Exercise
Answer True or False
1. True or false. The customer protection rule is meant to ensure customer funds and securities are kept separate from the firm’s operations.
2. True or false. Securities do not physically need to be located at a broker-dealer to be considered to be in the firm’s possession.
3. True or false. A hypothecation agreement gives a broker-dealer the right to use customers’ securities as collateral to finance its own investing activities.
4. True or false. A PAB account helps protect against losses arising from the failure of a member firm that has a large number of customers that are broker-dealers.
5. True or false. A firm must complete the reserve formula calculation at least once a month.
6. True or false. Under the customer protection rule, all securities owned in a margin account