Module 5

are regulated by the Office of Comptroller of the Currency, if federally chartered.

Savings and loan associations (S&Ls)

the Investment Advisers Act of 1940.

The registration and regulation of investment advisers was established by

Securities and Exchange Commission (SEC)

Which federal agency extensively regulates the issuance and sale of corporate securities and administers the Securities Act of 1933 and the Securities Exchange Act of 1934?

III and IV

Which of the following FINRA licenses entitles the holder to provide investment advice to clients within the holder's primary state of residence? Series 7 Series 63 Series 65 Series 66

C) I, II, III, and IV

Which of the following are exempt from registration under the Investment Advisers Act of 1940? 1. Foreign private advisers 2. Charitable organizations and plans 3. Commodity trading advisers 4. Private fund advisers

The purchase and sale of securities in the secondary market

Which of the following is governed by the Securities Exchange Act of 1934?

D) I only

Which of the following is required to register as an investment adviser? 1. A broker or a dealer who receives special compensation for advice 2. A lawyer, accountant, teacher, or engineer whose performance of advisory services is solely incidental to the practice of his profession 3. A bank or a bank holding company, as defined by the Investment Advisers Act of 1940 4. A publisher of a bona fide newspaper or financial publication of general or regular circulation

I and IV

Which of the following statements regarding credit unions are CORRECT? Loans are typically offered at reduced interest rates. Earnings from loan interest and investments are paid to members in the form of shares. Deposits in a credit union are insured up to $100,000 per qualifying account by the National Credit Union Share Insurance Fund (NCUSIF). Each credit union member may use a vote to elect the board of directors.

I only

Which of the following statements regarding the Financial Industry Regulatory Authority (FINRA) is CORRECT? FINRA is a self-regulatory organization. FINRA has primary authority regarding the registration of investment advisers.

money market mutual funds.

All of the following types of accounts are covered by Federal Deposit Insurance Corporation (FDIC) insurance except

$575,000

Justin has the following assets: AssetsOwnershipBalanceChecking account (ABC Bank)Joint with brother$50,000Savings account (ABC Bank)Joint with son$100,000Savings account (ABC Bank)Justin$225,000Traditional IRA (ABC Bank is custodian)Justin$300,000Certificate of deposit (ABC Bank)Justin$75,000Money market mutual fund (ABC Bank Advisors)Justin$80,000 What amount of Justin's money is insured by the Federal Deposit Insurance Corporation (FDIC)?

I only

Liability under the Securities Act of 1933 would involve which of the following? New issues of investment securities or initial public offerings(IPOs). Publicly traded investment securities in the secondary market.

Mason has the appropriate licenses to sell variable life insurance and mutual funds.

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 bank.

A financial institution that allocates earnings from loan interest and investments to its members in the form of dividends is

II only

An individual is considering investing $350,000 through a national bank. Which of the following statements is CORRECT? If the individual deposits the funds in a savings account, the FDIC guarantees the full amount of his deposit. 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 an individual's savings account. If the funds are invested in a mutual fund sold by a bank, the FDIC affords the individual protection up to $250,000. If the individual deposits $175,000 into each of two savings accounts at the same bank in his name only, the full amount of his investment is afforded protection by the FDIC because neither account exceeds $250,000.

$85,000

Mark and Mandy have one child, Andy. Andy is a single parent with one daughter, Brianna, and is temporarily living with Mark and Mandy. Mark and Mandy have provided the information below to you, their financial planner, regarding their checking and savings accounts. Each owner has an equal right of withdrawal. Account OwnersType of AccountBalanceMark and MandyChecking$100,000Mark and MandySavings$30,000Mark, Mandy, and AndyChecking$60,000Andy and BriannaChecking$80,000 Based on the information provided, what is the total Federal Deposit Insurance Corporation (FDIC) coverage afforded to Mark, assuming the accounts are held at the same financial institution?

II and IV

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? Individual stocks Variable annuities Exchange-traded funds (ETFs) Open-end investment companies

I, II, and III

FINRA-licensed individuals are issued a Central Registration Depository (CRD) number. must meet continuing education requirements, known as the firm element, through their broker/dealer each year. must meet additional continuing education requirements (known as the "regulatory element") at regular intervals. must always maintain an active Series 7 license.

I, II, III, and IV

Which of the following are functions of banks? Accept deposits Pay interest on deposits Issue cashier's checks Provide safe deposit boxes

The Securities Act of 1934

Which of the following is the act that extended the regulation of securities to the secondary market or exchanges?

Securities Investor Protection Act of 1970

Which of the following regulations established the Securities Investor Protection Corporation (SIPC)?

C) I, II, and III

Which of the following requires an individual to be registered as an investment adviser under the Investment Advisers Act of 1940? The individual provides advice about securities. The individual is in the business of providing advice about securities. The individual receives compensation for providing advice. The individual is a CFP® practitioner.

I, III, and IV

Which of the following statements regarding credit unions are CORRECT? Credit unions make loans and accept deposits. Credit union deposits are insured by the FDIC. Earnings from investments are allocated to members in the form of credit union stock. A board of directors, elected by members, is responsible for providing leadership and setting credit union guidelines.

II, III, and IV

Which of the following statements regarding financial institutions is CORRECT? A trust company is also known as a thrift institution. A mutual fund company pools money from shareholders and invests the funds in various types of securities. A credit union, owned by its members, is a financial institution that accepts deposits and makes loans. A brokerage company is an intermediary that facilitates transactions involving sales of investments or real estate.

I, II, IV

Which of the following statements regarding securities and insurance regulation legislation are CORRECT? The Securities Act of 1933 requires the registration of new issues of securities or issues in the primary market. The Securities Investor Protection Act of 1970 is designed to protect individual investors from losses as a result of brokerage house failures. The Investment Company Act of 1940 assures investor safety of investment value in companies engaged primarily in investing, reinvesting, and trading in securities. The Investment Advisers Act of 1940 requires that persons or firms advising others regarding securities must register with the Securities and Exchange Commission.

I, II, and III

Which of the following statements regarding the National Credit Union Share Insurance Fund (NCUSIF) are CORRECT? The NCUSIF insures member accounts of all federal credit unions. The fund is administered by the National Credit Union Administration (NCUA). The NCUSIF is backed by the full faith and credit of the U.S. government. Up to $500,000 of a member's account balances are insured by the NCUSIF.

D) Investment Advisers Act of 1940

Which regulation generally requires delivery of a written disclosure statement detailing the investment adviser's background and business practices?

I and II

You have acquired the Financial Industry Regulatory Authority (FINRA) Series 6 and Series 63 licenses and are appropriately state insurance licensed. Which of the following are you permitted to sell? Mutual funds Variable life insurance Individual stocks Options