65 Test 2

Under the Securities Act of 1933, the term "person" could refer to which of the following?

A subdivision of a government. An unincorporated amateur athletic club. A nonprofit, charitable corporation.

If a woman turned 70 on July 16, 2011, when must the first required minimum distribution (RMD) be made from her IRA?

April 1, 2013.

Current Yield

Dividend per share/current price per share

Components of modern portfolio theory

Efficient set feasible set Capital Asset Pricing Model

Mr. Adam Samuels suffers a massive heart attack and dies at the age of 62. As part of his estate, there is an IRA with a current value of $170,000. A review of the IRA documents reveals that Mrs. Eve Samuels, the wife, is the primary beneficiary and their two children have been named as contingent beneficiaries. Eve is 50 years old and does not need the income from the IRA and would like to preserve the IRA for her children to inherit. Which of the following steps would you recommend Mrs. Samuels take?

Execute a rollover into an IRA in her name.

The Administrator has just notified Rockland Securities that its application to operate as a broker-dealer in this state is now effective. What parties would be considered registered?

Firm Officers Directors

In addition to the normal required filings, an investment adviser who maintains custody of client funds and or securities will be required to complete:

Form ADV-E. The Form ADV-E (E for Examination) is completed by every investment adviser who maintains custody of client assets. Then, the form is used by the independent accountant who performs the surprise annual examination of the adviser's records. The accountant is the one who submits the ADV-E to the SEC (or the state if appropriate).

Samantha Wells, a British citizen temporarily working in the United States, wants to form a business venture with other investors. She is looking for favorable tax treatment of earnings and losses. She also wants to limit the number of investors, but is willing to share control of the enterprise with others to attract them. What business form do you advise to her?

General Partnership.

Terry Bolton opens a UTMA for each of his sons, Josh, age 12, and Drake, age 14. Under current tax regulations, after deductions and exemptions, how will the income in the UTMAs be taxed?

Josh's income in excess of $2,100 is taxed at trust rates. Drake's income in excess of $2,100 is taxed at trust rates.

Securities issued by which of the following would be exempt from the registration requirements of the Uniform Securities Act?

Nonprofit organization. Exchange-listed security. Savings and loan association. Federal credit union.

Under the Securities Act of 1933, which of the following transactions is(are) exempt? Name 3 examples

Private transactions not involving the issuer or a broker-dealer Issuer transactions that do not involve a public offering Sales or offers limited to accredited investors

According to NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, which of the following is unethical?

Recommending a certain limited partnership investment to all clients.

The Rule of 72 tells us the approximate rate of return required to double an investment if we know the number of years until withdrawal.

Simply divide the number 72 by the number of years, and the resulting quotient is the required interest rate. In this example, dividing 72 by 9 years results in a needed rate of return of 8%.

Which of the following 2 are TRUE of a leveraged exchange-traded fund (ETF)?

The leveraged ETF may be purchased on margin. Securities within the leveraged fund portfolio may be purchased on margin.

In general, the most common form of organization chosen by hedge funds is

a limited partnership

In accordance with the stated provisions of the Investment Company Act of 1940, renewal of an open-end management investment company's investment adviser's contract must be approved by:

a majority vote of the fund's board of directors or of the outstanding voting shares as well as a majority vote of the noninterested members of the board.

Consent of the client before completion of a trade made between the firm and a client must be made when

an investment adviser will be acting in the capacity of a principal

The Securities Exchange Act of 1934 defines an insider as

an officer, director, or stockholder owning more than 10% of a company's outstanding voting equity.

When an agent engages in a fraudulent or prohibited practice, the Uniform Securities Act provides for:

criminal liability. civil liability. revocation or suspension of registration.

Compensation may take the form of, but is not limited to,

fees, payments for subscriptions, salaries, or commissions.

In response to an evolving marketplace, the SEC, through Release IA-1092, expanded the coverage of the definition of investment adviser to include

financial planners and pension consultants

A portfolio manager who is successful at market timing will

increase the beta of the portfolio prior to market rises A portfolio manager expecting a rising market would want to take advantage of that by increasing the beta of the portfolio. This would have the effect of increasing the potential volatility of returns. When things are going good, you want to be in higher beta stocks.

Many investors use trusts to avoid probate. However, not all trusts are designed to do so. Those that would avoid probate include

irrevocable trusts revocable trusts living trusts

After conducting an investigation, if the Administrator believes that a violation of a rule issued under the Uniform Securities Act is about to occur, he may:

issue a cease and desist order without prior hearing

A securities analyst who recommends allocating to industries based on changes to the business cycle would most likely be said to be

sector rotating

life insurance capital needs analysis

takes into consideration the future needs of the insured and family and then factors in how much needs to be filled in by life insurance.

Under the Securities Act of 1933, a registration statement for a security must be signed by:

the issuer's chief executive officer, chief financial officer, and a majority of the issuer's board of directors.

Under the Uniform Securities Act, a non-exempt transaction may take place in the state only if:

the security is registered, exempt, or federal covered.

Among the ways in which UGMA accounts differ from UTMA accounts is that:

the transfer of assets in a UTMA account can be deferred until the beneficial owner reaches as late as age 25; in a UGMA account, assets are transferred when the minor reaches the age of majority.

A market technician (technical analyst) deals primarily with

timing of activity and market trends, while a fundamental analyst centers on a particular industry or company within an industry and its relative health and market potential.

The retirement of outstanding bonds means that there:...

will be no future interest payments made. Since a major component of cash flow is a company's net income, this reduced expense would lead to increased income.