Series 63 Final Exam 2
A broker-dealer must keep all the following records, EXCEPT: A. Form ADV for any investment adviser for which the broker-dealer provides safekeeping services B. Original copies of all incoming client correspondence C. Signed copies of all discretionary account agreements executed by clients D. Copies of all order tickets
A. Form ADV for any investment adviser for which the broker-dealer provides safekeeping services
Which of the following written disclosure statements is prohibited under NASAA's Model Rule on Unethical Business Practices of Investment Advisers? A. If there is a monetary dispute, the client must agree to arbitration to settle the dispute B. The employees of the investment adviser may receive a commission for the sale of its recommended products C. The investment adviser is an affiliate of a broker-dealer D. The investment adviser receives a management fee for a mutual fund it recommends
A. If there is a monetary dispute, the client must agree to arbitration to settle the dispute
According to the Uniform Securities Act, when does a broker-dealer's registration expire? A. On December 31. B. When the Administrator declares it to be no longer effective. C. One year from the effective date. D. When the broker-dealer notifies the Administrator that it no longer has an office in the state.
A. On December 31. *must be renewed annually
A broker-dealer has been selling unregistered, nonexempt securities in nonexempt transactions without the permission of the state securities Administrator. What action would the state Administrator most likely take? A. Require the broker-dealer to offer letters of rescission B. There is no violation and therefore no action will be taken by the Administrator C. Bring an action in criminal court against the broker-dealer D. Sue the broker-dealer in civil court
A. Require the broker-dealer to offer letters of rescission
In a discussion with a client regarding mutual funds, an agent states that if dividends and capital gains distributions are reinvested, the client will be able to liquidate at a value higher than the original investment. Which of the following statements is TRUE? A. The statement is unethical B. Due to dollar-cost averaging, this is a legitimate statement C. The statement may be used if the broker-dealer is willing to make up any losses to the client D. If the statement is contained in sales literature filed with and approved by the Administrator, it may be used
A. The statement is unethical
Which of the following statements is NOT TRUE regarding the sharing of profits and losses in a client's account by an agent? A. The agent's profits and losses must be in proportion to the percentage of her contribution B. The sharing is strictly prohibited C. The consent of the agent's employer is required D. The client's consent is required
B. The sharing is strictly prohibited
When a broker-dealer exercises discretion in a client's account: A. The state must be notified that an agent will exercise discretion B. A power of attorney should be obtained before the settlement date C. A power of attorney should be obtained before the first order is submitted D. The state requires that a client provide the firm with a cash deposit
C. A power of attorney should be obtained before the first order is submitted
If a broker-dealer transfers a customer's securities into the firm's trading account, the firm is guilty of: A. Coordinating B. Asset allocation C. Commingling D. Parking
C. Commingling
Allied Advisory Services is a registered investment adviser with its home office in the state of Virginia. The minimum financial requirement for an investment adviser in Virginia is a net worth of $50,000. The firm would like to open an office and provide advisory services in Maryland. However, the minimum net worth requirement in Maryland is $100,000. What action should the firm take in order to open an office in Maryland? A. Increase its net worth by another $50,000 B. Post a $50,000 bond to cover the additional requirement in Maryland C. Leave its current net worth as is D. Increase its net worth to $150,000 to cover both states
C. Leave its current net worth as is
An agent selling investment products on the premises of a bank should always: A. Explain the differences between the FDIC and SIPC B. Disclose to clients that she is an employee of the broker-dealer and not an employee of the bank C. Collect signed waivers of compliance from clients D. Disclose to clients that these products are not FDIC-insured
D. Disclose to clients that these products are not FDIC-insured
An investment adviser with no place of business in a state will not be required to register with the Administrator under which of the following conditions? A. The adviser will provide advice only to 401(k) plans with assets of at least $500,000 B. The adviser has not been the subject of any disciplinary action C. The adviser has been in business for 10 years D. The adviser will provide advice only to mutual funds
D. The adviser will provide advice only to mutual funds
Under the Uniform Securities Act, broker-dealers are prohibited from ___________________________ client securities with the firm's securities.
commingling
An investment adviser that wishes to act as a broker for both a client and another person when effecting a securities transaction for a client must (1) ___________________ the capacity in which it is acting prior to the completion of the transaction and (2) _________________ from the clients.
disclose obtain written consent
According to the Uniform Securities Act, the minimum financial requirements of the state where an investment adviser maintains its principal place of business sets its _________________ _____________________.
registration requirements
Under the USA, an issuer may amend its registration statement to increase the __________________________ being sold after the statement has been declared effective by the Adminstrator.
Number of shares
One exception to the rule that an ad cannot omit the name of the broker-dealer is that broker-dealers and agents are allowed to publish a blind ad if it is a recruiting advertisement for a _________ ___________.
new hire
Molly has never invested in securities before, preferring to keep her funds in FDIC-insured accounts and CDs. An agent for a broker-dealer is attempting to convince Molly to invest in mutual funds. Molly states, "My main concern is the safety of my money. How do I know these mutual funds are safe?" The agent responds, "These products are regulated by the Securities and Exchange Commission and state securities laws." Which of the following statements is TRUE? A. This is not a violation because the statement is true. B. This is not unethical as long as the investment is suitable for Molly. C. This is misleading because mutual funds are federal covered securities and are not regulated at the state level. D. This is misleading because it implies that being regulated assures the safety of the investment.
D. This is misleading because it implies that being regulated assures the safety of the investment.
A broker-dealer is a syndicate member involved in a firm-commitment underwriting of a highly anticipated upcoming initial public offering (IPO). During the underwriting, the broker-dealer holds onto some of the shares in order to sell them at a later date since the shares are expected to rise in value. The broker-dealer's conduct is: A. Allowable only if the shares will be listed on a national exchange B. Acceptable since the broker-dealer is accepting risk that the shares may fall in value C. Acceptable if the issuer approves of the trade D. Unethical and prohibited under the Uniform Securities Act
D. Unethical and prohibited under the Uniform Securities Act
A sole proprietor who was registered as a broker-dealer is now charging a separate fee for securities advice. According to the Uniform Securities Act, the sole proprietor: A. Must change from sole proprietor to another business structure in order to become an investment adviser B. Must only register if the activities are called financial planning C. Has an exemption from registration as an investment adviser D. Would need to register as an investment adviser
D. Would need to register as an investment adviser
True or False: An investment adviser with no place of business in a state will not be required to register if the adviser will provide advice only to 401(k) plans with assets of at least $500,000.
FALSE Must be 401(k) plans with assets of at least $1,000,000
A Canadian broker-dealer has many clients who vacation frequently in the United States. In order to continue doing business with these customers while they are in the United States, the broker-dealer must file all the following material with the Administrator, EXCEPT: A. A Form B/D B. Proof of membership in a self-regulatory organization C. A copy of current registration filed in Canada D. A Consent to Service of Process
A. A Form B/D
Which of the following statements is NOT TRUE regarding licensing and registration standards for broker-dealers? A. A broker-dealer must notify the SEC that it intends doing business in a state before it can transact any business B. The Administrator may require that a broker-dealer have a minimum net capital as a condition of registration C. The Administrator may provide for a qualification examination, which may be written, oral, or both D. The Administrator may require registered broker-dealers to post bonds and may determine their conditions
A. A broker-dealer must notify the SEC that it intends doing business in a state before it can transact any business
After buying a large block of stock for herself, an agent is overheard telling another employee that after her purchase she recommended the same stock to a number of her clients who also purchased it. After completing the clients' orders, the agent sold her stock for a large profit. The agent's prohibited action is best described as: A. Front-running B. Making unsuitable recommendations C. Excessive trading D. Cross trading
A. Front-running
Under the Uniform Securities Act, which of the following activities of an investment adviser would constitute impersonal advisory services? A. Giving a client a list of mutual funds with the lowest expense ratios for the past five years B. Telling a client that investment XYZ will meet her investment objectives C. Telling a client to buy municipal bonds in order to reduce her tax liability D. Providing clients with a recommended list of mutual funds for their retirement accounts
A. Giving a client a list of mutual funds with the lowest expense ratios for the past five years
All order tickets must include which information? 1. Whether the order was solicited or unsolicited 2. The time and price at which the order was executed 3. The time at which the order was received and entered 4. The account for which the order was entered A. I, II, III, and IV B. II, III, and IV C. I and II D. I, II, and III
A. I, II, III, and IV
A mutual fund may be described as a no-load fund only if the fund has no: 1. 12b-1 fees in excess of .25% of the fund's average annual net assets 2. 12b-1 fees in excess of .50% of the fund's assets under management 3. Front-end loads 4. Back-end loads A. I, III, and IV only B. I and III only C. I, II, III, and IV D. I only
A. I, III, and IV only
According to the Uniform Securities Act, which TWO of the following statements are TRUE? 1.When an agent's license is suspended, the broker-dealer will be sanctioned 2. When an investment adviser's license is suspended, the investment adviser representative's license is no longer in effect 3. When a broker-dealer is suspended, the agent's license is no longer in effect 4. When an investment adviser representative's license is suspended, the investment adviser will be sanctioned A. II and III B. I and III C. II and IV D. I and IV
A. II and III
A broker-dealer is registered in State X, but not in State Y. The firm does not have an office in State Y, but does have some institutional clients in that state. The agent who handles these accounts has developed several contacts in State Y and wants to begin soliciting retail clients in State Y. The agent consults the Compliance Department. A new employee in that department tells the agent that he may solicit retail clients in State Y since he is exempt from registration in that state. What should the agent do? A. Refrain from soliciting retail clients in State Y until the agent and the broker-dealer are registered in State Y B. Begin contacting clients in State Y immediately since the agent has the approval of the broker-dealer C. Tell the registration department to begin the application process since the agent and the broker-dealer will need to register in State Y once the agent has five retail clients there D. Begin soliciting retail clients in State Y immediately since the agent is exempt from registration in that state as long as he does not maintain an office there
A. Refrain from soliciting retail clients in State Y until the agent and the broker-dealer are registered in State Y
What information is not included on the registration application for a broker-dealer? A. The names and addresses of the agents the broker-dealer intends to register B. The types of businesses in which the broker-dealer intends to engage C. The broker-dealer's current financial condition D. Whether the broker-dealer is a partnership or corporation
A. The names and addresses of the agents the broker-dealer intends to register
XYZ Inc. is an investment adviser. One of its institutional clients would like to sell 1,000 shares of ABC stock. XYZ believes that this would be a suitable investment for another institutional client. XYZ proposes to arrange a trade between the two clients and would charge each customer a small fee for its services. This would allow each client to receive a better price than either could obtain in the open market. Which of the following statements is TRUE in this situation? A. This is permitted if XYZ discloses to each client that it is acting as a broker for both parties in the trade and receives each client's written consent B. This is permitted if XYZ discloses to the buyer that it is representing the seller in the transaction and receives the buyer's written permission C. This is permitted since the two clients are institutional investors, but would not be permitted if they were not institutional investors D. This is not permitted under any circumstances unless XYZ waives any fee for arranging the transaction
A. This is permitted if XYZ discloses to each client that it is acting as a broker for both parties in the trade and receives each client's written consent
A client requests that her agent display a quote in a thinly traded security. The client is the majority shareholder in this security and the broker-dealer honors the request and displays the quote. Which of the following statements is TRUE? A. This would be permissible if the broker-dealer believed the quote was bona fide B. A broker-dealer is not permitted to enter quotes on behalf of its clients C. This would be considered an unethical business practice D. A broker-dealer may always enter a quote on behalf of a client
A. This would be permissible if the broker-dealer believed the quote was bona fide
An investor has been saving for her two children's college education using mutual funds in a taxable account. Her investment profile indicates that she is in a high tax bracket. The oldest child will be starting college in the fall. The younger one will be beginning college in three years. Which of the following allocations would you recommend for the investor's assets? A. 30% in an S&P 500 Index fund, 60% in municipal and corporate bond funds, and 10% in a money-market fund B. 25% in municipal bond funds, 25% in an S&P 500 Index fund, and 50% in money-market funds C. 50% in stock funds, 50% in bond funds D. 80% in long-term bond funds and 20% in money-market funds
B. 25% in municipal bond funds, 25% in an S&P 500 Index fund, and 50% in money-market funds
Which of the following is not a security as defined by the USA? QID: 1476521 A. A preorganization certificate B. A futures contract in precious metals C. A certificate of interest in a profit-sharing agreement D. A certificate of interest in a mining title
B. A futures contract in precious metals
Under the Uniform Securities Act, which of the following is NOT considered an offer or an offer to sell? A. An agent attempts to sell a security but the client refuses B. A gift of nonassessable securities C. The receipt of a warrant with the purchase of a bond D. A solicitation to buy a security for value
B. A gift of nonassessable securities
According to the NASAA Model Rule on the Ethical Business Practices of Investment Advisers, which of the following statements is TRUE regarding investment advisory fees charged to customers? A. Fees charged by an investment adviser on an annual basis may not exceed the gains in the portfolio during the same period B. Advisers may not charge fees that are unreasonably high in relation to fees charged by other advisers for similar services C. There is no limit on the size of the fee that may be charged as long as the customer understands and agrees to the method of computation and the method is disclosed in writing to the client D. Investment advisory fees may not exceed an annual rate equivalent to 5% of the total assets under management at the end of the computation period
B. Advisers may not charge fees that are unreasonably high in relation to fees charged by other advisers for similar services
An agent may split commissions with which of the following people? A. An agent of the same firm licensed in another state B. Another licensed agent of the same firm licensed in the same state C. An agent of another firm licensed in the same state D. An insurance company officer giving the agent business
B. Another licensed agent of the same firm licensed in the same state *Same firm same state
Market manipulation includes: 1. Disseminating false quotations or information 2. Buying a security on one exchange and selling it short on another 3. Creating a misleading appearance of trading in a stock A. I and II only B. I and III only C. III only D. I, II, and III
B. I and III only
Under the Uniform Securities Act, a person who sells securities in violation of state securities law is civilly liable for which TWO of the following penalties? 1. Fines 2. Interest 3.Punitive damages 4. Attorney fees A. I and IV B. II and IV C. I and III D. II and III
B. II and IV
An investment adviser representative is supervising a large, diverse portfolio for an elderly client. Although the account is nondiscretionary, the client almost always accepts the recommendations of the IAR. The portfolio contains a significant position in bonds that are denominated in foreign currency, and the IAR has become concerned the increased volatility in the currency market could damage the value of the client's investments. The IAR is thinking about recommending the use of foreign currency futures to hedge the foreign currency risk of the portfolio. Considering prudent investor standards, which of the following statements is TRUE? A. Since futures are very volatile, they should never be recommended or used by a fiduciary subject to prudent investor standards B. Since there are no categorical prohibitions on types of investments under prudent investor standards, the use of futures could be appropriate for a portfolio under certain conditions C. Under prudent investor standards, futures may be used in a portfolio only if the account is held outside the United States D. Since futures are not securities, they may not be recommended by an investment adviser representative subject to prudent investor standards
B. Since there are no categorical prohibitions on types of investments under prudent investor standards, the use of futures could be appropriate for a portfolio under certain conditions
A state securities administrator has decided that a broker-dealer is in danger of becoming insolvent. The Administrator orders the broker-dealer to maintain a minimum net capital of 200% of the federal minimum. How would this be viewed under NSMIA? A. State Administrators are not allowed to set net capital requirements for broker-dealers B. State Administrators are not allowed to impose requirements that are more stringent than SEC regulations C. State Administrators are free to set whatever requirements they feel are necessary to maintain fair and equitable markets within their own state D. The broker-dealer must first be offered a hearing on the matter
B. State Administrators are not allowed to impose requirements that are more stringent than SEC regulations
Under the Uniform Securities Act, which of the following choices is NOT a security? A. Non-traded REITs B. Stock futures C. Keogh Participation Units D. Options on currency futures
B. Stock futures
Which of the following actions would NOT be prohibited under the Uniform Securities Act? A. Telling clients that they are buying municipal general obligation bonds when they are really buying municipal revenue bonds B. Telling a client that certain securities issued by banks are exempt and that a prospectus is not required C. Soliciting transactions in unregistered, nonexempt securities while acting as an agent of a broker-dealer D. Knowingly backdating a confirmation
B. Telling a client that certain securities issued by banks are exempt and that a prospectus is not required
An agent, offered and sold an unregistered, nonexempt security to several of his clients in State A. These clients subsequently lost a considerable amount of money in this investment. Under the Uniform Securities Act, which of the following statements is TRUE? A. The clients may initiate a civil lawsuit to recover their losses with treble damages B. The clients may initiate a civil lawsuit to recover their losses C. This is not a violation of the Uniform Securities Act if the security is registered within 30 days of the sale D. The clients may initiate a criminal action against both the agent and the broker-dealer
B. The clients may initiate a civil lawsuit to recover their losses
A broker-dealer has filed an application to withdraw its registration. Which of the following statements is TRUE? A. The Administrator has two years after the date the firm's registration is withdrawn to initiate a proceeding for revocation of its license B. The withdrawal will become effective when the Administrator determines whether there is an action for revocation of the firm's license pending at the time the application was filed C. The withdrawal will become effective within 60 days after the application is received by the Administrator D.By filing an application to withdraw, the firm agrees to settle all charges currently pending without admitting or denying them
B. The withdrawal will become effective when the Administrator determines whether there is an action for revocation of the firm's license pending at the time the application was filed
Which of the following statements is NOT TRUE about federal covered advisers? A. They are not subject to registration as investment advisers under the Uniform Securities Act B. They are not subject to the antifraud provisions of the Uniform Securities Act C. Investment adviser representatives of federal covered advisers can be required to register in a state if they have a place of business there D. They are not subject to state record-keeping requirements
B. They are not subject to the antifraud provisions of the Uniform Securities Act
According to the Uniform Securities Act, which of the following persons must register with the state Administrator? A. A person who represents a non-exempt issuer in an investment banking transaction with a broker-dealer B. A person who represents a non-exempt issuer in sales to existing employees, and is not compensated C. A person who represents a non-exempt issuer in sales to the public D. A person who represents an exempt issuer in sales to the public
C. A person who represents a non-exempt issuer in sales to the public
A securities agent and an investment adviser have offices next door to each other. The adviser directs brokerage business to the agent for execution and, in return, the agent rebates the adviser 10% of the commissions generated by these transactions. According to NASAA Model Rules, this practice is: A. Acceptable, provided the agent is also registered as an investment adviser representative B. Unethical according to NASAA C. Acceptable, provided it is disclosed on the adviser's Form ADV D. A violation of the Uniform Securities Act
C. Acceptable, provided it is disclosed on the adviser's Form ADV
What action may the state securities Administrator take without giving the registrant an opportunity for a hearing? A. Bar a registrant B. Revoke a registration C. Cancel a registration D. Suspend a registration
C. Cancel a registration
Persons who violate federal insider trading regulations are subject to all of the following penalties, EXCEPT: A. Treble damages B. Civil lawsuits by traders C. FINRA fines D. Prison term
C. FINRA fines
Gene is an agent of Broker-Dealer Z. Broker-Dealer Z is underwriting a new offering of stock for ShortSight Company, and Gene has sold some of the stock to one of his clients. The client quickly decides she does not want to keep the stock and tells Gene to sell it at the market. Broker-Dealer Z has worked hard to win ShortSight's investment banking business and does not want to alienate the company. It has, therefore, told its agents to discourage customers from reselling the new stock too quickly. Gene holds on to his client's sell order for several days before finally executing it. The client actually receives a better price than she would have obtained if the order had been entered immediately. Which of the following statements is TRUE in this situation? A. Gene would have acted improperly only if the customer had lost money on the trade B. Gene acted improperly since new issues may not be resold within the first six months C. Gene acted improperly D. Gene acted properly in getting best execution for the client
C. Gene acted improperly
Which TWO of the following factors should be considered by an investment adviser when making recommendations to a client?A client's educational backgroundA client's attitude and values about investingThe client's professional experienceThe client's investment experience A. I and IV B. II and III C. II and IV D. I and III
C. II and IV
Which of the following statements is TRUE regarding the bond that is required to be posted under the Uniform Securities Act as a condition for registration? A. It protects clients against losses B. It protects against brokerage firm fraud C. It is used to cover the costs of possible legal actions D. Property can be accepted in lieu of a bond
C. It is used to cover the costs of possible legal actions
Sue Whitman is a high-ranking official in the Comptroller's Office of Zanzibar Securities. Her title is Executive Vice President. Under the Uniform Securities Act, Mrs. Whitman is: A. An agent since all officers of a securities firm are considered agents B. Considered an agent but would not need to pass a qualifying exam C. Not considered an agent since she is not involved in sales or trading D. Not considered an agent but could accept unsolicited orders
C. Not considered an agent since she is not involved in sales or trading
A radio program is broadcast from a bank on the weekend. Which of the following actions would be prohibited by the Administrator? A. Mentioning the advantages of investing in mutual funds without sending a prospectus B. Mentioning that the broker-dealer that sponsored this show is affiliated with the bank C. Omitting the name of the broker-dealer in any 30-second ads that run during the show D. Omitting the name of the bank during any 30-second ads that run during the show
C. Omitting the name of the broker-dealer in any 30-second ads that run during the show
When a security is sold under an exemption from registration under the Uniform Securities Act, the burden of proof for establishing the exemption is on the: A. Administrator B. Purchaser C. Person claiming the exemption D. SEC
C. Person claiming the exemption
In order for an investment adviser to maintain custody of funds and securities: A. At least $100,000 in Treasury bills must be posted as security B. The Administrator must give permission to the investment adviser C. The investment adviser must notify the Administrator and there must be no rule against custody D. The firm must have a three-year track record of no violations
C. The investment adviser must notify the Administrator and there must be no rule against custody
A broker-dealer may need to file all of the following material with the Administrator, EXCEPT: A. A form letter distributed to an adviser's current clients explaining the benefits of a variable annuity B. The prospectus for an oil and gas limited partnership C. The marketing materials for a new issue of municipal bonds D. The sales literature for an issue that will be sold within the Administrator's state only
C. The marketing materials for a new issue of municipal bonds
What information may an issuer change by amending its registration statement after it receives an effective date? A. The public offering price B. The underwriting spread C. The number of shares D. Nothing
C. The number of shares
The LEAST suitable investment for Mrs. McCarthy, a 70-year-old investor, would be a: A. Utility stock mutual fund B. Treasury note C. Zero-coupon bond D. Fixed annuity
C. Zero-coupon bond No income in a zero-coupon bond
Z Best, a broker-dealer, has filed an application for registration with the Administrator of New York. Three years ago, the firm was suspended from trading on the London Stock Exchange, due to the activities of a rogue trader. The firm's clients were not affected in any way. Upon receipt of the application, the Administrator may: A. Grant registration, because the evidence would be inadmissible in court B. Deny registration, since any suspension is a securities-related misdemeanor C. Grant registration since foreign governments have no jurisdiction in the U.S. D. Deny registration, as any action by a foreign securities regulator may result in a denial by the Administrator
D. Deny registration, as any action by a foreign securities regulator may result in a denial by the Administrator
According to the Uniform Securities Act, an Administrator is NOT allowed to demand that broker-dealers do which of the following? A. Approve their advertising prior to use B. Review their advertising for accuracy prior to use C. Ensure that their advertising is maintained and available for inspection D. File their advertising related to federal covered securities with their state Administrator prior to use
D. File their advertising related to federal covered securities with their state Administrator prior to use
Which TWO of the following actions would fall under the jurisdiction of a state securities Administrator? 1. The purchase of options through the Internet by a state resident 2. The sale of long-term certificates of deposit by a bank 3. The delivery of securities to a customer who is a resident of a particular state 4. The offer of securities by an out-of-state broker-dealer to a resident of the state A. III and IV B. I and II C. I and III D. I and IV
D. I and IV
An agent who is promoting a new issue knows that one of the officers of the issuing company was previously with another company that prospered because of her. The agent may: A. Suggest that the officer's involvement assures success B. Compare these two companies in reference to growth, past and future, because of this officer C. Not disclose this information D. Make reference that this certain officer was with the other company
D. Make reference that this certain officer was with the other company
All of the following securities are considered federal covered, EXCEPT a(n): A. Investment companies registered under the Investment Company Act of 1940 B. Regulation D, Rule 506 offerings C. Bank holding companies listed on national exchanges D. Regulation D, Rule 504 offerings
D. Regulation D, Rule 504 offerings
A woman in Alabama is reading a daily financial newspaper containing an advertisement that could be interpreted as an offer to sell securities. The newspaper is published in New Jersey, but its circulation is spread evenly throughout the United States. According to the Uniform Securities Act, which of the following statements is TRUE regarding the advertisement? A. The ad is an offer of a security in Alabama regardless of the domicile of the issuer B. The ad is an offer of a security in Alabama only if the issuer is domiciled in Alabama C. The ad is an offer of a security in New Jersey only D. The ad is not an offer of a security in any state
D. The ad is not an offer of a security in any state
A newly hired employee is applying for registration as an agent in State X. What information is NOT required to be disclosed by the agent on his application for registration (Form U4)? A. The fact that a real estate partnership controlled by the agent declared bankruptcy five years ago B. A felony charge that the agent received five years ago C. Any alias that the agent uses D. The fact that the agent is applying for a mortgage
D. The fact that the agent is applying for a mortgage
Under the Uniform Securities Act, which of the following choices BEST describes the term inspectorial powers? A. The state Administrator's power to apply the stop-order test B. The state Administrator's power to delegate responsibility to a self-regulatory organization C. The state Administrator's power to have special investigators review the records of registered investment advisers D. The state Administrator's power to subpoena records within and outside the state
D. The state Administrator's power to subpoena records within and outside the state
A customer executes a power of attorney granting her agent discretionary authority over her account. The agent, however, executes more transactions in the account than the client anticipated, generating a large number of commissions. Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices by Broker-Dealers and Agents, the agent has: 1. Abused discretion 2. Made unsuitable recommendations 3. Churned the account 4. Failed to disclose a material conflict of interest
I and III only
Under the Uniform Securities Act, an investment adviser who has no place of business in a state is exempt from registration in that state if the adviser provides advice in which of the following situations? 1. The adviser had no more than five clients in that state within the last 12 months 2. The adviser had no more than 15 clients in that state within the last 12 months 3. The adviser provided advice only to investment companies in that state 4. The adviser provided advice only to insurance companies in that state
I, III, and IV only
Which of the following investors are considered accredited under Regulation D of the Securities Act of 1933? 1. A portfolio manager at a mutual fund company 2. Banks 3. Any senior officer of a publicly traded company 4. Individuals with a net worth of $1 million or more
II and IV only
An agent selling investment products on the premises of a bank must always disclose that these products are/are not FDIC-insured, that they are/are not bank deposits or guaranteed by the bank, and that they are/are not subject to investment risks, including the loss of principal.
are not FDIC insured are not bank deposits or guaranteed by the bank are subject to investment risk
A person who sells securities in violation of state securities law is civilly liable for _____________, _____________, reasonable ______________ ____________, and ____________ costs.
principal interest attorney fees court costs