Series 57 handling customer orders questions
These eight free questions are a small sample of the 3,800+ practice questions in the full Series 57 course. Review handling customer orders through scenarios from the CertFuel course. Get more practice questions and practice exams for free in the Series 57 course during Free Beta.
Customer order protection and best execution answer different questions. Check both obligations.
Read the related topic guide for worked examples, or open the matching app lesson before answering. The questions below are original practice scenarios, not recalled FINRA exam items.
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0 of 8 answered
A firm's disclosure states that regular trading hours are always exactly 9:30 a.m. to 4:00 p.m. Eastern Standard Time. What is inaccurate about that statement?
A: The model statement uses 4:00 p.m. as the usual close. B: The model statement expressly uses Eastern Standard Time. C: The definition covers trading outside regular hours on either side of the usual session. D: The rule describes those clock times as the usual session by using the hedge generally, rather than making them absolute boundaries.
A member routes customer orders on an automated, non-discretionary basis and does not review each order individually. It must conduct regular and rigorous reviews:
A: The required frequency is at least quarterly, and the review separates securities and order types. B: The required dimensions are security by security and type of order rather than customer by customer. C: The periodic review has a quarterly minimum and must distinguish each security and order type. D: The periodic review is what identifies material execution-quality differences and does not depend on an outside report.
When a member sells inventory to a customer, appreciation or depreciation in the position before or after the customer trade:
A: The mark-up is measured over the bona fide representative current market, so the member's inventory gain or loss does not ordinarily control. B: The policy does not use the member's position appreciation or depreciation to set the exact percentage. C: The bona fide representative current market remains the relevant base. D: This inventory principle is not confined to municipal transactions.
For a non-institutional customer, consent to a net transaction must be:
A: A non-institutional customer's own consent has no oral route; oral disclosure and consent is an institutional method. B: Negative consent is an institutional method, so a non-institutional customer's own silence after a letter is not consent. C: The retail consent must be obtained separately for each order rather than carried forward from account opening. D: The retail route requires written pre-execution consent for each order and must show understanding of its terms and conditions.
A noninstitutional customer places an order for 10,000 shares at $10.00 per share. Which statement describes the order's place in the large-order population?
A: Both boundary values are met: the order has at least 10,000 shares and is not worth less than $100,000. B: The rule uses inclusive share and value boundaries, so equality satisfies both. C: Within the size branch, the share threshold and the value proviso work together. D: The institutional-account population is an alternative route and is not added to the large-order test.
The constructed-spread method is available only when all of the following are present EXCEPT
A: The method is limited to customer orders below that price. B: The method is written for an OTC equity security rather than an NMS stock. C: The absence of a published spread is what opens the alternative calculation route. D: That dealer floor supplies the data for the constructed spread.
An adviser follows a business practice that operates as deceit upon clients, although no separate device or scheme is identified. Which prohibition can still apply?
A: That paragraph focuses on the operation of the conduct and does not require a separately identified device. B: The practice-based prohibition stands apart from principal or agency capacity. C: The second paragraph reaches conduct that operates as fraud or deceit without that added instrument requirement. D: The statutory prohibition applies through the any-investment-adviser opening.
A customer limit order in a national market system (NMS) stock matches both a specialist's offer and the national best offer but would change the specialist's displayed size only by a de minimis amount. The specialist may:
A: The equal-price duty does not attach when the size change is no more than de minimis. B: The customer's order does not improve the price, and the size condition is not met. C: A more-than-de-minimis size change is required before the equal-price display duty attaches. D: A small size change does not mean the order was executed. It simply fails the equal-price display trigger.
This score describes one small, fixed practice set. It does not predict an official result. Review the explanation and the topic guide for each question you missed or guessed.
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More practice in the course: Get more practice questions and practice exams for free in the Series 57 course during Free Beta.