption
- b.Approved in writing by a member of senior management
- c.Reviewed only when a customer is suspected of a crime
- d.Limited to accounts of foreign nationals
Answer: b
Explanation: Rule 3310 requires the AML program to be approved in writing by senior management and to include a designated AML officer, a customer identification program, ongoing monitoring, independent testing, and SAR filing. It applies to the firm's business generally, not only to foreign accounts.
- 4. General Broker-Dealer Activities
A principal reviewing the firm's compliance program discovers the WSPs have not been updated after a major rule change. The most appropriate action is to:
- a.Revise the written supervisory procedures to reflect the new rule and document the change
- b.Wait until the next annual cycle to make any changes
- c.Delete the outdated procedures without replacement
- d.Refer the matter to the SEC for approval before acting
Answer: a
Explanation: Supervisory procedures must be kept current so the system remains reasonably designed to achieve compliance. When rules change, the principal should promptly amend the WSPs and document the update rather than waiting or leaving a gap.
- 5. Customer-Related Activities
FINRA Rule 2090, the Know Your Customer rule, requires a firm to use reasonable diligence to:
- a.Predict the future performance of the customer's investments
- b.Match every customer to the firm's most profitable products
- c.Know the essential facts about each customer and the authority of persons acting on the account
- d.Guarantee the customer a minimum rate of return
Answer: c
Explanation: The Know Your Customer rule requires firms to know and retain the essential facts about each customer needed to service the account and to understand the authority of anyone acting on the customer's behalf. It is about diligence, not performance guarantees.
- 6. Customer-Related Activities
Most disputes between a customer and a member firm are resolved through:
- a.A jury trial in federal district court
- b.FINRA arbitration
- c.A hearing before the SEC commissioners
- d.Binding mediation by the Federal Reserve
Answer: b
Explanation: Customer agreements typically require that disputes be resolved through FINRA's arbitration forum, with mediation available. This provides a faster, industry-specific process rather than court litigation.
- 7. Trading & Market Making
A market maker in an equity security is obligated to:
- a.Buy shares only when the price is rising
- b.Guarantee customers a profit on every trade
- c.Publish firm two-sided quotations and stand ready to buy and sell
- d.Report trades once per week
Answer: c
Explanation: A market maker holds itself out as continuously willing to buy and sell and must display firm two-sided (bid and ask) quotations. This provides liquidity and continuous pricing. Trades must be reported promptly, generally within a short time after execution.
- 8. Trading & Market Making
Entering matched orders to create the false appearance of active trading in a security is:
- a.A permitted market-making technique
- b.A manipulative practice prohibited under the Securities Exchange Act
- c.Required by Regulation M during a distribution
- d.Allowed if disclosed to customers afterward
Answer: b
Explanation: Wash trades and matched orders that fabricate the appearance of trading activity are manipulative and prohibited under the Securities Exchange Act and Rule 10b-5. They deceive other market participants and cannot be cured by later disclosure.
- 9. Investment Banking & Research
In a firm-commitment underwriting, the underwriting syndicate:
- a.Buys the entire issue from the issuer and bears the risk of reselling it
- b.Acts only as the issuer's agent with no financial risk
- c.Guarantees the price of the stock after it begins trading
- d.Is prohibited from earning any compensation
Answer: a
Explanation: In a firm-commitment deal, the syndicate purchases the whole issue from the issuer and assumes the risk of reselling it to the public. In a best-efforts arrangement, underwriters act only as agents and bear no purchase risk.
- 10. Investment Banking & Research
Under FINRA Rule 2241, to protect research analyst objectivity, investment banking personnel are prohibited from:
- a.Reading any published research report
- b.Supervising analysts or controlling their compensation for specific transactions
- c.Attending any meeting where research is discussed
- d.Communicating with the issuer at any time
Answer: b
Explanation: Rule 2241 separates research from investment banking so that banking cannot supervise analysts or tie their pay to specific deals, and analysts cannot promise favorable coverage to win business. This preserves the independence and integrity of research.