Series 65: Dean Tinney Kaplan Practice Test/Notes

The current yield of a callable bond selling at a premium is calculated A. As a percentage of its market value B. To its maturity date C. As a percentage of its par value D. As a percentage of its call price

As a percentage of its market value

Low risk tolerance and high liquidity needs are typical characteristics of which type of institutional investor? A. Banks B. Defined benefit pension plans C. Trusts D. Foundations

Banks

Which of the following bond diversification strategies involves purchasing only short-term and long-term bonds? A. Immunization B. Bullet strategy C. Laddering strategy D. Barbell strategy

Barbell strategy

Sharon Smith is an investment adviser representative w/ Highwater Advisers, a federal covered investment adviser w/ its principal office in State X. Sharon provides advisory services to a bank located in State X, a state in which she has no place of business. Under current regulations, A. Because Sharon's client is a bank, she doesn't have to register as an IAR in State X B. Because Sharon has a client in State X, registration as an IAR would be required in State X C. Because Sharon has no place of business in State X, she doesn't have to register as an IAR in State X D. Because Highwater's principal office is in State X, Sharon would be required as an IAR in State X

Because Sharon has no place of business in State X, she doesn't have to register as an IAR in State X

The maximum contribution to an IRA is the lesser of 100% of earned income or...

$6k

One year ago, ABC Widgets, Inc., funded an expansion to its manufacturing facilities by issuing a 20-year first mortgage bond. The bond is secured by the new building and land. The bond was issued with a 5.5% coupon and is currently rated Aa. The current market price of the bond is 105 resulting in a current yield of approximately A. 5.61% B. 4.99% C. 5.5% D. 5.24%

5.24%

A client of a broker-dealer turns in an order to purchase 10,000 shares of XYZ stock on the NYSE. This would be A. Churning B. Arbitrage C. Front running D. A block trade

A block trade

If the "three A's" (action/asset/amount) are present, it is not considered what?

A discretionary order

In a scheduled premium variable life insurance policy, all of the following are guaranteed except A. A minimum cash value B. A minimum death benefit C. The ability to borrow at least 75% of the cash value after the policy has been in force at least 3 yrs D. The right to exchange the policy for a permanent form of insurance, regardless of health, within the first 24 months

A minimum cash value

If you're an IAR of a federally covered adviser, all you need to register is where you have...

A place of business

One of the most significant features of the UPIA is the ability of a trustee to delegate investment decisions to a qualified third party. Delegation is permitted as long as the fiduciary to whom the powers are delegated A. Considers the risk/reward tradeoff of each individual security in the portfolio B. Acts w/ skill and caution C. Avoids high-risk investments D. Avoids diversification

Acts w/ skill and caution

Under the USA, an investment adviser's current clients must be delivered a brochure A. Quarterly if the adviser has both discretion and custody B. Within 48 hrs of renewal C. Annually whether or not the adviser has custody or discretion D. Annually, but only if the adviser has neither custody nor discretion

Annually whether or not the adviser has custody or discretion

An investor following the buy and hold model of investing would most likely be A. Holding stock until its ex-dividend date and then selling it to capture the dividend B. Buying a stock as a long-term investment to reach a specific goal C. Buying a stock during the recovery cycle and selling at the peak D. Looking to shelter income from taxation

Buying a stock as a long-term investment to reach a specific goal

What beats inflation over the long-term?

Common stock

Which of the following has the least exposure to inflation risk? A. Preferred stock B. Cash C. Fixed annuity D. Common stock

Common stock

If near-term liquidity is the only objective for a client, which of the following pairs of investments represents the most/least liquid? A. 10-year corporate bonds/U.S. T-bills B. Annuity units of a variable annuity/unit in a direct participation program (DPP) C. Common stock listed on the New York Stock Exchange/unit in a direct participation program (DPP) D. Variable annuity accumulation unit/money market mutual fund shares

Common stock listed on the New York Stock Exchange/unit in a direct participation program (DPP)

A free trade agreement is entered into between Country A and Country B. As time goes on, the value of Country A's currency decreases while that of Country B increases. The effect of this will likely be that A. The free trade agreement will be abrogated B. Country A's imports from Country B will increase C. Country A's exports to Country B will decrease D. Country B's imports from Country A will increase

Country B's imports from Country A will increase

The Administrator thinks they're ___ and the SEC is ___

God

The Investment Company Act of 1940 requires that a mutual fund do which of the following? 1. Provide a monthly balance sheet to investors 2. Have $100k minimum capitalization prior to making a public offering 3. Provide semiannual reports to shareholders 4. Not acquire more than 5% of the outstanding shares of another registered investment company

Have $100k minimum capitalization prior to making a public offering and provide semiannual reports to shareholders

A measurement of investment return that takes the time value of money into consideration is A. Risk-adjusted rate of return B. Real rate of return C. Internal rate of return (IRR) D. Holding period return

Internal rate of return

Direct participation programs (DPP) are not...

Liquid

One of the prohibited practices under the Uniform Securities Act is market manipulation. Which of the following are examples of a broker-dealer engaging in that practice 1. Arbitrage 2. Churning 3. Matched orders 4. Wash trades

Matched orders and wash trades

A client has 100 shares of GHI when the stock undergoes a split. After the split, the client has A. A proportionately increased interest in the company. B. Greater exposure. C. No effective change in the value of the position. D. A proportionately decreased interest in the company.

No effective change in the value of the position

Bond prices are quoted as a percentage of A. Market value B. Stated value C. Par value D. Conversion value

Par value

What does hedging mean?

Protecting your investment

As a result of an inheritance, Danielle now owns a large position in XYZ stock. She is concerned that the stock may decline in the upcoming months while she is deciding what to do w/ the investment. What type of investment strategy could she employ to protect the stock from substantial downside risk? A. Write call options on XYZ B. Purchase put options on XYZ C. Write put options on XYZ D. Purchase index put options

Purchase put options on XYZ

If a corporation issues mortgage bonds, all of the following would be affected except A. Shareholder's equity B. Total liabilities C. Working capital D. Total assets

Shareholder's equity

What keeps pace w/ inflation?

TIPS

News reports indicate that the wheat crop scheduled to be harvested in 3 months will be much larger than normal. To hedge, a wheat farmer would most likely A. Take a short position in wheat futures B. Grow corn instead C. Take a long position in wheat futures D. Sell wheat stocks short

Take a short position in wheat futures

The Administrator has just notified Rockland Securities that its application to operate as a broker-dealer in this state is now effective. Which of the following parties would be considered registered? 1. The firm 2. Its officers functioning as agents 3. Its directors functioning as agents 4. Its agents

The firm, its officers functioning as agents, and its directors functioning as agents

When attempting to construct the optimal portfolio, the investment adviser is looking to obtain A. The maximum return for the least risk B. The maximum return w/ the greatest risk C. Returns that fall within the efficient frontier curve D. The maximum return in the shortest time period

The maximum return for the least risk

What constitutes taking discretion?

When an agent determines action, assets, or amount

If you want to start your own mutual fund you need...

$100k

What is the maximum amount a taxpayer may contribute each year to a Coverdell Education Savings Account (ESA) for one student? A. $1,000 B. $100 C. $2,000 D. $500

$2,000

A married couple has lived in the same home for 40 years and now, w/ the children all gone, they've decided to sell and move to a retirement village. They purchased the home for $80k and have accepted a contract for $800k. The tax consequences of this sale is A. $0 capital gain B. $720k capital gain C. $470k capital gain D. $220k capital gain

$220k

If your 39-year-old customer is the sole owner of a business, earns $260k a year, and makes the maximum contribution to a Keogh plan, how much money may he contribute to his IRA in 2022? A. $64k B. $0 C. $6k D. $56k

$6k

A client owns 300 shares of BACH common stock in a margin account. The stock was originally purchased at a price of $40 per share and the Reg. T call was met. If the BACH is now selling for $50 per share, disregarding interest charges, the client's equity is now A. $3,000 B. $1,000 C. $6,000 D. $9,000

$9,000

According to NASAA's Statement of Policy on Unethical or Dishonest Business Practices of Broker-Dealers and Agents, in which of the following situations has an agent acted improperly in placing a client's order? A. An elderly client w/ an individual account is in the hospital, and her daughter calls the agent to request a liquidation of assets to provide $10k for the payment of medical expenses. The agent refuses to place the order. B. A client asks the agent to buy 1,000 shares of a specific high-quality technology stock this week for her non discretionary account. The agent places an order promptly for 1,500 shares b/c the market has begun to take off. By the end of the day, the stock is 5 points higher than the purchase price. C. After a client's death, an agent receives instruction from a court-appointed administrator to liquidate the account; the agent sells all securities in the account at a loss. D. A client

A client asks the agent to buy 1,000 shares of a specific high-quality technology stock this week for her non discretionary account. The agent places an order promptly for 1,500 shares b/c the market has begun to take off. By the end of the day, the stock is 5 points higher than the purchase price.

A registered broker-dealer would not be able to open an account for A. A deceased individual B. The American Cancer Society C. The sovereign government of Poland D. A convicted felon

A deceased individual

Being a limited partner in a direct participation program is analogous to being A. An agent of a broker-dealer B. A member of the board of directors of a corporation C. A holder of secured corporate debt D. A holder of common stock in a corporation

A holder of common stock in a corporation

If the Smiths want to open a joint account at AAA Securities Corporation and have their securities transferred to their 3 daughters upon the death of the last surviving account holder, their agent should recommend that the Smiths open A. A joint tenancy account w/ right of survivorship and execute a transfer on death (TOD) registration form B. A joint tenancy w/ right of survivorship C. A tenants in common account D. Individual accounts in the name of each daughter

A joint tenancy account w/ right of survivorship and execute a transfer on death (TOD) registration form

A type of trust created by a will that becomes operative at death is A. A testamentary trust B. A Q-tip trust C. A living trust D. A revocable trust

A testamentary trust

A registered investment company whose portfolio consists of equity securities and the portfolio doesn't change in response to market conditions is probably A. A passively-managed mutual fund B. A closed-end investment company C. An ETN D. A unit investment trust

A unit investment trust

If you knew a given stock had a 40% chance of earning a 10% return, a 40% chance of earning 20%, and a 20% chance of earning -10%, the stock would have A. A total return of 10% B. An expected rate of return of 10% C. An annualized return of 10% D. A real rate of return of 10%

An expected rate of return of 10%

Yield curve analysis plays an important role as a benchmarking and forecasting tool for the future direction of interest rates. In most cases, this analysis involves examining A. Bonds of varying quality of similar maturities B. Bonds of a single issuer over varying maturities C. Bonds of varying quality over a number of maturities D. Bonds of similar quality over varying maturities

Bonds of a single issuer over varying maturities

Which of the following transactions are prohibited? 1. Borrowing money or securities from a high-net-worth customer 2. Selling speculative or hot issues to a retired couple of modest means on a fixed income 3. Failing to follow a customer's orders to prevent investment in a security not adequately covered by well-known securities analysts 4. Backdating confirmations for the benefit of the client's tax reporting

Borrowing money or securities from a high-net-worth customer, selling speculative or hot issues to a retired couple of modest means on a fixed income, failing to follow a customer's orders to prevent investment in a security not adequately covered by well-known securities analysts, and backdating confirmations for the benefit of the client's tax reporting

In general, the favored way of measuring the performance of a money manager is by A. Examining the tax efficiency of the portfolio B. Comparing her performance to a relevant benchmark C. Measuring the fees charged against the total return D. Comparing her performance to that of the investor

Comparing her performance to a relevant benchmark

Which of the following statements about diversification through asset class allocation are true? 1. Diversification involves investing a portfolio in at least 20 different securities of the same asset class 2. Diversification is a way to reduce unsystematic risk in a portfolio 3. Diversification is a defensive investment strategy

Diversification is a way to reduce unsystematic risk in a portfolio and diversification is a defensive investment strategy

In making suitable investment recommendations, the least significant element would be the client's A. Death and disability needs B. Current income C. Educational level D. Retirement needs

Educational level

A U.S. dollar-denominated bond issued by a non-American company (or government), sold outside of the United States and the issuer's country, but for which the principal and interest are stated and paid in U.S. dollars is best described as A. Brady bond B. Eurobond C. Eurodollar bond D. Yankee bond

Eurodollar bond

Internal rate of return turns PV into...

FV

If an investment adviser purchases a research report from the advisory arm of a nonaffiliated broker-dealer, the adviser may distribute this report to clients A. Under no circumstances B. Provided a fee is paid to the broker-dealer for each copy distributed C. If the clients are told that the report was prepared by a third party D. Without restriction

If the clients are told that the report was prepared by a third party

Real rate of return has to do with...

Inflation

An investor is analyzing the impact of the specific type of risk affecting bonds b/c the fixed cash payments that they deliver may become less valuable. What risk is this? A. Systematic risk B. Interest rate risk C. Inflation risk D. Credit risk

Inflation risk

Cash and cash equivalents have to do with what risk?

Inflation/purchasing power risk

Bonds have fixed...

Interest rates

Included in the definition of derivative would be all of the following except A. Leveraged ETFs B. Futures C. Options D. Rights

Leveraged ETFs

Yield curves are when short-term treasuries have...

Lower rates than long-term maturities

Under the Uniform Securities Act, a person who is in the business of providing advice on trading futures contracts in addition to advising clients on securities issued or guaranteed by the U.S. government is A. Required to be registered investment adviser representative in the state B. Required to be a registered investment adviser in the state C. Not required to be a registered investment adviser in the state D. Required to be a registered agent in the state

Not required to be a registered investment adviser in the state

An investor would write a call option to A. Obtain income B. Fix the purchase price to add stock to his portfolio C. Seek long-term capital gain D. Protect the premium

Obtain income

Registration of an investment adviser automatically confers registration on 1. Officers, partners, and directors of the firm who are functioning as IARs 2. Any employee who is functioning as an IAR 3. Clerical employees handling back-office operations 4. An employee who will be soliciting clients for the adviser

Officers, partners, and directors of the firm who are functioning as IARs

A risk-averse client, living in the United States and holding a high proportion of his assets in cash and cash equivalents in U.S. dollars, is exposed to which of the following risks? A. Purchasing power risk B. Market risk C. Reinvestment rate risk D. Exchange rate risk

Purchasing power risk

A client owns 300 shares of BACH common stock in a margin account. The stock was originally purchased at a price of $40 per share and the Reg. T call was met. If the BACH is now selling for $50 per share, disregarding interest charges, the client's equity is now $9,000. How do you calculate this?

Reg. T call = 50% 50% of $40 is $20 $20 x 300 = $6,000 $50 x 300 = $15,000 $15,000 - $6,000 = $9,000

An investment adviser registered in State A decides it wishes to maintain custody of customer assets. As long as the securities laws of State A don't prohibit custody, the investment adviser would have to promptly notify A. The SEC on Form ADV that it is going to maintain custody B. The Administrator electronically (email) that it is going to maintain custody C. The Administrator in a letter that it is going to maintain custody D. The Administrator by filing an amended Form ADV that it is going to maintain custody

The Administrator by filing an amended Form ADV that it is going to maintain custody

Under the Securities Exchange Act of 1934, which body regulates the extension of credit for nonexempt securities? A. The SEC B. The Comptroller of Currency C. The New York Stock Exchange D. The Federal Reserve Board

The Federal Reserve Board

Which of the following is responsible for administration of the Bank Secrecy Act? A. The Financial Crimes Enforcement Network B. Securities and Exchange Commission C. Security Services D. Department of Health and Human Services

The Financial Crimes Enforcement Network

An investment adviser may state which of the following in the advisory contract? A. The adviser may be compensated on the basis of a reasonable share of the capital gains B. The advisory contract may only be assigned to another party w/ the consent of the client C. The advisory contract may only be assigned to another party after adequate compensation D. The investment advisor may be compensated on the basis of capital gains, providing assets in the account are below $250k

The advisory contract may only be assigned to another party w/ the consent of the client

In order to compute the real rate of return for a security, it would be necessary to know all of the following except A. The annual dividend B. The CPI C. The beta of the security D. The purchase price

The beta of the security

When making recommendations to an advisory client, which of the following carry the most weight? 1. The client's risk tolerance 2. Past performance of the adviser representative's recommendations 3. The client's investment needs and objectives 4. The client's previous investment experience w/ other advisers

The client's risk tolerance and the client's needs and objectives

With regard to ERISA and a qualified retirement plan, which of the following would not constitute a conflict of interest btwn the plan and a fiduciary? A. A fiduciary sells a real estate investment to the plan at the current market rate B. The fiduciary receives fees for acting as a trustee to the plan C. A fiduciary offers reduced commissions to the plan for transactions that are executed through his employing financial institution D. A fiduciary participates in a transaction on the plan's behalf that involves a party w/ interests adverse to those of the plan, to ensure favorable terms for the plan

The fiduciary receives fees for acting as a trustee to the plan

Under NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, which of the following must be included in an investment advisory contract? 1. The formula used to determine the investment adviser's compensation 2. A statement of the discretionary authority, if any, given to the investment adviser 3. A statement that the investment adviser may assign the contract w/o the consent of the client

The formula used to determine the investment adviser's compensation and a statement of the discretionary authority, if any, given to the investment adviser

Which of the following statements regarding modern portfolio theory is not correct? A. The optimal portfolio for an investor depends upon the investor's ability to assume risk B. The optimal portfolio has the lowest risk for a given level of return C. The optimal portfolio will always lie above the efficient frontier D. The optimal portfolio offers the highest return for a given level of risk

The optimal portfolio will always lie above the efficient frontier

Which of the following is not included in fundamental analysis of a company? A. The study of a company's historical stock prices and trading volume B. The study of a firm's position within its industry C. The study of the direction of the economy D. The study of a firm's financial statements

The study of a company's historical stock prices and trading volume

One of your existing clients wishes to open a new account in the name of his spouse and enter orders on her behalf. A. This practice is ordinary and acceptable B. This action is prohibited unless the spouse signs a trading authorization C. This action is prohibited unless the customer signs a trading authorization on behalf of his spouse D. The agent could be liable if the stock declines in value

This action is prohibited unless the spouse signs a trading authorization

One of your firm's portfolio managers is discussing risk that can be reduced during the portfolio construction process. Which of the following options might she be referring to? A. Unsystematic risk B. Systematic risk C. Credit risk D. Market risk

Unsystematic risk

A 74-year-old widower has been your client since his early 50s. He is a well-informed investor and has always seemed capable of understanding most investment concepts you have presented. At least twice a year, the 2 of you meet to evaluate his current financial situation and objectives. In your last meeting, it seemed to you that he was distracted and somewhat forgetful. It would be appropriate for you to do all of the following except A. Take detailed notes on future conversations and meetings w/ him B. Inform your supervisor of your concerns about his memory loss C. Ask him to invite a friend or family member to accompany him to appointments w/ you D. Wait to see if there are further causes for concern about his capabilities

Wait to see if there are further causes for concern about his capabilities

Damon Raymond is an agent with ABC Investment Planning, a registered broker-dealer and investment adviser. Under what circumstances would Damon not have to obtain client consent when ABC Investment Planning is acting in a principal capacity? A. When the client has given ABC blanket permission to engage in this type of transaction B. Never C. When the trade that is made is unrelated to the advisory relationship D. Only if the client terminates the advisory relationship

When the trade that is made is unrelated to the advisory relationship

Inverse ETFs are suitable primarily for investors A. With a very short time horizon B. Wishing to leverage their income C. Who are bullish on the market's future D. Who follow a passive investment strategy

With a very short time horizon

What is the tax penalty for the withdrawal of money from an IRA before age 59 1/2? A. 6% B. 5% C. 10% D. 50%

10%

If there was a material change, an investment adviser's current clients must be delivered within...

120 days

Reg. T is how much of a stock?

50%

A stock has been in a downtrend for several days. When its price decreases to near $30, many investors enter orders to buy the stock and the price increases to $31. This is most likely an example of A. A support level B. A change in polarity C. A reversal D. A resistance level

A support level

If it's at a premium, the current yield has to be less than the...

Coupon

The National Securities Market Improvement Act of 1996 (NSMIA) affects federal and state laws in that A. Federal securities laws preempt state laws B. The Uniform Securities Act supersedes the Investment Advisers Act of 1940 C. Federal laws and state laws remain the same D. State law preempts federal law

Federal securities laws preempt state laws

A research analyst studying the performance of ABC Industries compares that w/ reports from other analysts reviewing other companies in other industries. This is known as A. Top-down analysis B. Fundamental analysis C. Sector analysis D. Bottom-up analysis

Fundamental analysis? Or bottom-up analysis

All of the following statements regarding convertible bonds are true except A. The issuer pays a lower interest rate B. Holders have a fixed interest rate C. Holders may share in the growth of the common stock D. Holders receive a higher interest rate

Holders receive a higher interest rate

Which of the following statements concerning market efficiency isn't correct? A. The efficient market hypothesis (EMH) is the proposition that the securities markets are efficient, w/ the prices of securities reflecting their current economic value B. Investors who accept the efficient market hypothesis (EMH) usually adopt an active investment strategy C. Any new information must be unexpected; therefore, any changes in the stock price resulting from this new information will be random D. The fundamental assumption of market efficiency is that current stock prices reflect all available information for a company and that prices rapidly adjust to reflect any new information

Investors who accept the efficient market hypothesis (EMH) usually adopt an active investment strategy

A client who has a margin account is out of town for a week. The securities in the client's account fall dramatically, which requires the client to make immediate deposits into the account. Which of the following can the agent do to assist the client? A. Deposit funds into the client's account on behalf of the client B. Arrange for the firm to give the client another loan C. Arrange for a different client to give his client a loan D. Make every reasonable attempt to contact the client

Make every reasonable attempt to contact the client

One year ago, ABC Widgets, Inc., funded an expansion to its manufacturing facilities by issuing a 20-year first mortgage bond. The bond is secured by the new building and land. The bond was issued with a 5.5% coupon and is currently rated Aa. The current market price of the bond is 105 resulting in a current yield of approximately 5.24%. How do you calculate this?

What it pays you divided by what it costs you $55/1,050

A married couple has lived in the same home for 40 years and now, w/ the children all gone, they've decided to sell and move to a retirement village. They purchased the home for $80k and have accepted a contract for $800k. The tax consequences of this sale is $220k capital gain How do you calculate this?

First $250k is included - married couple = $500k excluded plus the $80k

What is the term given to that item, typically found at the bottom of a corporation's balance sheet, that describes such things as significant accounting policies, commitments made by the company, and potential liabilities and potential losses? A. Resource material B. Footnotes C. Contingency statement D. Offline items

Footnotes

Gaston is a police officer and wishes to contribute to a retirement plan sponsored by the city. Gaston wants the flexibility of being able to have unfettered penalty-free access to his funds before reaching age 59 1/2. This can only be accomplished if Gaston contributes to A. 401(k) plan B. 403(b) plan C. SEP IRA D. 457 plan

457 plan

Which of the following statements are true about both an individual Roth IRA and a Roth 401(k) plan? 1. Contributions are made w/ after-tax dollars 2. One must have AGI below a certain level in order to maintain either Roth 3. If all conditions are met, withdrawals are tax free 4. There are no RMDs at age 72

Contributions are made w/ after-tax dollars and if all conditions are met, withdrawals are tax free

An investment adviser new to the business is engaged by an elderly client who, on the grounds of privacy, refuses to disclose his annual income or net worth. The client merely asks the adviser to establish and manage a $50,000 portfolio. If the client brings a cashier's check for $50,000 to the initial meeting, which choice below reflects the best action on the part of the adviser? A. Decline the client b/c he is difficult to work with B. Accept the client but acknowledge in writing the client's refusal to provide financial information C. Decline the client, recognizing that you cannot effectively determine suitability in the absence of financial information D. Accept the client but only allocate his funds to money market type securities

Decline the client, recognizing that you cannot effectively determine suitability in the absence of financial information

As used in the regulations, the term impersonal investment advice means A. Investment advisory services provided strictly by subscription B. Investment advisory services provided by a team of advisers C. Investment advisory services provided where the client doesn't know the identity of the investment adviser representative D. Investment advisory services provided by means of written material or oral statements that don't purport to meet the objectives or needs of specific individuals or accounts

Investment advisory services provided by means of written material or oral statements that don't purport to meet the objectives or needs of specific individuals or accounts

Which of the following are discretionary orders? 1. A customer sends a check for $25k to an agent and instructs the agent to purchase bank and insurance company stocks when the price appears favorable 2. A customer instructs an agent to buy 1,000 shares of ABC Corporation at a time and price determined by the agent 3. A customer instructs an agent to purchase as many shares of XYZ as the agent considers appropriate 4. A customer instructs an agent to sell 300 shares of LMN, Inc., when the agent deems the time and price appropriate

A customer sends a check for $25k to an agent and instructs the agent to purchase bank and insurance company stocks when the price appears favorable & a customer instructs an agent to purchase as many shares of XYZ as the agent considers appropriate

The Administrator may deny registration of an agent b/c the agent A. Was convicted of a drug-related misdemeanor B. Is under investigation by the Administrator of another state C. Was convicted of a felony within the past 10 yrs D. Is being investigated by the SEC for possible insider trading violations

Was convicted of a felony within the past 10 yrs

Perpetual Prosperity Advisers (PPI), a state-registered investment adviser, files an application to withdraw its registration as a registered investment adviser. Records pertaining to client accounts must be A. Sent to the Administrator of the state in which PPI maintained its principal office B. Destroyed once the withdrawal has become effective C. Retained for the time period specified in the NASAA Model Rule on record keeping D. Sent to the Administrator of the state in which the client was a resident

Retained for the time period specified in the NASAA Model Rule on record keeping

Under the Uniform Securities Act, which of the following is an agent? A. An individual who is in the business of providing investment advice on behalf of his employer B. A clerical person who files trade confirmations for the firm C. A broker-dealer that charges a commission as a regular part of its business D. An individual who effects securities transactions for commissions

An individual who effects securities transactions for commissions

All of the following statements regarding futures contracts are correct except A. A short position will increase in value if the underlying commodity or asset declines in value B. Purchasing a contract for future delivery is considered taking a long position C. Completing a futures contract requires the delivery of the commodity D. Futures contracts can be written on financial assets or commodities

Completing a futures contract requires the delivery of the commodity