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22 multiple-choice questions and 14 flashcards on Opens Accounts After Obtaining and Evaluating Customers' Financial Profile and Investment Objectives, about 3% of the Series 7 FINRA bank. Every one carries a written rationale.
Opens Accounts After Obtaining and Evaluating Customers' Financial Profile and Investment Objectives is one of 9 chapters in CoStudy's Series 7 (FINRA) bank, and it holds 22 of the bank's 630 multiple-choice questions — roughly 3% of the total. That proportion is not arbitrary: chapters follow the certifying body's published exam outline, and the number of questions in each is set by that domain's published weight, so the share of your practice time this chapter takes matches the share of the real exam it accounts for.
Studying by chapter is worth doing once you have a diagnostic score. A single overall percentage tells you whether you are close; it does not tell you which domain is dragging. Working a weak chapter in isolation, and re-testing it in isolation, is the fastest way to move a score that has stalled — and it is why the mock exams in CoStudy report by domain rather than as one number.
10 questions drawn from this chapter, with the full rationale shown — the controlling principle behind the right answer, and why each wrong option tempts and fails.
Customer asks to open an account with the neighbor holding full trading discretion. The firm must:
Answer: C — Obtain a written third-party trading authorization from customer
A) Third-party trading is permitted with the right documentation. B) A joint account changes ownership; that's not what the customer wants. C) Correct — written third-party trading authorization (POA) is required plus firm review. D) Not the standard control — written authorization is.
A UGMA/UTMA account transfers ownership to the minor at the:
Answer: C — State age of majority
A) Signing does not transfer. B) First distribution is unrelated. C) Correct — age of majority under state law. D) Custodian death changes custodian only.
A trusted contact person designated on a customer's account:
Answer: C — May be contacted by the firm to address possible financial exploitation, but has no trading authority
C) Correct — a trusted contact may be contacted about the account but has no trading or ownership authority. A) Trading authority requires a separate power of attorney or discretionary authorization. B) Inheritance requires a beneficiary designation or estate process, not a trusted-contact designation. D) The trusted contact is typically a family member or friend, not a firm employee.
In a typical 529 education savings plan, control over the account, including the ability to change the beneficiary, rests with the:
Answer: B — Account owner
B) Correct — the account owner retains control, including the right to change beneficiaries among eligible family members. A) The beneficiary does not automatically gain control at 18 in a standard 529 plan. C) The state administers the plan but does not control individual accounts. D) The custodial bank/administrator processes transactions but doesn't control beneficiary changes.
A corporate brokerage account requires a signed:
Answer: C — Formal corporate resolution
A) Verbal alone is insufficient. B) Personal guarantee not required. C) Correct — resolution authorizes trading. D) Trust indenture is unrelated.
Under FINRA Rule 4512, which of the following is required on every new customer account record?
Answer: B — The customer's date of birth
B) Correct — date of birth is a required data field on the account record. A) Relatives' names are not a standard requirement. C) Political affiliation is not collected for account opening. D) Employer's stock symbol is irrelevant unless the customer holds restricted or control shares, which is a separate disclosure.
A trust account requires the firm to obtain:
Answer: B — Trust document plus IDs
A) Name alone is insufficient. B) Correct — trust instrument and IDs. C) Beneficiary list alone is insufficient. D) Margin agreement is separate.
A customer opens a joint account with rights of survivorship. On death, assets pass to:
Answer: B — The surviving joint tenant
A) Estate route is tenants-in-common. B) Correct — JTWROS assets go to survivor. C) Beneficiaries apply to TOD accounts. D) Probate does not control JTWROS.
When an UTMA minor reaches age of majority in the state:
Answer: A — Assets transfer to the now-adult beneficiary fully
A) Correct — beneficiary takes full ownership and control at majority. B) Custodian's role ends at majority. C) UTMA assets are the beneficiary's. D) No default lock exists to age 30.
Within 15 days of options account approval, the firm must:
Answer: C — Obtain a signed options account agreement from customer
A) Exercise instructions are per-trade, not a signed form. B) SEC does not send confirmation letters. C) Correct — the signed options agreement is required within 15 days of approval. D) Form 8949 is annual tax reporting.
4 cards from the 14 in this chapter.
What is a 529 Plan?
Tax-advantaged education savings. Tax-free earnings and withdrawals for qualified education expenses. Account owner maintains control.
Info required to open an account?
Name, address, DOB, SSN, employment, investment objectives, risk tolerance, net worth, income, financial situation, tax status.
What is required to open a discretionary account?
Written authorization from the customer, acceptance and prior approval by a principal of each order, and frequent principal review to detect unsuitable or excessive trading.
What is a time and price discretion order?
An order where the customer specifies the security and action, but gives the rep discretion on timing and price. Does NOT require written discretionary authority.
These are a sample. The full Opens Accounts After Obtaining and Evaluating Customers' Financial Profile and Investment Objectives chapter runs 36 items with per-chapter progress tracking, on the web and in the iOS app.
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