New Wrong Questions
Settlor functions
-choosing the type of plan or plan options; -amending the plan or changing plan options; -requiring employee contributions (e.g., a 401(k) plan); -terminating a plan.
Registration as an agent in a state is NOT required if the individual is:
-registered in his or her home state, and is contacting an existing customer in another state where the customer is vacationing and in which the agent is not registered -not physically located in the State and is only dealing with institutional investors or issuers in that State -not physically located in the State and only effects an isolated transaction with a customer in that State
II and IV
A NASDAQ listed issuer plans on offering 5,000,000 new shares in an "add on" offering that will be sold by its underwriters in all 50 States. Which statements are TRUE? I The security must be registered in each State II A notice filing and filing fee are required in each State III A prospectus must be filed in each State IV A consent to service of process must be filed in each State
D
A Registered Investment Adviser that trades securities on the behalf of customers is required to keep a record of the transaction that includes all of the following information EXCEPT the name of the: A. Investment Adviser Representative (IAR) who placed the order B. broker-dealer to which the order was sent for execution C. person at the Investment Adviser who recommended the transaction D. agent at the broker-dealer who executed the transaction
A
All of the following life insurance policies offer cash values to the policy owners EXCEPT: A. term life B. universal life C. whole life D. variable universal life
C
All of the following statements are true regarding an investment adviser that wishes to take custody of clients funds under the Investment Advisers Act of 1940 EXCEPT the investment adviser: A. must send an itemized statement of account to each customer at least quarterly B. must be audited, on a surprise basis, at least annually C. must segregate each customer's funds from those of other customers D. need not comply with the custody rules if the firm is already a registered broker-dealer
B
An Investment Adviser wishes to refer its largest and most sophisticated customers to a third party market timer to maximize their investment returns. Which statement is TRUE? A. The use of market timers is prohibited under the NASAA Statement of Policy B. Any arrangement between the IA and the market timing firm must be disclosed in the Form ADV Part 2A C. The arrangement between the IA and the market timing firm must be documented in a written contract D. The IA must review the performance of the market timing firm at least quarterly to evaluate its benefit to the referred customers
I and II
An agent of a broker-dealer puts up a website that promotes the benefits of dollar cost averaging, including the caveat that it is suitable for investors only if they can maintain their periodic payments regardless of economic conditions and that it requires a long-term investment time horizon. If the website is viewed by an individual in another State where both the broker-dealer and agent are not registered, which of the following disclosures are required on the site in order not to be in violation of the Uniform Securities Act in that State? I "The broker-dealer or agent may only transact business in the State if registered in the State or if exempted or excluded from registration" II "Follow ups or individualized responses to persons in the State that involve either effecting or attempting to effect transactions in securities will not be made absent compliance with State registration requirements or an applicable exemption or exclusion" III "The services being offered do not represent an offer to sell securities or a solicitation of an offer to buy the securities in the State unless the subject securities are registered or are subject to an applicable exclusion" IV "The Securities and Exchange Commission has not approved, nor has it disapproved of offering made in this advertisement"
II and III
An investment adviser has determined that it can register as a federal covered adviser. This means that the adviser: I solicits clients on behalf of other investment advisers II currently operates in at least 15 States III has at least $25,000,000 of assets under management IV provides financial planning to customers for compensation as a regular business
B
An investment adviser registered in State Y effects all of its portfolio transactions through a broker-dealer registered with the SEC and State Y. Regarding required filings from the broker-dealer in State Y, the Administrator of State Y: A. can only require the same filings as it requires from the investment adviser that does its portfolio trades through that broker-dealer B. can only require the filing of the broker-dealer's reports that are filed with the SEC C. can require the filing of any records demanded by the Administrator of State Y D. cannot require the filing of any records because of the federal supremacy of the broker-dealer filings that are required with the SEC
C
An investor in municipal bonds would be primarily concerned with which risk? A. market risk B. business risk C. regulatory risk D. credit risk
I and III
Annual renewal of registration as an agent or an investment adviser in each State is made by filing: I Form U-4 II Form U-6 III within 30 days of the date that renewal statements are sent out IV within 60 days of the date that renewal statements are sent out
I and IV
I agent is permitted to share in the gain and loss of a customer account if a joint account is opened with the customer and sharing is proportional to capital contributed II agent is not permitted to share in the gain and loss of a customer account if a joint account is opened with the customer and sharing is proportional to capital contributed III investment adviser representative is permitted to share in the gain and loss of a customer account if a joint account is opened with the customer and sharing is proportional to capital contributed IV investment adviser representative is not permitted to share in the gain and loss of a customer account if a joint account is opened with the customer and sharing is proportional to capital contributed
II and IV CTR is for money and is filed within 15 days
If an adviser is suspicious about a customer's account activity and believes that there may be illegal activity, then the adviser: I must file a CTR report with FinCEN II must file an SAR report with FinCEN III in 15 days IV in 30 days
D
If an investment adviser puts its records on microfiche or electronic storage media, all of the following statements are true EXCEPT: A. the paper or hard copy form, as those records are kept in their original form, must be preserved and maintained for 5 years B. the duplicate copy of the record may be immediately reproduced in the medium chosen and must be preserved and maintained for 5 years C. the original record and duplicate copy of the record in the chosen medium must be stored in separate locations for 5 years D. the duplicate copy must be preserved in a format that is alterable, rewritable and erasable
Tax Benefits
Index funds don't offer __ ____, real estate does
Retainer Fee
Investment Adviser's can charge a ______ ___
Federal Covered Advisers
Investment advisers to investment companies, no matter the dollar amount, are considered ___ ____ ___
B
Tactical asset allocation is a method of: A. stock selection B. market timing C. portfolio rebalancing D. portfolio diversification
II and III
The Administrator: I is permitted to deny an exemption retroactively II cannot deny an exemption retroactively III can vacate a stop order retroactively IV cannot vacate a stop order retroactively
B
The Net Present Value of an investment is lower than "0." This means that the: A. rate of return from the investment is greater than the discount rate used in the computation B. rate of return from the investment is lower than the discount rate used in the computation C. investment will produce a return that is greater than the rate of inflation D. investment will produce a return that is lower than the rate of inflation
A
The primary reason for a customer to make a tax shelter investment is the: A. economic viability of the project B. immediate deductions generated by the project C. immediate tax credits generated by the project D. future capital gains generated by the project
B
Transactions that violate the Uniform Securities Act are voidable at the option of the: A. Issuer B. Purchaser C. Seller D. Administrator
I and IV
Under NASAA recordkeeping rules for investment advisers, any advertisement, circular or other communication must be retained: I if it is circulated to 2 or more persons II if it is circulated to 10 or more persons III for a minimum of 3 years IV for a minimum of 5 years
D
Under NASAA rules, Investment Advisers must retain copies of all advertising for: A. 3 years in an easily accessible place with the first year's records kept in the principal office of the adviser B. 3 years in an easily accessible place with the first 2 years' records kept in the principal office of the adviser C. 5 years in an easily accessible place with the first year's records kept in the principal office of the adviser D. 5 years in an easily accessible place with the first 2 years' records kept in the principal office of the adviser
B
Under NASAA rules, if a customer wishes to trade a margin account prior to returning the signed margin agreement, such an action is: A. prohibited B. permitted only if the customer returns the signed margin agreement promptly C. permitted only if the customer returns the signed margin agreement within 1 day of the first transaction in the account D. permitted only if the customer returns the signed margin agreement within 3 days of the first transaction in the account
A
Under the Investment Advisers Act of 1940, all of the following are exempt or excluded from registration as investment advisers EXCEPT persons who give advice: A. to other investment advisers B. solely to insurance companies C. relating to obligations guaranteed as to principal and interest by the U.S. Government D. to customers within one State, where the investment adviser is a resident of that State; and advice is only rendered on securities not traded on a national exchange
60 Days
Under the Investment Advisers Act of 1940, if the SEC suspends or revokes the registration of an investment adviser registered, an appeal may be filed in Federal Court within how many days?
B
Under the Uniform Securities Act, an advertisement for advisory services published in a local newspaper is: A. not considered to be an offer B. an offer only in the State where the newspaper is published C. an offer in any State where the newspaper is distributed D. an offer in the State where the advertiser is headquartered
I, II, IV
Under the Uniform Securities Act, for an agent to share in the gains and losses of a customer account, which statements are TRUE? I The customer must agree to the arrangement in writing II The broker-dealer must agree to the arrangement in writing III The Administrator must agree to the arrangement in writing IV Sharing is permitted only in direct proportion to capital contributed to the account
A
Under the Uniform Securities Act, when is an agent permitted to use the term "approved" when discussing his or her registration with a customer? A. If the agent solely states that such approval relates only to the agent meeting the Administrator's qualification requirements B. If the agent provides the customer with a written statement that he or she has been approved by the Administrator C. If the agent passes the Series 63 or Series 66 examination D. If the agent makes this disclosure to fewer than 10 customers in a 12 month period
All
Under the Uniform Securities Act, which methods of storage are permitted to retain required records? I Microfilm II Microfiche III Digital Storage IV Computer Tapes
B
Under the provisions of the Uniform Securities Act, net capital requirements for broker-dealers must be kept in accordance with the provisions of the: A. Securities Act of 1933 B. Securities Exchange Act of 1934 C. Investment Advisers Act of 1940 D. Uniform Securities Act as adopted in that State
A
When an agent changes employment from one broker-dealer to another, the agent's registration must be transferred: A. immediately B. within 10 days C. within 30 days D. at renewal time
II and IV
Which of the following persons would be defined as "sales representatives"? I A clerical employee of a broker-dealer who does not effect securities trades and does not receive commissions II A clerical employee of a broker-dealer who effects securities trades and receives commissions III A partner of a broker-dealer who does not effect securities trades and who receives commissions IV A partner of a broker-dealer who effects securities trades and who does not receive commissions
II and IV
Which of the following statements are TRUE? I The Administrator may suspend or revoke a registration for the sole reason that it is "in the public good" II If a broker-dealer registration is suspended, the agent's license is suspended III If an agent's license is suspended, the broker-dealer's license is suspended IV Broker-dealers, but not agents, may have their registration revoked for failing to supervise subordinates
B Only civil liability can be offset by rescission. Criminal liability cannot be offset by rescission. The statute of limitations on civil cases is 3 years (but no later than 2 years after discovery); for criminal cases it is 5 years.
Which statement about penalties under the Uniform Securities Act is TRUE? A. Criminal liability may be offset by rescission; the statute of limitations is 3 years B. Civil liability may be offset by rescission; the statute of limitations is 3 years C. Criminal liability may be offset by rescission; the statute of limitations is 5 years D. Civil liability may be offset by rescission; the statute of limitations is 5 years
A
Which statement is TRUE regarding the State Administrator's authority to establish recordkeeping rules for broker-dealers? A. The Administrator can only establish recordkeeping rules that are the same as those set by the SEC B. The Administrator cannot establish recordkeeping rules for broker-dealers C. The Administrator has the power to set recordkeeping rules if it is in the public interest D. The Administrator can neither establish nor enforce recordkeeping requirements for broker-dealers
I and II
Which statements are TRUE about required notice to the Administrator? I When an agent begins or terminates a connection with a broker-dealer, the agent and broker-dealer must notify the Administrator promptly II When an agent begins or terminates those activities which make him or her an agent, the agent and broker-dealer must notify the Administrator promptly III When an agent begins or terminates a connection with a broker-dealer, the agent and broker-dealer must notify the Administrator within 30 days IV When an agent begins or terminates those activities which make him or her an agent, the agent and broker-dealer must notify the Administrator within 30 days
