Series 65 – Uniform Investment Adviser Law Exam
ANSWERS WITH EXPLANATIONS
1. Which of the following is a notice made in the financial press that formally announces a
particular transaction, such as an IPO for stock placement?
A. Omitting prospectus
B. Preliminary prospectus
C. Red herring
D. Tombstone ad
Answer: D
The tombstone ad is a notice made in the financial press that formally announces a particular
transaction, such as an IPO or stock placement.
2. One of the following is/are correct regarding stock splits in reverse stock splits?
(1) a three for one stock split will decrease a stock's market price per share
(2) a reverse stock split is intended to increase a stock's market price per share
A. (1) only
B. (2) only
C. Both (1) and (2) are correct
D. Neither (1) or (2) are correct
Answer: C
Both (1) and (2) are correct.
,1) a three for one stock split will decrease a stock's market price per share
2) a reverse stock split is intended to increase a stock's market price per share
3. Which of the following is the minimum denomination that of treasury notes that can be
purchased by an investor?
A. $50.00
B. $100
C. $1000
D. $10,000
Answer: B
Treasury notes are sold in minimum denominations of $100
4. The statement of cash flows is separated into all but which of the following categories?
A. Cash flow from financing activities
B. Cash flow from income activities
C. Cash flow from investing activities
D. Cash flow from operating activities
Answer: B
The statement of cash flows a separate into the following three categories: cash flow from
finance activities, cash flow from investing activities, and cash flow from operating activities.
5. Which are the following are permitted investment in an IRA?
(1) real estate
(2) money market funds
,(3) common stock
(4) bond funds
A. Three and four only
B. 1, 2 and three only
C. 2, 3 and four only
D. All of the above are correct
Answer: D
IRAs may invest in all four types of investments, including real estate investment trusts (REIT)
6. Which of the following statements describes a typical whole Life Insurance policy?
(1) The premiums must be paid for the insured's entire lifetime or for a period of at least 10
years.
(2) The cash value cannot be used as collateral for a loan.
(3) The difference between a policy's face amount in the reserve must be greater than the
cash surrender value at all times.
(4) The cash value must equal the face amount of coverage by the end of the mortality table.
A. Four only
B. Two and three only
C. One, two and three only
D. All of the above are correct
Answer: A
, The cash value of a whole Life Insurance policy must equal the face amount of coverage by
the end of the mortality table.
7. Which of the following is cracked regarding a mutual funds turnover rate?
A. The higher the turnover rate, the less effcient the mutual fund will be. Therefore, funds
with high turnover rates are best positioned in taxable accounts.
B. The higher the turnover rate, the more effcient the mutual fund will be. Therefore, funds
with low turnover rates are best positioned in tax deferred accounts.
C. The higher the turnover rate, the last effecient the mutual fund will be. Therefore, funds
with high to ever rates are best positioned in tax deferred accounts.
D. None of the above are correct.
Answer: C
The higher the Turner rate, the less tax effecient the mutual fund will be. There for funds with
a high turnover rate her best positioned in tax deferred account.
8. If an RIA has between ____________ and ___________of assets under management, the
RIA may register with either date applicable state(s) where the RIA maintains clients or the
SEC, at the RIA's discretion.
A. $10,000,000, $100,000,000
B. $25,000,000, $100,000,000
C. $50,000,000, $150,000,000
D. $100,000,000, $200,000,000
Answer: B
ANSWERS WITH EXPLANATIONS
1. Which of the following is a notice made in the financial press that formally announces a
particular transaction, such as an IPO for stock placement?
A. Omitting prospectus
B. Preliminary prospectus
C. Red herring
D. Tombstone ad
Answer: D
The tombstone ad is a notice made in the financial press that formally announces a particular
transaction, such as an IPO or stock placement.
2. One of the following is/are correct regarding stock splits in reverse stock splits?
(1) a three for one stock split will decrease a stock's market price per share
(2) a reverse stock split is intended to increase a stock's market price per share
A. (1) only
B. (2) only
C. Both (1) and (2) are correct
D. Neither (1) or (2) are correct
Answer: C
Both (1) and (2) are correct.
,1) a three for one stock split will decrease a stock's market price per share
2) a reverse stock split is intended to increase a stock's market price per share
3. Which of the following is the minimum denomination that of treasury notes that can be
purchased by an investor?
A. $50.00
B. $100
C. $1000
D. $10,000
Answer: B
Treasury notes are sold in minimum denominations of $100
4. The statement of cash flows is separated into all but which of the following categories?
A. Cash flow from financing activities
B. Cash flow from income activities
C. Cash flow from investing activities
D. Cash flow from operating activities
Answer: B
The statement of cash flows a separate into the following three categories: cash flow from
finance activities, cash flow from investing activities, and cash flow from operating activities.
5. Which are the following are permitted investment in an IRA?
(1) real estate
(2) money market funds
,(3) common stock
(4) bond funds
A. Three and four only
B. 1, 2 and three only
C. 2, 3 and four only
D. All of the above are correct
Answer: D
IRAs may invest in all four types of investments, including real estate investment trusts (REIT)
6. Which of the following statements describes a typical whole Life Insurance policy?
(1) The premiums must be paid for the insured's entire lifetime or for a period of at least 10
years.
(2) The cash value cannot be used as collateral for a loan.
(3) The difference between a policy's face amount in the reserve must be greater than the
cash surrender value at all times.
(4) The cash value must equal the face amount of coverage by the end of the mortality table.
A. Four only
B. Two and three only
C. One, two and three only
D. All of the above are correct
Answer: A
, The cash value of a whole Life Insurance policy must equal the face amount of coverage by
the end of the mortality table.
7. Which of the following is cracked regarding a mutual funds turnover rate?
A. The higher the turnover rate, the less effcient the mutual fund will be. Therefore, funds
with high turnover rates are best positioned in taxable accounts.
B. The higher the turnover rate, the more effcient the mutual fund will be. Therefore, funds
with low turnover rates are best positioned in tax deferred accounts.
C. The higher the turnover rate, the last effecient the mutual fund will be. Therefore, funds
with high to ever rates are best positioned in tax deferred accounts.
D. None of the above are correct.
Answer: C
The higher the Turner rate, the less tax effecient the mutual fund will be. There for funds with
a high turnover rate her best positioned in tax deferred account.
8. If an RIA has between ____________ and ___________of assets under management, the
RIA may register with either date applicable state(s) where the RIA maintains clients or the
SEC, at the RIA's discretion.
A. $10,000,000, $100,000,000
B. $25,000,000, $100,000,000
C. $50,000,000, $150,000,000
D. $100,000,000, $200,000,000
Answer: B
