Series 65 Mid Term - Incorrect questions

After an investigation, the Administrator wishes to have the registration of an investment adviser revoked. In order to do so, all of the following are true EXCEPT

A) the investment adviser may elect to withdraw its registration B) an appeal may be filed within 60 days of the final order C) the investment adviser has a right to a hearing D) the Administrator must be able to point to specific facts of law violated by the investment adviser A.

MT Securities is a broker-dealer registered in 42 states. MT Securities makes a market in over 100 different stocks and participates in the underwriting of approximately 22 IPOs per year. Which of the following actions would be prohibited under NASAA's Statement of Policy on Dishonest and Unethical Business Practices of Broker-Dealers and Agents?

Acquiring shares of an IPO as part of the underwriting syndicate and holding a small portion for the firm's investment account, hoping to gain from market appreciation

Which of the following persons is required to register with the SEC as a federal covered adviser?

An adviser that gives advice to registered investment companies only

Which of the following statements best explains an agency cross transaction for an advisory client?

An agency cross transaction for an advisory client means a transaction in which a person acts as an investment adviser in relation to a transaction in which the investment adviser, including an investment adviser representative, acts as a an agent for both the advisory client and another person on the other side of the transaction

Under the Investment Advisers Act of 1940, which of the following would NOT meet the criteria of persons associated with an investment adviser?

An individual whose only function is posting trades to client accounts

Which of the following corporate actions would have an effect on the company's working capital?

Calling in a portion of a 20-year bond at par

An investor would be unlikely to use internal rate of return to analyze the potential return for which of the following investments?

Common stock

The registration requirements of the Securities Act of 1933 would NOT apply to which of the following?

Fixed annuities and other fixed insurance contracts

Under the Uniform Securities Act, which of the following would be least likely to be civilly liable for making false registration statements, using a prospectus that is untrue, or failing to meet the prospectus delivery requirements of the act?

Every stockholder named in the registration statement

Which of the following firm's earnings are likely to exhibit the greatest degree of sensitivity to the business cycle?

Furniture producer

An investment adviser who has custody of customer funds and securities discovers that its net worth has dropped below the required minimum under the rules of the state Administrator. Under NASAA rules, the adviser must do which of the following? Notify the Administrator by the close of business on the day after discovery File a report of its financial condition with the Administrator no later than the close of business on the day after notification Cease doing business

I and II

The Uniform Securities Act considers which of the following to be investment advisers subject to registration in the state? I. An adviser with no place of business in the state who advises wealthy customers in the state on a fee basis only II. An adviser with a place of business in the state whose total fee income in the state amounts to $150 III. An adviser with no place of business in a state who only provides advice on fixed annuities IV. An adviser with a place of business in the state who only provides advice to open-end investment management companies registered under the Investment Company Act of 1940

I and II

Which of the following statements are TRUE? I. When an investment adviser representative begins or terminates employment with an adviser registered under the USA, only the investment adviser must notify the Administrator. II. When an investment adviser representative begins or terminates employment with a federal covered adviser, only the investment adviser representative must notify the Administrator. III. When an agent of a broker-dealer leaves the firm, only the broker-dealer must notify the Administrator. IV. When an investment adviser representative or a registered agent of a broker-dealer terminates employment, notice must be given to the Securities and Exchange Commission.

I and II

ABC Securities is a broker-dealer registered with the SEC and domiciled in State M. ABC Securities would not be defined as a broker-dealer in State N under the Uniform Securities Act if it had no offices in State N and I. its only clients were insurance companies II. it had contact with fewer than 6 State N residents in any 12-month period III. its only solicitation of State N residents was through radio advertisements originating in State M but received in State N IV. it occasionally engaged in firm commitment underwriting with issuers based in State N

I and IV

The Investment Advisers Act of 1940 requires that investment advisers make certain disclosures to their customers through the delivery of the adviser's brochure. However, there are instances where the act grants an exemption if the client is I. a broker-dealer II. an insurance company III. an investment company IV. a person receiving impersonal advice for which the annual fee is less than $500

III and IV

An agent of a broker-dealer is currently doing business in one state and would like to conduct business in another state. When checking with the firm's compliance department, the agent would be told which of the following?

If the agent is a partner, officer, or director and held that position at the time the broker-dealer was registered in that state, the individual need not register separately.

Which of the following statements is CORRECT regarding an unsolicited trade in an unregistered nonexempt security?

The Administrator may, by rule, require that the customer acknowledge, upon a specified form, that the sale was unsolicited and that a signed copy of each such form be preserved by the broker-dealer for a specified period.

The Uniform Securities Act permits amendments to a registration statement after its effective date so as to change which of the following?

The number of shares to be offered

An investment adviser may borrow from all of the following clients EXCEPT

a mortgage broker who helped the adviser negotiate mortgage terms for its office building

The consumer price index is best described as

a weighted average cost for a basket of goods and services

A consent to service of process allows the Administrator to

be the registrant's attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against the registrant, or the registrant's successor

Centripetal Investment Advisers (CIA) has its principal office in State X and is also registered in States Y and Z. CIA would be considered to be maintaining custody of client assets in all of the following cases EXCEPT

checks made out to 3rd parties are forwarded within 3 business days

XYZ Securities, Inc., a FINRA member broker-dealer, is registered in all 50 states. XYZ has its principal office in State C and a branch office in State A. If the State U Administrator wished to examine certain financial records of XYZ's, the Administrator would be able to do all of the following EXCEPT

examine those records located in State U

Federal covered securities, as defined under the Uniform Securities Act,

include shares of an investment company registered with the SEC under the Investment Company Act of 1940

Anyone who represents an issuer in effecting transactions between the underwriter and the issuer

is excluded from the definition of agent under the Uniform Securities Act

Under the NASAA Model Custody Rule, an investment adviser would be permitted to take or have custody of any securities or funds of any client if

notification was given to the Administrator that he has or may have custody and custody was not prohibited by that state's rules

A broker-dealer (BD) registered in multiple states must meet the record retention requirements of

the SEC

When registering a security under the Uniform Securities Act, the registrant must indicate all of the following EXCEPT

the effective date of the offering

An agent discovers that he has sold a customer an unregistered, nonexempt security that she thought was exempt. The broker-dealer offers to buy it back on behalf of the agent. Under the Uniform Securities Act,

this is legal and is called rescission

Seven years ago, Sarah Smith was convicted of possession of a controlled substance in a state where that violation is considered a felony. Sarah has just filed an application for registration as an agent with Kapco Securities, a registered broker-dealer in a state where that violation is only considered a misdemeanor. When viewing this agent's application, the Administrator will

treat the crime as any felony

An investment adviser representative may share in the profits and losses of a customer's account

under no conditions

The NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents includes prohibitions against certain practices designed to manipulate market prices of securities. An activity that would fall within the spectrum of the prohibitions would be

wash trades