MGRADES
Series 63 Practice ACTUAL Exam Questions
and CORRECT Answers
A client of yours submits an order to purchase 500 shares of ABC common stock. Two days
later, the client receives the trade confirmation and notices that the trade was for 100 shares. The
stock is now $2 per share higher than the confirmed price. When checking the phone recordings
for the day, it is confirmed that the order should have been placed for 500 shares. When
presented with this information, what do you tell the client can be done about this error?
A)
You would credit the client's account with $800, representing the missing 400 shares at the $2-
per-share higher price.
B)
You would submit an error report, and the firm would purchase an additional 400 shares for the
client's account, charging the account the original purchase price.
C)
You would place an additional 400 shares into the client's account at the original purchase price.
D)
You would apologize to the client, but make it clear that mistakes happen - CORRECT
ANSWER - B)
You would submit an error report, and the firm would purchase an additional 400 shares for the
client's account, charging the account the original purchase price.
Under the NASAA Model Rule dealing with sales of securities at financial institutions, an
advertisement prepared for use in a radio broadcast would have to include certain mandatory
disclosures unless the broadcast was
A)
45 seconds or less.
B)
60 seconds or less.
C)
90 seconds or less.
D)
,MGRADES
30 seconds or less. - CORRECT ANSWER - D)
30 seconds or less.
Tamar is an investment adviser representative for Retirement Solutions of American (RSA), a
wholly owned subsidiary of Southeast Retirement Solutions (SRS), a broker-dealer registered in
a number of southeastern states. Tamar is also a registered agent with SRS. If one of Tamar's
advisory clients sends a check made payable to SRS for a stock purchase, under NASAA's
Model Rule on Custody by Investment Advisers,
A)
Tamar would have to post a surety bond in the amount of $35,000.
B)
RSA would be in violation of the NASAA requirement to use a qualified custodian.
C)
RSA is considered to be maintaining custody of client funds and securities.
D)
Tamar must return the check and request a replacement check made payable to RSA. -
CORRECT ANSWER - C)
RSA is considered to be maintaining custody of client funds and securities.
Under the Uniform Securities Act, individuals do not meet the definition of an agent if they are
employed by a broker-dealer and only
A)
process securities transactions and the handling of money.
B)
involve themselves in exempt transactions.
C)
trade exempt securities.
D)
deal with institutional clients. - CORRECT ANSWER - A)
process securities transactions and the handling of money.
,MGRADES
The Uniform Securities Act has provisions for agent registration and termination. Which of the
following statements apply to withdrawals of an agent's registration?
A)
An agent may withdraw the registration simply by failing to pay the license renewal fee.
B)
The Administrator may institute a disciplinary action within two years after the effective
termination date.
C)
The effective date of a withdrawal, in the absence of any action by the Administrator, is 60 days
after filing.
D)
If the Administrator commences an action against the agent prior to the effective date of the
withdrawal, the withdrawal will be delayed until completion of the action. - CORRECT
ANSWER - D)
If the Administrator commences an action against the agent prior to the effective date of the
withdrawal, the withdrawal will be delayed until completion of the action.
Gabriela Goodman has been an agent for Grand Central Securities, Inc., a registered broker-
dealer. She recently became registered as an investment adviser representative of GCSI Advisers,
a wholly owned subsidiary of Grand Central Securities, Inc. Goodman has been successful in
convincing a number of her brokerage clients to enter into advisory contracts with GCSI
Advisers. Goodman receives compensation based on those advisory fees as well as commissions
on any transactions directed through Grand Central Securities, Inc. When advisory clients decide
to accept a recommendation in their account, Goodman's fiduciary responsibility would require
her to
A)
disclose to these clients that they should execute those trades through Grand Central Securities,
Inc.
B)
refuse to accept commission on trades executed through Grand Central Securities, Inc.
C)
, MGRADES
disclose to these clients that they may execute those trades through a brok - CORRECT
ANSWER - C)
disclose to these clients that they may execute those trades through a broker-dealer of their
choice.
The Uniform Securities Act provides an exclusion from the definition of an agent under certain
specified conditions for those persons representing an issuer in the sale of its securities. An
individual representing the issuer in the sale of that issuer's securities to the public would not
qualify for that exclusion and have to register if
A)
the issuer is a savings institution organized and supervised under the laws of any state.
B)
the issuer is a Canadian provincial government.
C)
the transaction is exempt.
D)
the issuer is a federal credit union. - CORRECT ANSWER - D)
the issuer is a federal credit union.
Strategic Planning, Inc. (SPI), a broker-dealer registered with the state, has recently paid its
renewal fees for registration. Three months later, Planned Stewardship, LLC, a new firm
established to provide brokerage services, acquires SPI. Under the Uniform Securities Act,
A)
Planned Stewardship's acquisition will not go into effect until the renewal date.
B)
Planned Stewardship must pay the difference between the fees already paid by SPI and the new
fees required.
C)
Planned Stewardship is required to pay the full cost of the registration fees.
D)
Planned Stewardship has no registration fees to pay. - CORRECT ANSWER - D)
Series 63 Practice ACTUAL Exam Questions
and CORRECT Answers
A client of yours submits an order to purchase 500 shares of ABC common stock. Two days
later, the client receives the trade confirmation and notices that the trade was for 100 shares. The
stock is now $2 per share higher than the confirmed price. When checking the phone recordings
for the day, it is confirmed that the order should have been placed for 500 shares. When
presented with this information, what do you tell the client can be done about this error?
A)
You would credit the client's account with $800, representing the missing 400 shares at the $2-
per-share higher price.
B)
You would submit an error report, and the firm would purchase an additional 400 shares for the
client's account, charging the account the original purchase price.
C)
You would place an additional 400 shares into the client's account at the original purchase price.
D)
You would apologize to the client, but make it clear that mistakes happen - CORRECT
ANSWER - B)
You would submit an error report, and the firm would purchase an additional 400 shares for the
client's account, charging the account the original purchase price.
Under the NASAA Model Rule dealing with sales of securities at financial institutions, an
advertisement prepared for use in a radio broadcast would have to include certain mandatory
disclosures unless the broadcast was
A)
45 seconds or less.
B)
60 seconds or less.
C)
90 seconds or less.
D)
,MGRADES
30 seconds or less. - CORRECT ANSWER - D)
30 seconds or less.
Tamar is an investment adviser representative for Retirement Solutions of American (RSA), a
wholly owned subsidiary of Southeast Retirement Solutions (SRS), a broker-dealer registered in
a number of southeastern states. Tamar is also a registered agent with SRS. If one of Tamar's
advisory clients sends a check made payable to SRS for a stock purchase, under NASAA's
Model Rule on Custody by Investment Advisers,
A)
Tamar would have to post a surety bond in the amount of $35,000.
B)
RSA would be in violation of the NASAA requirement to use a qualified custodian.
C)
RSA is considered to be maintaining custody of client funds and securities.
D)
Tamar must return the check and request a replacement check made payable to RSA. -
CORRECT ANSWER - C)
RSA is considered to be maintaining custody of client funds and securities.
Under the Uniform Securities Act, individuals do not meet the definition of an agent if they are
employed by a broker-dealer and only
A)
process securities transactions and the handling of money.
B)
involve themselves in exempt transactions.
C)
trade exempt securities.
D)
deal with institutional clients. - CORRECT ANSWER - A)
process securities transactions and the handling of money.
,MGRADES
The Uniform Securities Act has provisions for agent registration and termination. Which of the
following statements apply to withdrawals of an agent's registration?
A)
An agent may withdraw the registration simply by failing to pay the license renewal fee.
B)
The Administrator may institute a disciplinary action within two years after the effective
termination date.
C)
The effective date of a withdrawal, in the absence of any action by the Administrator, is 60 days
after filing.
D)
If the Administrator commences an action against the agent prior to the effective date of the
withdrawal, the withdrawal will be delayed until completion of the action. - CORRECT
ANSWER - D)
If the Administrator commences an action against the agent prior to the effective date of the
withdrawal, the withdrawal will be delayed until completion of the action.
Gabriela Goodman has been an agent for Grand Central Securities, Inc., a registered broker-
dealer. She recently became registered as an investment adviser representative of GCSI Advisers,
a wholly owned subsidiary of Grand Central Securities, Inc. Goodman has been successful in
convincing a number of her brokerage clients to enter into advisory contracts with GCSI
Advisers. Goodman receives compensation based on those advisory fees as well as commissions
on any transactions directed through Grand Central Securities, Inc. When advisory clients decide
to accept a recommendation in their account, Goodman's fiduciary responsibility would require
her to
A)
disclose to these clients that they should execute those trades through Grand Central Securities,
Inc.
B)
refuse to accept commission on trades executed through Grand Central Securities, Inc.
C)
, MGRADES
disclose to these clients that they may execute those trades through a brok - CORRECT
ANSWER - C)
disclose to these clients that they may execute those trades through a broker-dealer of their
choice.
The Uniform Securities Act provides an exclusion from the definition of an agent under certain
specified conditions for those persons representing an issuer in the sale of its securities. An
individual representing the issuer in the sale of that issuer's securities to the public would not
qualify for that exclusion and have to register if
A)
the issuer is a savings institution organized and supervised under the laws of any state.
B)
the issuer is a Canadian provincial government.
C)
the transaction is exempt.
D)
the issuer is a federal credit union. - CORRECT ANSWER - D)
the issuer is a federal credit union.
Strategic Planning, Inc. (SPI), a broker-dealer registered with the state, has recently paid its
renewal fees for registration. Three months later, Planned Stewardship, LLC, a new firm
established to provide brokerage services, acquires SPI. Under the Uniform Securities Act,
A)
Planned Stewardship's acquisition will not go into effect until the renewal date.
B)
Planned Stewardship must pay the difference between the fees already paid by SPI and the new
fees required.
C)
Planned Stewardship is required to pay the full cost of the registration fees.
D)
Planned Stewardship has no registration fees to pay. - CORRECT ANSWER - D)
