Series 65- Practice Exam 1 {With
Explanations}
In order of liquidation, which of the following has a residual claim to the assets of the corporation? -
correct answer ✔✔Common shareholder
Common shareholders are said to have a residual claim to assets. This means that common shareholders
are the last to be paid per the order of bankruptcy liquidation. As owners, common shareholders take
the most risk and also receive the greatest benefit if the company prospers
Who is responsible for filing form ADV-E? - correct answer ✔✔The auditor of an IA with custody of
customer assets
ADV-E is filed by the auditor of an IA with custody of clients assets
There are many features that negotiable certificates of deposit have with respect to security,
marketability, and value. Which of the following are considered features of certificates of deposit? I.
Variable maturity dates to choose from; II. Minimum denomination of $100,000; III. Backing by the
equity of the issuing bank; IV. Selling prior to maturity - correct answer ✔✔I, II, III and IV
Negotiable certificates of deposit (CDs) have the following characteristics: maturities may range from a
few weeks to several years; owners can sell CDs in the money market prior to their maturity; they are
secured by the general credit of the issuing bank; minimum denomination is $100,000, but they usually
trade in amounts of $1 million or more
Mrs. Johnson bought 200 shares of Intec at 18 in March. When she passed away in June, the market
price of Intec was 21. What is the taxation to her daughter, who inherited the shares? - correct answer
✔✔Her cost basis is 21 and the holding period is long-term
The cost basis on inherited securities is the market value at the time of death and the holding period is
always long-term, no matter how long the securities were actually owned
Explanations}
In order of liquidation, which of the following has a residual claim to the assets of the corporation? -
correct answer ✔✔Common shareholder
Common shareholders are said to have a residual claim to assets. This means that common shareholders
are the last to be paid per the order of bankruptcy liquidation. As owners, common shareholders take
the most risk and also receive the greatest benefit if the company prospers
Who is responsible for filing form ADV-E? - correct answer ✔✔The auditor of an IA with custody of
customer assets
ADV-E is filed by the auditor of an IA with custody of clients assets
There are many features that negotiable certificates of deposit have with respect to security,
marketability, and value. Which of the following are considered features of certificates of deposit? I.
Variable maturity dates to choose from; II. Minimum denomination of $100,000; III. Backing by the
equity of the issuing bank; IV. Selling prior to maturity - correct answer ✔✔I, II, III and IV
Negotiable certificates of deposit (CDs) have the following characteristics: maturities may range from a
few weeks to several years; owners can sell CDs in the money market prior to their maturity; they are
secured by the general credit of the issuing bank; minimum denomination is $100,000, but they usually
trade in amounts of $1 million or more
Mrs. Johnson bought 200 shares of Intec at 18 in March. When she passed away in June, the market
price of Intec was 21. What is the taxation to her daughter, who inherited the shares? - correct answer
✔✔Her cost basis is 21 and the holding period is long-term
The cost basis on inherited securities is the market value at the time of death and the holding period is
always long-term, no matter how long the securities were actually owned
