Series 24 Practice Exam.
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1. A candidate is reviewing the administrative parameters of the Series 24 qualification examination. How many multiple-choice items must the candidate answer on this exam?
- A. 120 questions
- B. 150 questions
- C. 175 questions
- D. 200 questions
Show answer & explanation
Answer: B
The Series 24 exam consists of 150 multiple-choice items. The other totals are common distractors but do not match the published item count.2. Given the Series 24's passing standard, approximately how many of its 150 items must a candidate answer correctly to pass?
- A. 90 items
- B. 98 items
- C. 105 items
- D. 113 items
Show answer & explanation
Answer: C
With 150 items and a 70% passing score, a candidate needs 150 × 0.70 = 105 correct items.3. A firm is budgeting for a supervisor's qualification. What is the registration cost of the Series 24 examination?
- A. $175
- B. $205
- C. $235
- D. $265
Show answer & explanation
Answer: C
The cost of the Series 24 exam is $235.4. How much time is a candidate allotted to complete the Series 24 examination?
- A. 180 minutes (3 hours)
- B. 200 minutes
- C. 225 minutes (3 hours and 45 minutes)
- D. 240 minutes (4 hours)
Show answer & explanation
Answer: C
Candidates are given 3 hours and 45 minutes, which equals 225 minutes, to complete the Series 24 exam.5. What minimum score must a candidate achieve to pass the Series 24 examination?
- A. 65%
- B. 70%
- C. 72%
- D. 75%
Show answer & explanation
Answer: B
The passing score for the Series 24 exam is 70%. Scores below this threshold are failing.6. Given 150 items and 225 minutes of testing time, approximately how much time on average may a candidate spend per item if the time is distributed evenly across all items?
- A. About 1.0 minute per item
- B. About 1.5 minutes per item
- C. About 2.0 minutes per item
- D. About 2.5 minutes per item
Show answer & explanation
Answer: B
Dividing the 225-minute allotment by 150 items gives 225 ÷ 150 = 1.5 minutes per item on average.7. A candidate has been testing for exactly 3 hours. Relative to the total time permitted for the Series 24 exam, how much testing time remains?
- A. 15 minutes
- B. 30 minutes
- C. 45 minutes
- D. 60 minutes
Show answer & explanation
Answer: C
The total allotment is 225 minutes (3 hours and 45 minutes). After 180 minutes (3 hours), 225 − 180 = 45 minutes remain.8. With 150 scored items and a passing threshold of 70%, what is the minimum number of items a candidate must answer correctly to pass the Series 24 exam?
- A. 100 items
- B. 105 items
- C. 113 items
- D. 120 items
Show answer & explanation
Answer: B
Applying the 70% passing standard to 150 items yields 0.70 × 150 = 105 items. A candidate must therefore answer at least 105 items correctly.9. A candidate answers 100 of the 150 Series 24 items correctly. Based on the exam's passing standard, what is the result?
- A. Pass, because 100 correct exceeds the required threshold
- B. Fail, because the required percentage was not reached
- C. Pass, because any score above 50% passes
- D. The result cannot be determined from the information given
Show answer & explanation
Answer: B
100 correct out of 150 is approximately 66.7%, which is below the 70% passing score, so the candidate fails.10. Which statement correctly pairs a Series 24 exam parameter with its published value?
- A. The exam contains 150 items and costs $235
- B. The exam contains 175 items and costs $235
- C. The exam contains 150 items and costs $205
- D. The exam contains 120 items and costs $265
Show answer & explanation
Answer: A
The Series 24 exam contains 150 multiple-choice items and has a registration cost of $235; only choice A pairs both values correctly.11. A candidate answers 100 of the exam's items correctly. Based on the passing standard, what is the correct conclusion about this result?
- A. It passes, because 100 correct exceeds the required threshold
- B. It fails, because the required number of correct items is higher than 100
- C. It passes, because any score above half the items passes
- D. It fails, because a perfect score is required
Show answer & explanation
Answer: B
The passing standard is 70 percent of 150 items, which is 105 correct. Because 100 correct is fewer than the 105 required, the result is a failing outcome. This is an inference from the item count and passing percentage.12. A candidate misses 50 of the exam's items. Based on the passing standard, does this outcome pass?
- A. Yes — 100 correct out of 150 meets the passing standard
- B. No — 100 correct out of 150 is below the passing standard
- C. Yes — missing fewer than half the items always passes
- D. Cannot be determined from the information given
Show answer & explanation
Answer: B
Missing 50 of 150 items leaves 100 correct. Because the passing standard is 70 percent (105 of 150), 100 correct does not pass. This is an inference from the item count and passing percentage.13. A candidate pays the registration fee and later must re-register after an absence, paying the same amount a second time. Considering only the stated registration fee, what is the total amount paid across the two registrations?
- A. $235
- B. $370
- C. $470
- D. $500
Show answer & explanation
Answer: C
Each registration costs $235, so two registrations total $235 × 2 = $470. This is an inference built on the stated per-registration fee.14. A candidate wants to estimate an average pace to finish the exam within the allotted time. Given the total time and item count, approximately how much time is available per item on average?
- A. About 1.0 minute per item
- B. About 1.5 minutes per item
- C. About 2.0 minutes per item
- D. About 2.5 minutes per item
Show answer & explanation
Answer: B
Dividing 225 minutes by 150 items yields 1.5 minutes per item on average. This is an inference from the duration and item count and helps pace responses on trading and customer-account questions.15. A candidate is budgeting for the Series 24 principal qualification exam. According to the official exam profile, what is the registration fee for this exam?
- A. $185
- B. $235
- C. $305
- D. $60
Show answer & explanation
Answer: B
The published cost of the Series 24 exam is $235. The other figures are not the stated fee.16. A study guide states that the Series 24 costs $235 and allots 3 hours and 45 minutes. Which statement about these two figures is accurate?
- A. The fee is $235 and the time limit is 225 minutes
- B. The fee is $235 and the time limit is 195 minutes
- C. The fee is $305 and the time limit is 225 minutes
- D. The fee is $185 and the time limit is 225 minutes
Show answer & explanation
Answer: A
The exam fee is $235, and 3 hours and 45 minutes equals 225 minutes.17. How many multiple-choice items must a candidate answer on the Series 24 examination?
- A. 100 questions
- B. 125 questions
- C. 150 questions
- D. 175 questions
Show answer & explanation
Answer: C
The Series 24 consists of 150 multiple-choice items.18. An investor is comparing two fixed-income instruments. Which characteristic MOST directly exposes a long-term bond's market price to interest-rate risk?
- A. The bond's coupon payments are exempt from federal taxation
- B. The bond's price moves inversely to changes in prevailing market interest rates, with longer maturities being more sensitive
- C. The bond is guaranteed against default by the issuing corporation
- D. The bond can only be sold back to the original underwriter
Show answer & explanation
Answer: B
Interest-rate risk is the risk that a bond's market price falls when prevailing rates rise. Prices move inversely to rates, and longer-maturity bonds exhibit greater price sensitivity (duration), making them more exposed than shorter-maturity bonds.19. A candidate has 225 minutes to complete the Series 24. Expressed in conventional clock terms, how much time is that?
- A. 2 hours and 45 minutes
- B. 3 hours and 15 minutes
- C. 3 hours and 45 minutes
- D. 4 hours and 15 minutes
Show answer & explanation
Answer: C
The allotted time is 225 minutes, which converts to 3 hours and 45 minutes (225 ÷ 60 = 3 hours with 45 minutes remaining).20. What minimum percentage of items must a candidate answer correctly to pass the Series 24?
- A. 65%
- B. 70%
- C. 72%
- D. 75%
Show answer & explanation
Answer: B
The passing score for the Series 24 is 70%.21. A customer holds shares of common stock and preferred stock in the same corporation. In a bankruptcy liquidation, which statement correctly describes their relative priority of claims?
- A. Common shareholders are paid before preferred shareholders
- B. Preferred and common shareholders share liquidation proceeds equally
- C. Preferred shareholders have priority over common shareholders, but both rank behind creditors
- D. Common shareholders have priority because they carry voting rights
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Answer: C
In a liquidation, claims are satisfied in order of seniority: secured and unsecured creditors (including bondholders) first, then preferred shareholders, and finally common shareholders. Preferred stock ranks ahead of common but behind all debt.22. Which risk is a purchaser of a below-investment-grade corporate bond MOST concerned with relative to a purchaser of a comparable-maturity Treasury security?
- A. Credit (default) risk
- B. Currency risk
- C. The risk that the exchange will halt trading
- D. The risk that dividends will be suspended
Show answer & explanation
Answer: A
Below-investment-grade (high-yield) corporate bonds carry materially higher credit risk — the risk the issuer fails to make timely interest or principal payments — than Treasury securities, which are backed by the government. Bonds pay interest, not dividends, so answer D is inapplicable.23. An investor buys a call option on a stock. Which statement BEST describes the maximum loss they face if the option expires worthless?
- A. Unlimited loss, because the stock price can rise indefinitely
- B. The loss is limited to the premium paid for the option
- C. The loss equals the strike price multiplied by 100
- D. There is no possibility of loss on a long call
Show answer & explanation
Answer: B
The buyer of a long call pays a premium for the right, not the obligation, to buy the underlying. If the option expires worthless, the most the buyer can lose is the premium paid. Unlimited loss potential is associated with certain short positions, not a long call.24. Which of the following BEST characterizes the liquidity risk of a thinly traded security?
- A. The security's issuer is certain to default
- B. The investor may be unable to sell the position quickly without accepting a significantly lower price
- C. The security's dividends are automatically reinvested
- D. The security is exempt from all market risk
Show answer & explanation
Answer: B
Liquidity risk is the risk that an investor cannot convert a position to cash quickly at or near its fair value. A thinly traded security has few buyers and sellers, so a seller may have to accept a materially lower price to execute promptly.25. An investor concerned about the erosion of purchasing power over time is MOST focused on which type of risk?
- A. Inflation (purchasing-power) risk
- B. Reinvestment risk
- C. Call risk
- D. Legislative risk
Show answer & explanation
Answer: A
Inflation, or purchasing-power, risk is the risk that the real value of an investment's future cash flows declines because rising prices reduce what those dollars can buy. Fixed-payment instruments such as long-term bonds are especially exposed.26. A candidate is reviewing the administrative parameters of the qualification exam that covers trading, customer accounts, and prohibited activities. How many multiple-choice items does this exam contain?
- A. 100 items
- B. 125 items
- C. 150 items
- D. 200 items
Show answer & explanation
Answer: C
The exam consists of 150 multiple-choice items. Knowing the item count helps a candidate budget time across topic areas such as trading and customer accounts.27. A bond is issued with a call provision. What risk does this feature create for the bondholder?
- A. The issuer may redeem the bond early, potentially forcing the holder to reinvest proceeds at lower prevailing rates
- B. The holder must pay an additional fee to keep the bond outstanding
- C. The bond automatically converts into common stock
- D. The holder loses all accrued interest at maturity
Show answer & explanation
Answer: A
A call provision lets the issuer redeem the bond before maturity, typically when rates have fallen. This creates call risk and associated reinvestment risk: the holder receives principal back early and may only be able to reinvest at lower prevailing rates.28. When planning study time for the exam section on customer accounts and prohibited activities, a candidate wants to know the total time allotted for the exam. What is the permitted duration?
- A. 180 minutes
- B. 210 minutes
- C. 225 minutes
- D. 240 minutes
Show answer & explanation
Answer: C
The exam is administered over 225 minutes (3 hours and 45 minutes), which the candidate must allocate across all covered topics including trading and prohibited activities.29. A representative preparing for the trading and customer-accounts exam asks what minimum result is required to pass. What is the passing score?
- A. 65 percent
- B. 70 percent
- C. 72 percent
- D. 75 percent
Show answer & explanation
Answer: B
A score of 70 percent is required to pass. A candidate must reach this threshold across the full item set, including questions drawn from the trading and prohibited-activities content.30. A candidate registering for the exam that includes the prohibited-activities section wants to confirm the enrollment cost. What is the fee?
- A. $185
- B. $210
- C. $235
- D. $265
Show answer & explanation
Answer: C
The cost of the exam is $235. This administrative fee applies regardless of which topic areas, including customer accounts, are being tested.31. On average, how much time does a candidate have per item on the Series 24, given the total time limit and number of questions?
- A. Approximately 1.0 minute per item
- B. Approximately 1.5 minutes per item
- C. Approximately 2.0 minutes per item
- D. Approximately 2.5 minutes per item
Show answer & explanation
Answer: B
With 225 minutes for 150 items, the average is 225 ÷ 150 = 1.5 minutes per item.32. Which statement BEST distinguishes a systematic (market) risk from an unsystematic risk?
- A. Systematic risk can be fully eliminated through diversification, while unsystematic risk cannot
- B. Systematic risk affects the broad market and cannot be diversified away, while unsystematic risk is specific to an issuer or sector and can be reduced through diversification
- C. Both risks apply only to debt securities
- D. Unsystematic risk affects all securities equally at all times
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Answer: B
Systematic (market) risk affects the entire market and cannot be eliminated by diversification. Unsystematic risk is specific to a particular issuer or industry and can be reduced by holding a diversified portfolio.33. A mutual fund and an exchange-traded fund (ETF) both track the same index. Which statement correctly describes a difference in how an investor typically transacts in each?
- A. ETF shares trade throughout the day at market-determined prices, while a mutual fund is purchased or redeemed at its net asset value calculated once per day
- B. Mutual fund shares trade continuously on an exchange, while ETFs are priced only once daily
- C. Neither product allows investors to redeem shares
- D. Both are guaranteed against loss of principal
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Answer: A
ETF shares trade intraday on an exchange at prices set by supply and demand, whereas open-end mutual fund shares are bought and redeemed at the net asset value (NAV) computed once at the end of the trading day. Neither product is guaranteed against loss.34. An investor writes (sells) an uncovered (naked) call option. Which statement BEST describes the risk profile of this position?
- A. Maximum loss is limited to the premium received
- B. The position carries theoretically unlimited loss potential because the underlying price can rise without limit
- C. The position has no market risk
- D. Maximum gain is unlimited
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Answer: B
A writer of an uncovered call is obligated to deliver the underlying if assigned. Because the underlying's price can rise without a theoretical ceiling, the potential loss is unlimited, while the maximum gain is limited to the premium received.35. A candidate scores exactly at the minimum required level on the exam. Given the passing threshold, what is the fewest number of items the candidate must answer correctly to pass?
- A. 90 items
- B. 100 items
- C. 105 items
- D. 120 items
Show answer & explanation
Answer: C
With 150 items and a 70 percent passing score, the minimum correct is 0.70 × 150 = 105 items. This is an inference combining the item count and the passing percentage.36. A candidate budgets the full exam duration evenly and wants to know roughly how many minutes to reserve for the final one-third of the items covering prohibited activities. Using an even time split, about how many minutes correspond to 50 of the 150 items?
- A. About 55 minutes
- B. About 65 minutes
- C. About 75 minutes
- D. About 90 minutes
Show answer & explanation
Answer: C
With 225 minutes spread evenly across 150 items, 50 items represent one-third of the exam, or about 75 minutes. This is an inference from the duration and item count.37. A candidate answered 100 of the 150 Series 24 items correctly. Relative to the passing standard, what is the result?
- A. A pass, because 100 correct exceeds the required number
- B. A fail, because the required number of correct items is 105
- C. A pass, because 100 correct equals exactly 70%
- D. A fail, because the passing score is 75%
Show answer & explanation
Answer: B
Passing requires 70% of 150 items, which is 105 correct. A score of 100 correct falls short of 105, so the candidate does not pass.38. Which of the following correctly pairs two published characteristics of the Series 24 exam?
- A. 150 items and a 60% passing score
- B. 125 items and a 70% passing score
- C. 150 items and a 70% passing score
- D. 175 items and a 75% passing score
Show answer & explanation
Answer: C
The Series 24 has 150 multiple-choice items and a passing score of 70%.39. If a candidate must pay the exam fee twice due to a failed first attempt and retake, what is the total amount paid in fees, based on the published cost?
- A. $235
- B. $305
- C. $470
- D. $525
Show answer & explanation
Answer: C
Each attempt costs the published fee of $235, so two attempts total 2 × $235 = $470.