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 - ANSWER B. A futures contract in precious
metals
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 - ANSWER B. Advisers
may not charge fees that are unreasonably high in relation to fees charged by other advisers
for similar services
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. - ANSWER Number of shares
1
,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 - ANSWER C. The number of shares
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 -
ANSWER C. Omitting the name of the broker-dealer in any 30-second ads that run during
the show
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 _________ ___________. - ANSWER new hire
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 - ANSWER C. II and IV
2
, 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 - ANSWER B. The sharing is strictly prohibited
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 - ANSWER D. The adviser will
provide advice only to mutual funds
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. - ANSWER FALSE
Must be 401(k) plans with assets of at least $1,000,000
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 - ANSWER B. The withdrawal will become effective
3
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 - ANSWER B. A futures contract in precious
metals
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 - ANSWER B. Advisers
may not charge fees that are unreasonably high in relation to fees charged by other advisers
for similar services
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. - ANSWER Number of shares
1
,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 - ANSWER C. The number of shares
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 -
ANSWER C. Omitting the name of the broker-dealer in any 30-second ads that run during
the show
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 _________ ___________. - ANSWER new hire
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 - ANSWER C. II and IV
2
, 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 - ANSWER B. The sharing is strictly prohibited
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 - ANSWER D. The adviser will
provide advice only to mutual funds
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. - ANSWER FALSE
Must be 401(k) plans with assets of at least $1,000,000
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 - ANSWER B. The withdrawal will become effective
3
