Series 24 Exam Practice Questions – Test Your Knowledge

🧾 Series 24 Exam Practice Questions – Test Your Knowledge
📘 Sharpen Your Regulatory Knowledge with These Core Practice Questions

The Series 24 exam—General Securities Principal Qualification Exam—is designed to test your ability to supervise broker-dealer operations, including regulatory compliance, trading, underwriting, and sales practices. Below are 10 sample questions with answer choices and explanations to help you prepare for what to expect.

✅ Instructions:

Try to answer each question, then check the explanation provided. These reflect FINRA exam format and reasoning.

🔢 Practice Questions (1–10)

1. Which of the following is a responsibility of a General Securities Principal?

A) Managing the activities of a mutual fund wholesaler
B) Supervising options and municipal securities trading desks
C) Approving insurance product recommendations
D) Registering branch offices with the SEC

✅ Answer: B
Explanation: A General Securities Principal supervises most trading activity, including options and municipals. However, a municipal principal is required for certain specific municipal functions.

2. How long must firms maintain records of customer complaints according to FINRA rules?

A) 3 years
B) 4 years
C) 5 years
D) 6 years

✅ Answer: A
Explanation: Customer complaint records must be maintained for 4 years, but they must be kept in an easily accessible location for 2 years.

3. A firm receives a complaint that an RR made unsuitable recommendations. What is the principal’s obligation?

A) File an immediate report with the SEC
B) Review the complaint and determine disciplinary action
C) Respond only if the client requests restitution
D) Cancel all transactions in the account

✅ Answer: B
Explanation: Principals must review all customer complaints and take appropriate supervisory action, including disciplinary steps if needed.

4. Which of the following is considered “retail communication” under FINRA rules?

A) Email sent to fewer than 25 retail clients
B) Market commentary sent to 30 retail clients
C) Internal training material
D) A trade confirmation

✅ Answer: B
Explanation: Retail communication includes any written or electronic message sent to more than 25 retail clients within a 30-day period.

5. When must a firm file a new Form U4?

A) When a registered rep moves to another branch
B) Upon any change in job title
C) Within 30 days of a disclosable event (e.g., bankruptcy or judgment)
D) At the time of annual FINRA registration renewal

✅ Answer: C
Explanation: Form U4 must be amended within 30 days of any disclosable event or change in status, such as criminal charges, liens, or regulatory actions.

6. A firm engages in fixed-price offerings of a new issue. Which rule governs this activity?

A) Regulation M
B) Rule 144A
C) Regulation T
D) Rule 10b-5

✅ Answer: A
Explanation: Regulation M governs manipulative activities during the distribution of new issues and applies to underwriting and fixed-price offerings.

7. Under FINRA Rule 3110, how often must a firm conduct a supervisory branch inspection?

A) Monthly
B) Quarterly
C) Annually
D) Every 3 years

✅ Answer: C
Explanation: Branch offices that are supervisory locations must be inspected annually under Rule 3110.

8. What is the consequence if a principal fails to report a serious rule violation committed by a registered rep?

A) Suspension only applies to the rep
B) The firm must pay a restitution fine
C) The principal may be subject to disciplinary action
D) The client’s transaction is voided

✅ Answer: C
Explanation: Principals have a duty to supervise. Failure to report a known violation may result in disciplinary action against the principal and the firm.

9. A firm is sponsoring a seminar and inviting the public. What must be included in the presentation?

A) The personal success stories of the presenter
B) FINRA’s approval stamp
C) A fair and balanced discussion of risks and benefits
D) A guarantee of returns if clients open an account

✅ Answer: C
Explanation: All retail communications and presentations must be fair, balanced, and not misleading. Any guarantees are strictly prohibited.

10. Which document is used to notify FINRA of a firm’s intent to terminate an employee’s registration?

A) Form U4
B) Form U5
C) Form BD
D) Form ADV

✅ Answer: B
Explanation: Form U5 is filed to terminate the registration of a representative and must be submitted within 30 days of termination.

📊 How Did You Do?

• 8–10 correct: Solid supervisory knowledge – keep practicing
• 6–7 correct: Strong foundation – review finer details
• 4–5 correct: Time to revisit FINRA rules and firm obligations
• Below 4: Focus on understanding your role as a principal and core compliance

🎓 Need more Series 24 prep?
Access full-length practice tests, flashcards, and rule summaries at:
👉 https://finra-exam-mastery.com

Pass the Series 24 with precision – prepare like a principal!