1149 道题
A victim of domestic abuse by a spouse takes money from her IRA in 2026. What is the largest amount that can be withdrawn without the 10% additional tax under that exception?
- a.The greater of $10,000 or 50% of the account
- b.The lesser of $10,000 or 50% of the account✓
- c.$5,000 per child living in the household
- d.The lesser of $22,000 or the account balance
The IRS exceptions table allows a distribution to a victim of domestic abuse by a spouse or domestic partner of up to the lesser of $10,000 or 50% of the account. The $22,000 figure belongs to the separate disaster recovery exception. As with other exceptions, income tax can still apply.IRC 72(t)(2)(K)
An investor sells shares she held for 10 months at a gain. How is the gain taxed?
- a.As a short-term gain, taxed as ordinary income at graduated rates✓
- b.As a long-term gain, at a maximum 15% rate
- c.As a long-term gain, at a maximum 28% rate
- d.It is not taxed until the investor has held the shares a full year
A capital gain is short-term if the asset was held one year or less. Net short-term gains are taxed as ordinary income at graduated tax rates. Only gains on assets held for more than one year are long-term.IRS Topic 409
A broker-dealer sends a customer the written agreement and risk disclosures required for penny stock transactions. When may the firm first sell the customer a penny stock after sending that agreement?
- a.Immediately, once the customer has said she understands the risks
- b.Not less than two business days after the firm sends the agreement✓
- c.Not less than ten calendar days after the account is opened
- d.Only after the customer has made three prior trades in the account
Rule 15g-9 bars a broker-dealer from selling a penny stock to, or buying one for, a customer's account less than two business days after the firm sends the customer the written agreement to the transaction (and the suitability statement). The firm must also have approved the account for penny stock trading by gathering information on the customer's financial situation, experience and objectives.17 CFR 240.15g-9
A court finds that an employee of a broker-dealer traded on material nonpublic information, and that the firm controlled the employee. What is the maximum civil penalty the firm faces as a controlling person under Section 21A, assuming the profit gained was $200,000?
- a.Exactly $200,000, the profit gained by the employee, with no multiple of the profit applied
- b.The greater of $1,000,000 or three times the profit gained or loss avoided, so $1,000,000✓
- c.Three times the profit, so $600,000, with no minimum dollar amount for the civil penalty
- d.Five times the profit, so $1,000,000, with no separate dollar figure
Under Section 21A the penalty for the person who committed the violation is capped at three times the profit gained or loss avoided, while a controlling person's penalty is capped at the greater of $1,000,000 or three times that amount. With a $200,000 profit, three times is $600,000, which is less than $1,000,000, so the cap is $1,000,000.Exchange Act Section 21A (15 U.S.C. 78u-1)
A customer who is travelling asks a member firm to hold her mail for five months, saying only that she finds forwarding it to be a nuisance. Under FINRA Rule 3150, what is the firm's position?
- a.It may hold the mail for any period, provided the customer's written instructions state an end date in its records
- b.It may not hold the mail that long, because convenience is not an acceptable reason beyond three months✓
- c.It may hold the mail for up to a year, provided the firm sends the customer a monthly e-mail summary
- d.It may never hold customer mail, because it must be sent to the address of record
FINRA Rule 3150 lets a member hold mail on the customer's written instructions, but a request that exceeds three consecutive months, including aggregated prior requests, must state an acceptable reason such as a safety or security concern. Convenience does not qualify. The firm must also tell the customer about alternate ways to monitor the account and verify at reasonable intervals that the instructions still apply.FINRA Rule 3150
A broker acting as agent on a customer's stock purchase must disclose the amount of remuneration it receives from the customer on the confirmation. Which arrangement is an exception to that requirement?
- a.Commissions that are lower than the firm's standard schedule for similar trades on the same day
- b.Any trade of fewer than 100 shares, however the customer pays the firm for executing the order
- c.Remuneration paid under a written agreement with the customer that is set other than on a transaction basis✓
- d.Remuneration received in a transaction that settles through a clearing agency, rather than directly with the firm
Rule 10b-10 requires an agent to disclose the amount of any remuneration received from the customer, unless the remuneration is determined under a written agreement with the customer otherwise than on a transaction basis, such as a flat annual advisory fee. Discounted commissions and odd-lot sizes do not remove the duty.17 CFR 240.10b-10(a)
Even if a fund charges no front-end sales charge, which fee may it still assess when an investor buys shares?
- a.A purchase fee✓
- b.A contingent deferred sales charge on the purchase
- c.A 12b-1 fee paid directly by the investor at purchase
- d.A management fee paid directly to the underwriter
FINRA lists purchase fees among the fees a fund may charge based on investor action, and notes that a fund may assess one at the time of purchase whether or not it charges a front-end sales charge. Redemption fees and exchange fees are other action-based fees.FINRA investor education: Mutual funds (fees)
A popular mutual fund stops accepting new investors, but existing shareholders may still buy and redeem shares. How should this fund be classified?
- a.It has become a closed-end fund, because it no longer sells new shares to any new investors
- b.It remains an open-end fund, because existing shareholders can continue to buy and sell shares✓
- c.It has become a unit investment trust, because its share count is fixed
- d.It must liquidate, because open-end funds must always accept new investors in order to stay registered
FINRA explains that some mutual funds get so large that they close to new investors, yet remain open-end funds because existing shareholders can continue to buy and sell shares. A closed-end fund raises money once and then trades on an exchange.FINRA investor education: Mutual funds
A mutual fund adopts a 12b-1 plan after its shares have already been offered to the public. Besides the board votes, what shareholder approval does the rule require?
- a.A vote of at least a majority of the fund's outstanding voting securities✓
- b.A two-thirds vote of the fund's independent directors only
- c.No shareholder approval, because the board acts for shareholders
- d.Unanimous consent of all shareholders who bought before the plan was adopted
If a 12b-1 plan is adopted after a public offering of the fund's voting securities, the rule requires approval by at least a majority of the outstanding voting securities. The shareholder vote adds a check beyond the board's vote.17 CFR 270.12b-1(b)(1)
After the birth of her second child, a woman takes money from her IRA to pay birth expenses. What is the most per child that can be withdrawn without the 10% additional tax under the birth-or-adoption exception?
- a.$5,000 total across all of her children
- b.$10,000 per child
- c.$2,500 per child, per parent
- d.$5,000 per child✓
The IRS exceptions table allows distributions of up to $5,000 per child for qualified birth or adoption expenses to avoid the 10% additional early-distribution tax. The limit is applied child by child, not as one family total. Ordinary income tax can still apply to the distribution.IRC 72(t)(2)(H)
A hedge fund tells a prospective investor that she will be unable to redeem for the first year after investing. What is this restriction called?
- a.A high-water mark
- b.A lock-up period✓
- c.A hurdle rate
- d.A net asset value swing
A lock-up period is a stretch, often one year or more, during which investors cannot cash in their shares. A high-water mark and a hurdle rate limit when the manager may charge a performance fee, and neither restricts redemption.FINRA Investor Education, Hedge funds (SEC Investor.gov)
A longtime customer asks to see her carrying member's financial condition. Under FINRA Rule 2261, what must the member make available to her?
- a.Its tax returns for the past three years
- b.Information on its financial condition as shown in its most recent balance sheet, available for inspection on request✓
- c.Only a letter stating that it meets its net capital requirement
- d.Nothing, because a firm's financial statements are confidential
Rule 2261(a) requires a member to make available for inspection by any bona fide regular customer, on request, the information on its financial condition disclosed in its most recent balance sheet. The member may instead deliver the balance sheet in paper form, or electronically if the customer consents.FINRA Rule 2261(a)
A 74-year-old IRA owner forgets to take the required minimum distribution for the year and does not correct it within the correction window. What is the standard excise tax on the amount that should have been withdrawn but was not?
- a.25% of the amount not distributed✓
- b.10% of the amount not distributed
- c.50% of the amount not distributed
- d.15% of the account balance
The IRS says that if required distributions are skipped or too small, a 25% excise tax applies to the amount not distributed as required, reduced to 10% if the shortfall is corrected within two years. The tax is applied to the shortfall, not to the whole account balance.IRC 4974
A firm that lets non-institutional customers open accounts online has a margin disclosure obligation under FINRA Rule 2264. What must it do?
- a.Give the statement only to customers who ask for margin
- b.Give the statement within 30 days after the first margin loan
- c.Post the statement on its website, which replaces any individual delivery
- d.Give the statement to each customer before or when the margin account is opened, in a separate document, and post it on its website✓
Rule 2264(a) bars a member from opening a margin account for a non-institutional customer unless, before or at the time of opening, it furnishes the margin disclosure statement individually in a separate document. A member that allows online account opening or trading must also post the statement on its website in a clear and conspicuous way.FINRA Rule 2264(a)
A worker takes a distribution from a SIMPLE IRA 14 months after she first participated in her employer's SIMPLE IRA plan, before age 59 1/2 and with no exception available. What additional tax applies?
- a.A 25% additional tax, because the distribution came within the first two years of participation✓
- b.A 10% additional tax, the same as the tax that applies to any traditional IRA owner under 59 1/2
- c.No additional tax, because SIMPLE IRAs are exempt from early-withdrawal rules
- d.A 15% additional tax, split between the owner and the employer who sponsors the SIMPLE plan
The IRS notes that a distribution from a SIMPLE IRA within the first two years of participation incurs a 25% additional tax instead of the usual 10%. After the two-year period the ordinary 10% additional tax applies, unless an exception such as age 59 1/2 is met.IRC 72(t)(6)
A company's press release states strong earnings but omits that its largest customer has just cancelled its contract, and investors buy the stock. Under Rule 10b-5, why can the release be unlawful even though every statement in it was literally true?
- a.Rule 10b-5 applies only to statements that are false in every respect, so a half-truth is never covered by it
- b.Rule 10b-5 applies only to statements made by broker-dealers and not to statements made by issuers or their officers
- c.Rule 10b-5 bars omitting a material fact needed to keep the statements made from being misleading✓
- d.Rule 10b-5 applies only to omissions made in a registration statement and never to oral statements to buyers
Rule 10b-5, adopted under Section 10(b) of the Exchange Act, makes it unlawful, in connection with the purchase or sale of any security, to make an untrue statement of a material fact or to omit a material fact necessary to make the statements made not misleading in light of the circumstances. A release that is accurate but leaves out the cancelled contract can mislead, and the rule is not limited to registration statements or broker-dealers.17 CFR 240.10b-5
After its first year, how often must a fund's board specifically approve the continuation of a 12b-1 plan?
- a.Only once, because approval at adoption covers the plan permanently
- b.Every five years, at the same time as the prospectus update
- c.Only when shareholders petition the board to review the plan
- d.At least annually, by the board and by the independent directors✓
Rule 12b-1 allows a plan to continue beyond one year from adoption only so long as its continuance is specifically approved at least annually by the board and by the disinterested directors. A plan therefore cannot become permanent through a single initial vote.17 CFR 270.12b-1(b)(3)(i)
Why do the returns of a fund of funds depend on two layers of costs?
- a.Its underlying funds are not allowed to charge any fees, so only the fund of funds itself bills investors
- b.It is required to charge both a front-end load and a back-end load on every purchase and redemption
- c.Its returns are affected by the fees of both the fund itself and the underlying funds it holds✓
- d.It pays a 12b-1 fee to each of its shareholders out of the income that the underlying funds earn
Funds of funds are mutual funds that invest in other mutual funds. They can achieve much greater diversification, but their returns are affected by the fees of both the fund itself and the underlying funds. Redundancy can also cut diversification if several underlying funds hold the same investments.FINRA investor education: Mutual funds (fund of funds)
A customer in a cash account buys stock and fails to pay in time, owing $800 on the trade. What does Regulation T allow the broker-dealer to do about the unpaid amount?
- a.Nothing, because the firm must always liquidate any unpaid amount, however small it is
- b.Disregard it at its option, because a sum due not exceeding $1,000 may be ignored✓
- c.Disregard it only if the customer pays the amount within the next 90 calendar days
- d.Disregard it only with prior written approval from the Federal Reserve Board's staff
Regulation T generally requires a creditor to promptly cancel or liquidate any transaction not paid in full within the time allowed, but it permits the creditor, at its option, to disregard any sum due from the customer that does not exceed $1,000. The option belongs to the firm, not to the customer.12 CFR 220.8(b)(4)
A client replaces her deferred annuity with a new one in a Section 1035 exchange. Besides the tax-free transfer, which cost does FINRA say she should expect?
- a.The old contract's surrender period carries over to the new contract and the clock never restarts
- b.The gain in the old contract is taxed in full in the year of the exchange, as ordinary income
- c.The surrender period usually starts over on the new contract, and additional fees may apply✓
- d.The new contract has no surrender charges at all because it was acquired through an exchange
FINRA says that exchanging one annuity for another may involve additional costs and fees, including surrender charges, and usually means the clock restarts for early withdrawal penalties. A 1035 exchange allows the direct transfer without tax consequences.FINRA investor education: Annuities (exchanges)
In the NBER's description of the business cycle, how are expansions and recessions defined?
- a.Expansions run from a peak to a trough, and recessions run from a trough to a peak
- b.Expansions end at a trough, and recessions begin only after two quarters of falling prices
- c.Expansions run from a trough to a peak, and recessions run from a peak to a trough✓
- d.Expansions and recessions are both measured from one peak to the next peak
The NBER Business Cycle Dating Committee treats expansions as the periods between a trough and the following peak, and recessions as the periods between a peak and the following trough. Contraction is the common description of the phase after the peak. A change in prices is inflation or deflation, which does not define a recession.NBER business cycle dating
A member firm sends all of its customers' marketable orders to one trading venue, partly because that venue gives the firm other business in return. What does FINRA Rule 5310 say about that practice?
- a.The practice is acceptable if the firm discloses the arrangement in its annual report
- b.The practice is acceptable because routing decisions are made by the venue, not the firm
- c.The practice is acceptable if every customer order is executed within one second
- d.Channeling orders to a third party as reciprocation for business does not relieve the firm of its duty to seek the best market✓
FINRA Rule 5310 requires reasonable diligence to find the best market so that the customer's resulting price is as favorable as possible under prevailing conditions, considering the character of the market, the size and type of the transaction, the number of markets checked, accessibility of the quotation and the order's terms. Sending orders to a third party in reciprocation for service or business does not excuse a failure of that duty.FINRA Rule 5310
The Federal Reserve announces that it will conduct open market purchases of Treasury securities to make financial conditions more accommodative. What is the intended effect?
- a.Drain reserves from the banking system in order to slow inflation and cool the economy
- b.Raise the discount rate so that banks borrow less from the Federal Reserve and lend less
- c.Put downward pressure on interest rates to support economic activity and employment✓
- d.Reduce the federal budget deficit directly by retiring outstanding Treasury debt held by banks
Open market operations are the purchase and sale of securities by the central bank; buying securities adds reserves and puts downward pressure on interest rates, which supports activity and job creation. Selling securities does the opposite. Retiring debt is a fiscal-policy matter handled by the Treasury and Congress, not an aim of Fed purchases.Federal Reserve Act; Federal Reserve policy tools
A client says his annuity cannot lose its guaranteed payments because it is insured by the FDIC. Which response is correct?
- a.He is right, because annuities are insured by the FDIC up to $250,000
- b.He is right, because SIPC covers annuity contracts up to $500,000
- c.He is wrong, because annuities have no guarantee of any kind
- d.Annuities are not FDIC or SIPC insured; the guarantee is only as good as the issuing insurance company, with some state guarantees✓
Annuities aren't guaranteed by the FDIC, SIPC or any other federal agency. There may be state guarantees if an insurer fails, but a fixed annuity is guaranteed only as long as the issuing insurance company remains in business.FINRA investor education: Annuities (risks)
An investor's basis in a stock is $12 per share. The company pays a nondividend distribution of $2 per share. How is the distribution treated?
- a.It is a qualified dividend that is taxed at preferred rates in the year in which it is received
- b.It is a return of capital that reduces her basis to $10 and is not taxed until her basis is recovered✓
- c.It is a short-term capital gain, because it is paid out of the company's principal and she held less than a year
- d.It is tax-exempt, has no effect on her basis, and never has to be reported on her return
A nondividend distribution is a return of capital, the part of the payment not paid out of earnings. It is not taxed when received but reduces the shareholder's basis, which here falls from $12 to $10. Once the basis reaches zero, any further nondividend distribution is reported as a capital gain.IRS Publication 550, Nondividend Distributions
An investor chooses a 10% floor on a registered index-linked annuity. The index then falls 25%. What is the maximum loss the investor absorbs?
- a.25%, because the floor applies only to gains
- b.10%, because the insurer absorbs losses beyond the floor✓
- c.15%, because the insurer absorbs the first 10% of the decline
- d.0%, because a floor guarantees the investor's principal
A floor is the percentage loss of the index that the investor is willing to absorb before the insurance company absorbs further losses. With a 10% floor and a 25% decline, the investor's maximum absorbed loss is 10%. A buffer works the other way, with the insurer taking the first slice of loss.FINRA investor education: Annuities (RILAs)
An insurer receives a complete application and initial purchase payment for a variable annuity. Under Rule 22c-1, within how many business days must the payment be priced at the next computed net asset value?
- a.Not later than two business days after the insurer receives the order✓
- b.Not later than the same business day, with no exceptions for incomplete applications
- c.Not later than ten business days after the free-look period ends for the contract
- d.Not later than thirty calendar days after the application is signed
Rule 22c-1 gives an insurance company sponsoring a separate account up to two business days after receipt of a complete application and initial purchase payment to price the payment at the next computed net asset value. Ordinary fund orders are priced at the next NAV computed after receipt.17 CFR 270.22c-1(c)
A customer is short 600 shares of a stock now trading at $3 per share in a margin account. Under FINRA Rule 4210, what is the minimum maintenance margin on the position?
- a.$1,500, the $2.50-per-share amount alone
- b.$540, which is 30% of the market value
- c.$1,800, because for stock below $5 the requirement is the greater of $2.50 per share or 100% of market value✓
- d.$3,000, the $5-per-share amount used for higher-priced stock
For stock sold short at less than $5.00 per share, Rule 4210 sets minimum maintenance at the greater of $2.50 per share or 100 percent of current market value. Here $2.50 times 600 is $1,500, but 100 percent of the $1,800 market value is greater. The $5 floor and 30 percent test apply to short stock priced at $5 or more.FINRA Rule 4210(c)(2)(B)
A broker-dealer emails the same market-outlook commentary to 40 retail customers over a three-week period. How does FINRA Rule 2210 classify the piece?
- a.Correspondence, because each recipient is an existing customer of the firm that sent the piece
- b.An institutional communication, because the firm sent it to the recipients electronically
- c.Correspondence, because it was distributed to the recipients over less than 30 calendar days
- d.A retail communication, because it reaches more than 25 retail investors within 30 calendar days✓
Under FINRA Rule 2210, written material made available to 25 or fewer retail investors in any 30 calendar-day period is correspondence, while material reaching more than 25 retail investors in that window is a retail communication and carries the stricter principal-approval and content standards. Being an existing customer does not make a recipient institutional, and the delivery method does not change the count.FINRA Rule 2210(a)
The IRS sets the 2026 limit on employee elective deferrals to a SIMPLE 401(k) plan. Compared with the limit for a traditional 401(k), the SIMPLE 401(k) limit is:
- a.The same, at $24,500
- b.Higher, at $31,000 versus $24,500
- c.Lower, at $17,000 versus $24,500✓
- d.Lower, at $7,500 versus $24,500
The IRS lists the 2026 elective deferral limit at $24,500 for traditional and safe harbor 401(k) plans and $17,000 for a SIMPLE 401(k) plan, each subject to cost-of-living adjustments. Participants aged 50 or more may add catch-up contributions if the plan permits them.IRC 401(k)
Which measure is the broadest gauge of the value of goods and services produced inside the United States over a period?
- a.The consumer price index
- b.The unemployment rate
- c.The balance of trade
- d.Gross domestic product✓
Gross domestic product measures the value of the final goods and services produced in the United States, and its percentage change shows whether the economy is growing or shrinking. The consumer price index tracks price changes, the unemployment rate tracks labor-market slack, and the balance of trade compares exports and imports only.Bureau of Economic Analysis; GDP
A registered representative wants to buy stock in a publicly traded company purely as a passive investment, with no role in the company. What does FINRA Rule 3270 require for this purchase?
- a.Prior written approval from FINRA before the purchase is made
- b.Prior written notice to the firm, because any compensation from outside the firm must be reported
- c.No outside-business-activity notice, because passive investments are exempt from the rule✓
- d.A signed customer disclosure form listing the representative's holdings in the company
FINRA Rule 3270 requires a registered person to give the member prior written notice of outside business activities in which he or she is an employee, officer, director, partner or other compensated participant. Passive investments are expressly exempted. The rule requires notice to the firm, not FINRA approval, and any private securities transaction is handled under Rule 3280 instead.FINRA Rule 3270
For a 529 plan, what limit applies to tax-free withdrawals for tuition at an elementary or secondary school?
- a.Up to $10,000 a year of tuition per beneficiary✓
- b.Up to $2,000 a year, the same as a Coverdell account
- c.No limit, because any school tuition is a qualified expense
- d.Nothing, because only college expenses qualify
A qualified 529 distribution includes up to $10,000 in annual expenses for tuition at an elementary or secondary public, private or religious school. Expenses beyond that amount are not qualified, and earnings on that portion are taxable and may be penalized.IRS Section 529 FAQ
How often must an exchange-traded fund that relies on Rule 6c-11 post its portfolio holdings on its website?
- a.Once a quarter, 60 days after the quarter ends, in the fund's periodic report filed with the SEC
- b.Monthly, on the first business day of the month, in a summary that is posted on the fund's website
- c.Only on days when the fund rebalances its portfolio holdings, and then after the market closes
- d.Every business day, before regular trading opens on its primary listing exchange✓
Rule 6c-11 requires an ETF to disclose prominently on a public website, each business day and before the opening of regular trading, the holdings that will form the basis of the next net asset value calculation. A mutual fund, by contrast, reports its holdings less often.17 CFR 270.6c-11(c)(1)
An investor buys a LEAPS call for $800 in January of one year and lets it expire worthless in February of the following year, 13 months later. How is the loss treated?
- a.As a short-term capital loss, because options are always treated as short-term property by the IRS
- b.As a deductible business expense in the year she bought it, up to the full premium that she paid
- c.As a long-term capital loss of $800, because the holding period ends on the expiration date✓
- d.As no loss at all, because only options that are exercised can ever create a loss
If a purchased option expires, its cost is a capital loss, either long-term or short-term depending on the holding period, which ends on the expiration date. Thirteen months is more than one year, so the $800 loss is long-term. The cost of an option is a capital expenditure and cannot be deducted when paid.IRS Publication 550, Puts and Calls (holders)
A company wants REIT status. What share of its gross income must come from rents from real property, mortgage interest, gains on real property and similar sources?
- a.At least 75 percent✓
- b.At least 50 percent
- c.At least 90 percent
- d.At least 100 percent
Section 856(c)(3) requires at least 75 percent of a REIT's gross income to come from sources such as rents from real property, interest on mortgage obligations and gains from sales of real property. A broader 95 percent gross-income test, covering dividends, interest, rents and similar items, also applies.26 U.S.C. 856(c)(3)
A company's initial public offering is made by an issuer that has never been required to file Exchange Act reports. When must the broker-dealers deliver a preliminary prospectus to a person expected to receive a confirmation of sale?
- a.At least 24 hours before the confirmation is sent
- b.At least 48 hours before the confirmation is sent✓
- c.At least 10 days before the offering becomes effective
- d.At or before settlement, together with the confirmation
SEC Rule 15c2-8(b) requires a broker-dealer participating in the distribution of an issue by an issuer not previously required to file Exchange Act reports to deliver a copy of the preliminary prospectus to anyone expected to receive a confirmation at least 48 hours before the confirmation is sent.17 CFR 240.15c2-8(b)
An investor acquires beneficial ownership of 6% of a public company's voting shares. Under Rule 13d-1, within what period must the investor file Schedule 13D?
- a.Within ten calendar days after the acquisition
- b.Before the acquisition that crosses the 5% level takes place
- c.Within five business days after the acquisition✓
- d.Within 45 days after the end of the calendar year
Rule 13d-1(a) requires a person who becomes the beneficial owner of more than 5% of a class of registered voting equity securities to file Schedule 13D with the SEC within five business days after the acquisition. The filing is made after the threshold is crossed, not before it, and it is not deferred to year end.17 CFR 240.13d-1(a)
A 38-year-old realizes she over-contributed to her IRA. She withdraws the excess contribution before the extended due date of her tax return. How are the earnings on that excess treated for the 10% additional tax?
- a.The returned contribution avoids the 10% additional tax, but the earnings on it do not get that exception✓
- b.Both the contribution and its earnings avoid the 10% tax
- c.Neither is subject to the 10% tax, because both are returned to her
- d.The 10% tax applies to the contribution, but the earnings are exempt
The IRS exceptions table covers returned IRA contributions if they are withdrawn by the extended due date of the return, but it excludes the earnings on those returned contributions from the exception. The earnings are generally taxable and can face the 10% additional tax if she is under 59 1/2.IRC 408(d)(4)
Which of the following lists the only three marks Regulation SHO allows on a broker-dealer's sell orders in equity securities?
- a.Long, short, and short covered
- b.Long, short, and hedged
- c.Long, short, and short exempt✓
- d.Long, margin, and short exempt
Rule 200(g) requires a broker-dealer to mark all sell orders of any equity security as long, short, or short exempt. A short exempt mark is used only when the circuit-breaker exceptions in Rule 201(c) or (d) are met.17 CFR 242.200(g)
An investor writes one 50 put and collects a $3.00 per share premium. The put is exercised, and she buys 100 shares at $50.00. What is her tax basis in the stock?
- a.$5,300, because the premium is added to the purchase price
- b.$4,700, because the premium received reduces the cost of the stock✓
- c.$5,000, because the premium was already taxed when she received it
- d.$4,850, because the premium is split between the stock and the option
When a put the investor wrote is exercised and she buys the underlying stock, she decreases her basis in the stock by the premium she received: $5,000 purchase price less $300 premium is $4,700. Her holding period for the stock begins on the date she buys it, not on the date she wrote the put.IRS Publication 550, Puts and Calls (writers)
A margin customer has never signed anything allowing the firm to lend her securities. The firm wants to lend her margin securities that are eligible for pledging or lending. What does FINRA Rule 4330(a) require?
- a.Nothing, because the margin agreement makes all margin securities available for lending
- b.Only a notice sent to the customer within 30 days after the loan is made
- c.The firm must first obtain the customer's written authorization to lend them✓
- d.Only the approval of the firm's financial and operations principal in writing
FINRA Rule 4330(a) provides that no member shall lend securities held on margin for a customer that are eligible to be pledged or loaned unless the member has first obtained a written authorization from the customer permitting the lending. A notice afterward does not substitute for advance written authorization.FINRA Rule 4330(a)
Which of the following may appear in a "tombstone"-style communication permitted by Rule 134 about a registered offering?
- a.A projection of next year's earnings per share to help investors judge the price
- b.An analyst's opinion on whether the shares are undervalued relative to peers
- c.The title and amount of the securities being offered, the issuer's name and a brief description of its general business✓
- d.A statement that the underwriter expects the shares to trade above the offering price
Rule 134 allows limited factual information such as the issuer's name and location, the title and amount of the securities, a brief description of the general type of business, and price and underwriter details. Projections, valuation opinions and price predictions go beyond that list and could be a misleading offer document.17 CFR 230.134
Under Rule 6c-11, an ETF's website must show a median bid-ask spread. Over what period is that median computed?
- a.The last trading day
- b.The most recent calendar quarter
- c.The last 30 calendar days✓
- d.The last 12 months
Rule 6c-11 requires the ETF to publish its median bid-ask spread, based on the national best bid and offer at the end of each 10-second interval during each trading day of the last 30 calendar days. The premium and discount history, by contrast, covers the most recent calendar year.17 CFR 270.6c-11(c)(1)(v)
FINRA's rules require a member to make certain books and records but specify no retention period for one of them, and the Exchange Act rules do not either. For how long must the member preserve that record?
- a.At least three years
- b.At least two years in an easily accessible place
- c.Until the next FINRA examination
- d.At least six years✓
FINRA Rule 4511(b) says that members shall preserve for at least six years those FINRA books and records for which there is no specified period under FINRA rules or the Exchange Act rules. The records must also be kept in a format and media that complies with SEC Rule 17a-4.FINRA Rule 4511(b)
A money market fund adopts policies reasonably designed to restrict every beneficial owner of its shares to natural persons. Under Rule 2a-7, this fund is a
- a.government money market fund
- b.retail money market fund✓
- c.prime institutional fund
- d.single-state tax-exempt fund
Rule 2a-7 defines a retail money market fund by who may own it: policies and procedures reasonably designed to limit all beneficial owners to natural persons. Portfolio content, such as 99.5% in government securities, is what defines a government fund.17 CFR 270.2a-7(a)(21)
For 2026, a participant in a traditional 401(k) plan is age 62. Under the SECURE 2.0 provision for participants aged 60 through 63, what is the maximum catch-up contribution she may make, in addition to the regular elective deferral limit?
- a.$8,000, the same catch-up as for every participant aged 50 or older in the plan
- b.$11,250, which replaces the usual $8,000 catch-up for her age group✓
- c.$4,000, which is the catch-up amount that applies for a SIMPLE 401(k) plan
- d.$24,500, which is the regular limit on elective deferrals for all participants
For 2026 the elective deferral limit for traditional and safe harbor 401(k) plans is $24,500, and participants aged 50 or older may add a catch-up of $8,000. Under SECURE 2.0, participants aged 60, 61, 62 or 63 have a higher catch-up limit, $11,250 for 2026. The $4,000 figure applies to SIMPLE 401(k) catch-ups, and $24,500 is the base deferral limit.IRS: 401(k) plan overview; 2026 limits
A customer's confirmation covers an odd-lot purchase on which an odd-lot differential or equivalent fee was paid. What does Rule 10b-10 require the confirmation to say about it?
- a.Nothing, because odd-lot fees are never mentioned on confirmations
- b.The exact fee in dollars and the name of the contra broker
- c.That the order was filled at the national best bid or offer
- d.Whether an odd-lot differential or equivalent fee was paid, with the amount available on oral or written request✓
Rule 10b-10(a)(3) requires the confirmation to state whether any odd-lot differential or equivalent fee has been paid in connection with an order for an odd-lot number of shares, and that the amount will be furnished on oral or written request. The amount itself need not be printed.17 CFR 240.10b-10(a)(3)
Under the emergency personal expense exception, how many penalty-free distributions can a participant take in a calendar year, and for how much?
- a.One distribution per calendar year, up to $10,000 regardless of the vested balance in the account
- b.Two distributions per calendar year, each up to $1,000 or the vested balance above $1,000, if smaller
- c.One distribution per calendar year, up to the lesser of $1,000 or the vested balance above $1,000✓
- d.Unlimited distributions as long as each is for a documented emergency, with the plan sponsor's approval
The IRS exceptions table lists one distribution per calendar year for personal or family emergency expenses, up to the lesser of $1,000 or the vested account balance over $1,000, for distributions made after 2023. The exception waives the 10% additional tax; the amount is still generally taxable income.IRC 72(t)(2)(I)
An issuer files a shelf registration statement under Rule 415. What is the usual limit on how long securities may be offered from the shelf?
- a.One year from the date the registration statement is filed with the SEC, with no renewal permitted
- b.Ninety days from the date of the final prospectus, after which the issuer must file a new statement
- c.Three years from the initial effective date, unless a new registration statement is filed✓
- d.Five years from the date the first tranche is sold, whether or not any more securities are offered
For most shelf offerings Rule 415(a)(5) allows securities to be offered and sold only until three years have elapsed since the initial effective date; before then the issuer may file a new registration statement to continue. A shelf lets an issuer register once and sell in pieces when market conditions are favorable.17 CFR 230.415