10 free, exam-style Financial and Operations Principal Qualification Examination (Series 27) practice questions with answers and explanations. No signup required. Work through them below, then take the full free Series 27 practice test to study every exam domain.
These 10 free Series 27 questions are organized by exam domain, so you can see how each part of the Financial and Operations Principal Qualification Examination blueprint is tested. Reveal the answer and explanation under each question.
A broker-dealer operating under the Basic Method has aggregate indebtedness of $13,200,000 and net capital of $1,000,000. Under SEC Rule 17a-11, which action is required?
Correct answer: A - Provide written notice to the SEC and DEA within 24 hours
A carrying broker-dealer's fiscal quarter ends on Monday, September 30, 2024. Assuming no federal holidays intervene, what is the last date by which the firm must file its FOCUS Part II report under SEC Rule 17a-5?
Correct answer: D - October 23, 2024
A carrying broker-dealer closes a customer's margin account on July 1, 2024. Under SEC Rule 17a-4, the account records must be preserved until at least:
Correct answer: C - July 1, 2030
A broker-dealer's compliance officer detects a $8,000 transaction that appears to involve proceeds from illegal activity, and a suspect has been identified. Under FINRA Rule 3310 and applicable FinCEN regulations, a Suspicious Activity Report (SAR) must be filed within:
Correct answer: C - 30 calendar days of detection
A FinOp is reviewing the weekly customer reserve computation under SEC Rule 15c3-3. Which of the following items appears as a DEBIT in the reserve formula (Exhibit A)?
Correct answer: A - Securities borrowed to finance customer short sales
An introducing broker-dealer does not hold customer funds or securities, clears all customer transactions through a carrying firm under a written FINRA Rule 4311 agreement, and maintains net capital of $75,000. Which statement BEST describes this firm's obligations under Rule 15c3-3?
Correct answer: B - The firm qualifies for the (k)(2)(ii) exemption and is not required to perform a customer reserve computation
A broker-dealer's books show the following: GAAP net worth of $1,500,000; an approved subordinated loan of $400,000; non-allowable assets totaling $350,000; operational charges of $120,000; and securities haircuts of $180,000. What is the firm's net capital under SEC Rule 15c3-1?
Correct answer: C - $1,250,000
A broker-dealer holds $1,000,000 in a single equity security that has a ready market. The firm's net capital, excluding haircuts on this position, is $500,000. Under Rule 15c3-1(c)(2)(vi), what is the total haircut applied to this position?
Correct answer: D - $292,500
A broker-dealer's balance sheet shows total liabilities of $8,000,000, which includes: a $500,000 FINRA-approved subordinated loan; $1,200,000 in bank loans fully collateralized by U.S. Treasury securities; and $300,000 in deferred income taxes. What is the firm's aggregate indebtedness under Rule 15c3-1?
Correct answer: B - $6,000,000
A customer opens a cash account on Monday and purchases 500 shares of XYZ Corp at $40 per share. On Wednesday - before the purchase has been paid for - the customer sells all 500 shares at $45. Under Regulation T, this transaction constitutes:
Correct answer: B - A freeriding violation, placing the cash account on a 90-day restriction
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