Series 24 Exam Practice Questions

Below you will find some free Series 24 Exam practice questions. The Series 24 practice questions below will give you an idea of the types of questions you will see when taking the real exam. At the end of the practice test, you’ll find an answer key. Good luck…

10 Series 24 Practice Questions

1) Which of the following restricted securities may be sold by retail investors to qualified institutional buyers for an exemption from rule 144?

A. Restricted stock of a NASDAQ Capital Market company
B. Restricted stock of a NYSE company
C. Restricted stock of a company quoted in the OTC Pink Market
D. All of the above

2) A customer has a margin account with market value $20,000 and a debit balance of $8,000. What is the amount of securities that the brokerage firm must segregate for the protection of the customer?

A. $8,000
B. $8,800
C. $11,200
D. $20,000

3) A market maker is displaying a quote on NASDAQ Level II of 13-13.50, 6×10. The market maker decides to change its quote to 13.20-13.50. Then. the market maker receives an order to sell 1,000 shares from another firm. The market maker must buy:

A. 100 shares at $13.20
B. 600 shares at $13.20
C. 1,000 shares at $13.20
D. 1,000 shares at $13.50

4) Which of the following securities may not be used by investors of a company to accept a tender offer?

A. Convertible bonds
B. Common stock
C. Options
D. None of the above are exceptions

5) Which of the following is true about an unaudited balance sheet prepared by a broker-dealer to be filed with the SEC?

A. It must be prepared by an accountant that is not affiliated with the broker-dealer
B. It must be prepared within three months of the firm’s audited balance sheet
C. It must be prepared within six months of the audited balance sheet of the firm
D. Both (A) and (C)

When taking the Series 24 Exam, be aware of key words in the questions like EXCEPT and NOT to help keep you from making careless mistakes.

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6) An NGM stock has an inside market of 23 – 23.50 while a market maker has a quote of 23-23.60, 11 x 4. The market maker accepts an order from a customer to sell 1,000 shares of the stock at 23.55. What will the market maker’s quote be after accepting this order?

A. 23 – 23.55, 11 x 10
B. 23 – 23.55, 11 x 14
C. 23 – 23.55, 11 x 4
D. 23.55 – 23.60, 10 x 4

7) If a company issuing stock is reserving shares for its employees, by when must employees make a decision to purchase the stock?

A. No later than the effective date
B. No later than the business day following the effective date
C. No later than three business days following the effective date
D. No later than five business days following the effective date

8) According to the Telephone Act of 1991, when may a registered representative make a solicitation call to an existing customer?

A. Between 8AM and 9PM local time of the customer
B. Between 8AM and 9PM local time of the firm
C. Between 9AM and 8PM local time of the customer
D. At any time without restriction

9) Which of the following is true regarding a riskless transaction executed by a firm in relation to the FINRA 5% Policy?

A. The firm acts in an agency capacity in the transaction
B. The firm may not charge a markup in the transaction
C. This type of trade is not subject to the FINRA 5% Policy
D. The firm acts as a principal but is regulated as an agent in the transaction

10) A broker-dealer wishes to use an advertisement that has been prepared and filed by the sponsor of a mutual fund with the FINRA. Which of the following is true?

A. The broker-dealer must file the ad with the FINRA within 10 days after first use
B. The broker-dealer must file the ad with the FINRA no later than 10 days prior to first use
C. The broker-dealer must file the ad with the NYSE within 10 days after first use
D. The broker-dealer does not need to file the advertisement

Answer Key: 1) C 2) B 3) B 4) C 5) C 6) A 7) B 8) D 9) D 10) D

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Above is just a sampling of Series 24 practice questions. When purchasing our Series 24 Course Textbook or our Series 24 Online Testing Program, you will not only get the correct answers, but also detailed explanations. All books were created by Steven M. Rice and Rueben Martinez