Ways in which offerings under Rule 506(c) of Regulation D of the Securities Act of 1933 differ from those under Rule 506(b) include each of these EXCEPT
A)
the issuer must take "reasonable steps" to verify that all purchasers are accredited investors in a
B. Under the NSMIA, any security issued under the federal transaction exemption offered under Rule 506, either (b) or (c), is considered a federal covered security.
U4LO3
All of the following are exempt securities under the Uniform Securities Act EXCEPT
A)
securities issued by a federal savings and loan association
B)
securities issued by a bank holding company
C)
securities issued by the Canadian government
D)
securities
B. Securities issued by a bank are exempt. However, this answer refers to a bank holding company that is considered to be an ordinary company subject to state registration if not otherwise exempt.
U4LO3
When a security is being registered under coordination, all of the following are required EXCEPT
A)
filing with the Administrator of a statement of the maximum and minimum proposed offering price and maximum underwriting discounts or commissions concurren
A. The statement of the maximum and minimum proposed offering prices and the maximum underwriting compensation must be filed at least 2 full business days before the effective date, not with the initial filing.
U4LO3
The Investment Advisers Act of 1940 requires advisers to prepare and adhere to a code of ethics. Which of the following is charged with the responsibility of enforcing that code?
A)
Chief compliance officer of the IA
B)
The SEC
C)
Each individual IAR
D)
A
A. Each federal covered investment adviser must have an individual designated as the chief compliance officer (CCO). It is that person's responsibility to make sure that the code of ethics is being followed. Although each individual IAR must follow that c
According to the Investment Advisers Act of 1940, which of the following statements regarding Part 2 of Form ADV are TRUE?
1. It must be filed with the state Administrator.
2. A balance sheet must be submitted if the adviser collects prepaid fees of more
2&4. An investment adviser required to register with the SEC under the Investment Advisers Act of 1940 must submit its Form ADVs to the SEC. In some cases, the Form ADV will also be filed with the state Administrator, but that is state law, not a federal
Under which of the following circumstances would a premature distribution from a traditional IRA be exempt from the premature distribution penalty?
A)
When the account is fully funded with nondeductible contributions
B)
A distribution taken at age 55 if t
D. A distribution from an IRA taken in equal annual amounts over the owner's life is not subject to the 10% premature distribution penalty even if started before age 59�. This is one of the exceptions that apply to IRAs. The exception for qualified domest
An investor is considering a 10-year stripped U.S. Treasury and a 10-year U.S. Treasury note, both with a yield to maturity of 4.8%. Compared to the note, the strip has
A)
less reinvestment risk and more interest rate risk.
B)
more interest rate risk and
A. The strip is a zero-coupon security so it has no cash flows to reinvest and therefore no reinvestment risk. However, it has more interest rate risk (longer duration) than the Treasury note. Remember, the duration of a zero-coupon bond is its maturity d
To register a sole proprietorship as an investment adviser in a state, the application for initial registration (Form ADV) must be filed with the appropriate party. This application must include all of the following EXCEPT
A)
a consent to service of proce
C. Articles of incorporation only apply to corporations. Sole proprietorships are not incorporated. To register as an investment adviser in a state, Form ADV is filed with the Administrator or with a central registration depository designated by the Admin
Under the provisions of the USA, all of the following transactions are exempt EXCEPT
A)
transactions by executors
B)
liquidation of a security pledged as collateral for a loan
C)
a transaction pursuant to an offer directed by the issuer to no more than 10
C. A transaction pursuant to an offer by an issuer to no more than 10 noninstitutional persons in the state would qualify as a private placement and would be exempt. However, unlike a preorganization certificate, the subscribers do pay for their purchases
When an investment company employs an outside investment advisory firm to manage its portfolio, the act requires a written contract setting forth the adviser's compensation. The contract is for 2 years initially and must be renewed annually thereafter. Th
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The board of directors sets policy and manages the administrative affairs of the investment company, but it does not manage the portfolio. The board contracts with an outside investment manager to invest the funds.? It is unlawful for any person to serve
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A securities trade is made. Under normal circumstances, all of the following would be noted on the order ticket EXCEPT
A)
the registered agent who accepted the order
B)
the time stamp of the time of order submission
C)
the name of the individual who trans
C. Transmitting an order is a clerical function, and we don't put that on the order ticket. A typical ticket will include the account for which the trade is being made, the registered individual placing the order for the client, time stamps for entering a
A person who has no place of business in this state would not be considered a broker-dealer if he effects transactions in this state exclusively with all of the following except
A)
insurance companies.
B)
the issuers of the securities involved in the tran
The Uniform Securities Act excludes from the definition of broker-dealer, a person who has no place of business in this state if he effects transactions in this state exclusively with or through
1. the issuers of the securities involved in the transaction
A registered person may apply to withdraw the registration. The withdrawal is effective in 30 days, unless the person is under investigation in connection with pending disciplinary action or an investigation is instigated during the 30 days after filing t
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Which of the following statements describes an advantage of a Roth IRA over a traditional IRA?
A)
There are no annual contribution limits once an individual attains age 59�.
B)
The required minimum distribution date rules do not apply if the distribution
C. A Roth IRA distribution is tax free if the distribution is made on or after the owner attains age 59� (or other specified events), and a 5-year holding period requirement is met. The contribution limits are aggregated with that of a traditional IRA reg
Which of the following statements is (are) TRUE regarding the jurisdiction of the SEC under the Securities Exchange Act of 1934?
1. The SEC has jurisdiction over exchanges and SROs.
2. The SEC has jurisdiction over broker-dealers, investment advisers, and
1&2.The SEC was created by the Securities Exchange Act of 1934 and has the responsibility of administering all federal securities laws. The SEC has jurisdiction over exchanges, SROs, and all persons required to be registered under federal law. The SEC doe
Mary is a bowling buddy of Susan, a covered investment adviser. Mary refers Amanda, a wealthy widow, to Susan, and after a very pleasant meeting, Amanda places $15 million under management with Susan. If Susan were to give Mary a cash payment for the refe
D. Although there are circumstances under which cash payments may be made to solicitors, none of the required conditions found in the Investment Advisers Act of 1940 appear to be met here. A formal written agreement must be in effect, not just a one-time
When an open-end management investment company computes its net asset value per share, each of the following occurrences would have an impact EXCEPT
A)
a drop in the value of equity securities held in the fund's portfolio
B)
a capital gains distribution
C
D. Because shares are purchased and redeemed at NAV, net redemptions (this case) or net purchases have no effect on the net asset value of the fund's shares. However, receipt of cash in the form of interest payments causes assets to increase, while fallin
These are the 2 requirements for use of the term investment counsel:
1. its principal business consists of rendering investment advice
2. a substantial portion of its business involves investment supervisory services
Although it can be a factor, exercisin
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Which of the following could reduce the amount that an individual may contribute to a Traditional IRA?
1. Roth IRA contributions made for the year
2. High income level
3. Participation in an employer-sponsored plan
4. Marital status
The maximum annual contribution applies as a total among your Roth and your traditional IRA. So, if the maximum is $6,000 and you put $3,000 into your Roth, you could only put $3,000 into your traditional IRA. You could do a total of $7,000 if you were 50
The SEC requires prompt amendment of any material information changes on Form ADV (e.g., names, location, control, custody, organization) and also requires nonmaterial amendments within 90 days of the end of the adviser's fiscal year.
U1LO5
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When would an individual employed by an issuer to sell its stock to the public have to register as an agent?
A)
When the employer is a savings institution
B)
When the transaction is exempt
C)
When the employer is an insurance company
D)
When the employer
C. The question is not looking for the exemption - it wants to know when the individual must register. There are two instances where an individual employed by the issuer to sell its securities is not considered an agent. The first is when the issuer is on
Cancellation and withdrawal are nonpunitive methods of termination of a person's registration. Suspension, revocation, and denial are considered forms of punishment.
U5LO2
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Sharon Smith is an investment adviser representative with Highwater Advisers, a federal covered investment adviser with 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 b
B. The key is that Sharon is an IAR for a covered IA. When that is the case, the IAR is only required to register in states where she (the IAR) maintains a place of business. Sharon does not have a place of business in State X so no registration is requir
One of your new clients has only been working for 3 years but is already interested in retirement planning. In order to be fully eligible for Social Security, the client must
A)
be at least age 62.
B)
have a minimum of 40 covered quarters of employment.
C
B. Current Social Security requirements are a minimum of 40 covered quarters of employment (10 years). A covered quarter is a calendar quarter during which the worker earned a minimum amount ($1,300 in 2017) which is indexed and, therefore, would never be
An investment adviser may enter into, extend, or renew an investment advisory contract that provides for compensation to the investment adviser on the basis of a share of capital gains upon or capital appreciation of the funds, or any portion of the funds
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