FINA 4352 Module 5
Lucas and Hailey each have an individual account and a joint account with Pineville Bank. In 2018, what is the maximum amount of FDIC-insured money they can each have at the bank? A) $500,000 B) $1,000,000 C) $250,000 D) $125,000
A
National banks are subject to regulation by which of the following independent federal agencies? I. Federal Reserve Board II. Securities and Exchange Commission (SEC) III. Federal Deposit Insurance Corporation (FDIC) IV. Office of the Comptroller of the Currency (OCC) A) I, III, and IV B) I, II, III, and IV C) II, III, and IV D) I and III
A
Olivia is a Financial Industry Regulatory Authority (FINRA) Series 6 licensed registered representative. Assuming she also holds the appropriate state insurance licenses, which of the following products can she sell? I. Individual stocks II. Variable annuities III. Exchange-traded funds (ETFs) IV. Open-end investment companies A) II and IV B) I, II, III, and IV C) III only D) II, III, and IV
A
The Financial Industry Regulatory Authority (FINRA) Series 66 license combines the license requirements for what other 2 FINRA licenses? I. Series 6 II. Series 7 III. Series 63 IV. Series 65 A) III and IV B) II and III C) II and IV D) I and II
A
Which of the following acts established the Securities and Exchange Commission (SEC)? A) The Securities Exchange Act of 1934 B) The Investment Company Act of 1940 C) The Securities Investor Protection Act of 1970 D) The Securities Act of 1933
A
Which of the following are exempt from registration under the Investment Advisers Act of 1940? I. Foreign private advisers II. Charitable organizations and plans III. Commodity trading advisers IV. Private fund advisers A) I, II, III, and IV B) IV only C) I, III, and IV D) I and II
A
Which of the following statements concerning the responsibilities of Securities and Exchange Commission (SEC) registered investment advisers is CORRECT? I. It is unlawful for any person registered as an investment adviser to use the initials RIA after her name unless the person also carries the CFP® certification. II. A registered investment adviser who ceases to practice as an investment adviser must file Form ADV-W as soon as possible. A) II only B) Neither I nor II C) I only D) Both I and II
A
Which of the following statements regarding the National Credit Union Share Insurance Fund (NCUSIF) are CORRECT? I. The NCUSIF is an agency of the federal government. II. The NCUSIF is backed by the full faith and credit of the state governments. III. Up to $500,000 of a member's account balances are insured by the NCUSIF. IV. The fund is administered by the National Credit Union Administration (NCUA). A) I and IV B) I, III, and IV C) II and IV D) I, II, and III
A
Which of the following types of accounts are covered by Federal Deposit Insurance Corporation (FDIC) insurance? I. Securities II. Certificates of deposit III. Money market mutual funds IV. Money market deposit accounts A) II and IV B) III and IV C) I, II, and III D) II, III, and IV
A
Chris has the following amounts on deposit in the same bank. Account Ownership Balance Savings account Chris $200,000 Traditional IRA Chris $300,000 Certificate of deposit Joint with wife $400,000 How much Federal Deposit Insurance Corporation (FDIC) insurance coverage does Chris currently have for his accounts? A) $650,000 B) $900,000 C) $700,000 D) $450,000
A The answer is $650,000. Each category of ownership (e.g., individual, joint, or retirement account) in the same institution is subject to a separate limit of $250,000. Chris has $200,000 of coverage on his individual account and $250,000 of coverage on the traditional IRA and $200,000 of coverage on the joint account, for a total of $650,000.
A financial institution that allocates earnings from loan interest and investments to its members in the form of dividends is A) a brokerage company. B) a credit union. C) a thrift institution. D) a savings and loan association.
B
A financial planner who wants to sell variable annuities must have which of the following licenses? I. A FINRA Series 6 or Series 7 license II. A state variable insurance license A) Neither I nor II B) Both I and II C) I only D) II only
B
Mason has decided to pursue a career selling financial products. He currently holds a Series 7 license and a state variable insurance license. In addition to the Series 63 registration required by his state, what other license(s) must he obtain to sell both variable life insurance and mutual funds? A) Mason must FINRA Series 65 license. B) Mason has the appropriate licenses to sell variable life insurance and mutual funds. C) Mason must obtain a FINRA Series 6 license. D) Mason must obtain a FINRA Series 24 license.
B
Rebecca is a Series 6 licensed registered representative. Assuming she also holds the appropriate state insurance licenses, she can sell which of the following financial products? I. Individual stocks II. Exchange-traded funds III. Variable life insurance policies IV. Open-end investment companies A) I and II B) III and IV C) II, III, and IV D) III only
B
The following statements regarding financial institutions are CORRECT except A) a brokerage company is an intermediary that facilitates transactions involving sales of investments or real estate. B) a trust company is also known as a thrift institution. C) a credit union, owned by its members, is a financial institution that accepts deposits and makes loans. D) an insurance company is primarily engaged in the business of furnishing risk protection to businesses and consumers.
B
Which of the following are NOT included in the definition of an investment adviser? I. Banks or bank holding companies II. Persons whose advice is limited to securities issued and guaranteed by the U.S. government III. Publishers of bona fide newspapers or financial publications of general and regular circulation IV. Lawyers whose performance of advisory services is solely incidental to the practice of their profession A) II, III, and IV B) I, II, III, and IV C) I, II, and IV D) I and III
B
Which of the following statements regarding savings and loan associations (S&Ls) is CORRECT? I. S&Ls are also known as trust companies. II. One function of S&Ls is to provide home loans. III. Federally chartered S&Ls are regulated by the Federal Deposit Insurance Corporation (FDIC). IV. Both checking and savings accounts are offered by S&Ls. A) I and II B) II only C) II and III D) III and IV
B
Which of the following statements regarding the Securities Act of 1933 are CORRECT? I. The Act requires the registration of new issues of securities. II. The Act identifies securities that are exempt from the registration requirements. III, The Securities and Exchange Commission (SEC) was established by this act. IV. The Act provides applicable procedures for issuing an initial public offering (IPO) of securities. A) III and IV B) I, II, and IV C) II and IV D) I and II
B
What federal legislation authorized the Securities and Exchange Commission (SEC) to regulate open-end investment companies and mutual funds? A) The Securities Exchange Act of 1934 B) The McCarran Ferguson Act of 1945 C) The Investment Company Act of 1940 D) The Securities Act of 1933
C
What legislation has as one of its primary purposes to provide investors with the full and fair disclosure of material information regarding initial public offerings (IPOs)? A) The Securities Investor Protection Corporation Act of 1970 B) Securities Exchange Act of 1934 C) Securities Act of 1933 D) The Maloney Act of 1938
C
Which of the following are applicable Financial Industry Regulatory Authority (FINRA) examinations for registered investment advisers (RIAs) that plan to sell securities? I. Series 65: Uniform Registered Investment Advisor Examination. II. Series 7: General Securities Registered Representative. III. Series 66: Uniform Combined State Law Examination. IV. Series 63: Uniform Securities Agent State Law Exam. A) I and III B) I, II, and IV C) I, II, III, and IV D) II, III, and IV
C
Which of the following is governed by the Securities Exchange Act of 1934? A) All of these B) New issues of securities in the primary market C) The purchase and sale of securities in the secondary market D) Registration of investment companies with the SEC (Securities and Exchange Commission)
C
Which of the following statements regarding credit unions are CORRECT? I. Loans are typically offered at reduced interest rates. II. Earnings from loan interest and investments are paid to members in the form of shares. III. Deposits in a credit union are insured up to $100,000 per qualifying account by the National Credit Union Share Insurance Fund (NCUSIF). IV. Each credit union member may use a vote to elect the board of directors. A) III and IV B) II and IV C) I and IV D) I, II, and III
C
Brittany wants to deposit or invest $280,000 through a national bank. Which of the following statements is CORRECT? A) If Brittany deposits $140,000 into each of two savings accounts at the same bank in Brittany's name only, both accounts are given full FDIC protection. B) If Brittany deposits the funds in a savings account, the FDIC guarantees the full amount of her deposit. C) If the funds are invested in a mutual fund sold by the bank, the FDIC provides protection up to $250,000. D) If the Federal Deposit Insurance Corporation (FDIC) guarantees the funds in a savings account, the excess of the savings deposit over $250,000 is not guaranteed for Brittany's savings account.
D
Cornerstone Company, owned by a bank, specializes in managing estates. The company is A) a thrift institution. B) an investment bank. C) a brokerage company. D) a trust company.
D
Which of the following is the act that extended the regulation of securities to the secondary market or exchanges? A) The Investment Company Act of 1940 B) The Securities Act of 1933 C) The Investment Advisors Act of 1940 D) The Securities Act of 1934
D
Which of the following statements regarding registration requirements to become an investment adviser is CORRECT? I. An investment adviser is any person who, for compensation, engages in the business of advising others as to the valuation of securities, either directly or through publications or writing. II. An investment adviser is any person who, for compensation, advises others in purchasing or selling securities. III. An investment adviser, who is registered with the Securities and Exchange Commission (SEC), must be competent. IV. An individual who wants to be an investment adviser must be sponsored by a broker/dealer before registration. A) III only B) II, III, and IV C) I, II, III, and IV D) I and II
D
Which regulation generally requires delivery of a written disclosure statement detailing the investment adviser's background and business practices? A) Securities Exchange Act of 1934 B) Securities Investor Protection Act of 1970 C) McCarran-Ferguson Act of 1945 D) Investment Advisers Act of 1940
D
Who of the following must register as an investment adviser with the Securities and Exchange Commission (SEC)? I. Jessica, an attorney, who advertises that she also gives investment advice II. Katherine, a Certified Public Accountant, who primarily provides investment advice and security analysis III. Grant, a CFP® professional, who receives compensation for publishing reports upon request by investors IV. Jim, an attorney, who solely advises his clients regarding venture capital opportunities A) I and III B) IV only C) II and IV D) I, II, and III
D
Doug has the following amounts on deposit at the same bank. Account Ownership Balance Savings account Doug$200,000 Traditional IRA Doug $300,000 Certificate of Deposit Joint with spouse $400,000 How much Federal Deposit Insurance Corporation (FDIC) insurance coverage does Doug have for his accounts at the bank? A) $900,000 B) $450,000 C) $700,000 D) $650,000
D The answer is $650,000. Each category of ownership (e.g., individual, joint, or retirement account) in the same institution is subject to a separate limit of $250,000. Doug has $200,000 of coverage on his individual savings account, $250,000 of coverage on the traditional IRA, and $200,000 of coverage on the joint account, for a total of $650,000.
