FPI Unit 4 4.01/02

One of the main provisions of the Gramm-Leach-Bliley Act requires financial institutions to:

• protect the privacy of consumer personal monetary information

• provide consumers with information about their credit rating

• offer credit to any individual who is currently employed.

• assist individuals who have had their identity stolen

The Sarbanes-Oxley Act of 2002 is legislation that was passed in response to:

• tax settlements

• collection activities

• investment options

• accounting scandals

A private securities transaction exists when a representative:

• has a joint account with a family member.

• makes a trade from his personal account.

• is engaged with an outside business

• is selling away

A firm that is required to start tape recording their telemarketing activities must continue to do so for what period of time?

• one year

• three years

• five years

• indefinitely

During a sales meeting with a customer, a registered representative states that he is so confident about the investment he will reimburse the customer for any losses. This arrangement is:

• permissable if the customer is a relative

• commingling and a violation of FINRA rules

• permissable because the representative did not promise the customer a profit.

• a violation of SEC rules because the registered representative guaranteed the customer against loss.

The maximum penalty that can be imposed on a business entity for false or misleading information on any SEC report or application is

• $1,000.

• $100,000

• $200,000.

• $250,000.

If an investor requests additional information about a trade confirmation that he/she received, the requested information must be furnished to him/her within:

• thirty days of the request

• five business days of the request

• five business days after the date of the transaction

• fifteen business days after the date of the transaction.

Violators of the SEC rules of the Securities Exchange Act of 1934 are subject to criminal penalties. The maximum penalty for an individual is:

• $100,000.

• $500.00

• $1,000,000, imprisonment for 5 years, or both

• $1,000,000, imprisonment for 10 years, or both

As the size and power of U.S. businesses have grown over time, the federal government's involvement in the U.S. economy has:

• increased

• decreased

• stayed the same

• became unimportant

One of the reasons that has caused government’s role in business to expand is that

• costs of production have continued to increase.

• competition in the marketplace has increased.

• products have become very technical.

• people’s attitudes have changed.