S66 11/01
A living will is used to A) express the author's end-of-life wishes. B) ensure that the author's assets are properly distributed after death. C) avoid the cost and time of probate. D) eliminate, or at least reduce, estate taxes.
A
High-yield bonds are frequently called junk bonds. Which of the following expresses the highest rating that would apply to a junk bond? A) BB B) CCC C) BBB D) CC
A
The final responsibility for ensuring that investment adviser representatives are adequately supervised is that of A) the chief compliance officer. B) the managing principal. C) the Administrator. D) each investment adviser representative's immediate supervisor.
A
One of the concerns about social media is the opportunity for affinity fraud. This occurs when A) individuals who have been convicted of fraud continue to target prospects. B) fraudulent offers are aimed at groups of people who share a similar interest. C) fraudulent offers are directed to investors in the same or neighboring zip codes. D) people who have been defrauded are repeatedly subjected to offers.
B
Under NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, an investment adviser may not borrow money from which of the following clients? A) A finance company not affiliated with the adviser B) A federal covered investment adviser not affiliated with this adviser C) A broker-dealer not affiliated with the adviser D) A bank not affiliated with the adviser
B
All of the following activities could result in the revocation of an agent's registration except A) excessively trading for the purpose of generating commissions B) making recommendations based on material nonpublic inside information C) failing to state all known facts about an investment when presenting it to a client D) borrowing from retail customers
C
Hal and Amy are covered by a pension plan at Benson Industries, Inc., where they are both employed as executives. Their incomes total $300,000 per year, and they file a joint tax return. Which of the following best describes what they can do in a regular IRA program for the year 2023? A) They may make an $13,000 deductible contribution. B) They cannot have an IRA because they are covered by a pension plan. C) They may each make a $6,500 deductible contribution. D) They may contribute $6,500 each
D
Professor William Sharpe stipulated that certain assumptions must be present for the capital asset pricing model (CAPM) to be useful. Which of the following is not one of these assumptions? A) Investors can always borrow and lend money at the risk-free rate of return. B) All investors have the same expectations for a given investment. C) At all times, capital markets are in equilibrium. D) Investment expenses, such as taxes and transaction costs, are relevant in investment decision making.
D
Under the Investment Advisers Act of 1940, which of the following is excluded from the definition of a person associated with an investment adviser? A) An employee who manages client accounts for an investment advisory firm B) A minority partner of an investment advisory firm C) A majority stockholder of an investment advisory firm D) A clerk in an investment advisory firm
D
Ethical or Unethical for an IAR? Performing the initial trades in a new discretionary account with oral authorization
Ethical
True or False regarding a unit investment trust? Overall responsibility for the fund rests with the board of directors.
False
True or False regarding provisions of the Investment Advisers Act of 1940? An investment adviser must obtain client permission to accept a buyout offer for all of the adviser's stock.
False
True or False under the Investment Advisers Act of 1940? Material information requires a prompt amendment, but nonmaterial changes do not require amendment.
False
True or False? An investment adviser representative borrows $10,000 from his mother-in-law, who is also a client. He signs an agreement to pay back the loan in five years at below-market interest. This arrangement is acceptable because the client is considered an immediate family member.
False
True or False? An agent is employed by a broker-dealer that sets a high minimum net worth requirement for clients to open margin accounts. In an effort to ensure that a client qualifies, the agent adds $100,000 to the value of the client's assets. Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, this would be prohibited only if this is done without the client's written consent.
False, its prohibited because the agent is entering false information
Broker-dealers operating on the premises of a financial institution must disclose, orally and in writing, that the securities products purchased or sold in a transaction with the broker-dealer I. are not insured by the Federal Deposit Insurance Corporation (FDIC). II. are not deposits or other obligations of the financial institution and are not guaranteed by the financial institution. III. are insured by the Securities Investor Protection Corporation (SIPC). IV. are subject to investment ri
I, II, & IV
Under the Uniform Securities Act, does the Administrator have the power to deny or revoke exemptions of stock issued by a bank organized under the laws of another state
No they don't have that power
Prohibited or Unprohibited under the Uniform Securities Act? An investment adviser selling securities as a principal to an advisory client without receiving consent of the client prior to the completion of the trade
Prohibited
True or False regarding a unit investment trust? It invests according to stated objectives.
True
True or False regarding provisions of the Investment Advisers Act of 1940? Five Partners Advisers, Ltd., must inform all clients that one of the five partners has retired and been replaced by a new partner.
True
True or False under the Investment Advisers Act of 1940? If any material information filed in the registration becomes inaccurate, an amendment must be filed promptly.
True
True or False under the Investment Advisers Act of 1940? If any nonmaterial information filed on Form ADV changes, an amendment must be filed within 90 days of the end of the fiscal year.
True
True or False? An agent is employed by a broker-dealer that sets a high minimum net worth requirement for clients to open margin accounts. In an effort to ensure that a client qualifies, the agent adds $100,000 to the value of the client's assets. Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, this would be prohibited because the agent is entering fictitious information on the client account form.
True
True or False? An investment adviser representative borrows $10,000 from his mother-in-law, who is also a client. He signs an agreement to pay back the loan in five years at below-market interest. This arrangement is unacceptable because it is considered an unethical business practice to borrow from a client not in the lending business.
True
Ethical or Unethical for agents of a B/D? Effecting securities transactions not recorded on the books of the employing broker-dealer without prior written authorization
Unethical
Prohibited or Unprohibited under the Uniform Securities Act? Agency cross transactions
Unprohibited
