MGRADES
Series 63 Practice ACTUAL UPDATED
Exam Questions and CORRECT Answers
A married couple is only five years away from retirement. They own a home but have not saved
anything for their retirement. They consult an agent of a broker-dealer about what they can do to
catch up. What should the agent advise them to do? - CORRECT ANSWER - Open IRA
accounts and begin making the maximum possible contributions
IA Incorporated is an investment adviser. BD Securities is a brokerage firm with offices down
the hall. IA Incorporated and BD Securities have an agreement under which IA directs brokerage
transactions to BD and receives a 15% rebate on the commissions that BD charges. This
arrangement is: - CORRECT ANSWER - Acceptable, provided IA discloses the
arrangement to its clients in writing
Which of the following choices would be considered an investment adviser? - CORRECT
ANSWER - A teacher who works part-time as a financial planner
Which of the following choices is considered a fraudulent act? - CORRECT ANSWER -
Omitting a fact that is relevant to making an investment decision
Which of the following choices is considered a securities offering? - CORRECT
ANSWER - An investor purchased bonds and receives a warrant as a bonus
A licensed insurance agent and an investment adviser have offices next door to each other. The
insurance agent refers clients to the investment adviser, who pays the agent a referral fee plus a
percentage of the management fee for each client who opens an account with the adviser. The
insurance agent: - CORRECT ANSWER - May be required to register as an investment
adviser representative
Persons who violate federal insider trading regulations are subject to all of the following
penalties, EXCEPT: - CORRECT ANSWER - FINRA fines
, MGRADES
Under the Uniform Securities Act, the statute of limitations for criminal violations of the Act is: -
CORRECT ANSWER - Five years
A broker-dealer may need to file all of the following material with the Administrator, EXCEPT:
- CORRECT ANSWER - The marketing materials for a new issue of municipal bonds
Under the Uniform Securities Act, which of the following sales would be considered a nonissuer
transaction? - CORRECT ANSWER - The sale of an outstanding security on the New
York Stock Exchange; A nonissuer transaction is a purchase or sale of a security whereby the
issuer does not benefit, directly or indirectly. A trade between two investors for IBM stock on the
New York Stock Exchange (a secondary market trade) would be an example of a nonissuer
transaction.
Which of the following actions by an agent of a broker-dealer is considered an unethical business
practice? - CORRECT ANSWER - Selling shares in a friend s business outside the agent s
normal course of employment
Which of the following persons is NOT excluded from the definition of a broker-dealer under the
Uniform Securities Act? - CORRECT ANSWER - An investment adviser
Which of the following actions would NOT be prohibited under the Uniform Securities Act? -
CORRECT ANSWER - Telling a client that certain securities issued by banks are exempt
and that a prospectus is not required
LMRT is a broker-dealer registered in State J. An existing client of the firm who is a resident of
State J is on a ski vacation in State C. Under the Uniform Securities Act, if a securities
transaction is effected with the client in State C, LMRT would: - CORRECT ANSWER -
Not be required to register as a broker-dealer in State C if it has no office there
Prior felony convictions must be disclosed on Form U4 if the conviction occurred: - CORRECT
ANSWER - At any time
Series 63 Practice ACTUAL UPDATED
Exam Questions and CORRECT Answers
A married couple is only five years away from retirement. They own a home but have not saved
anything for their retirement. They consult an agent of a broker-dealer about what they can do to
catch up. What should the agent advise them to do? - CORRECT ANSWER - Open IRA
accounts and begin making the maximum possible contributions
IA Incorporated is an investment adviser. BD Securities is a brokerage firm with offices down
the hall. IA Incorporated and BD Securities have an agreement under which IA directs brokerage
transactions to BD and receives a 15% rebate on the commissions that BD charges. This
arrangement is: - CORRECT ANSWER - Acceptable, provided IA discloses the
arrangement to its clients in writing
Which of the following choices would be considered an investment adviser? - CORRECT
ANSWER - A teacher who works part-time as a financial planner
Which of the following choices is considered a fraudulent act? - CORRECT ANSWER -
Omitting a fact that is relevant to making an investment decision
Which of the following choices is considered a securities offering? - CORRECT
ANSWER - An investor purchased bonds and receives a warrant as a bonus
A licensed insurance agent and an investment adviser have offices next door to each other. The
insurance agent refers clients to the investment adviser, who pays the agent a referral fee plus a
percentage of the management fee for each client who opens an account with the adviser. The
insurance agent: - CORRECT ANSWER - May be required to register as an investment
adviser representative
Persons who violate federal insider trading regulations are subject to all of the following
penalties, EXCEPT: - CORRECT ANSWER - FINRA fines
, MGRADES
Under the Uniform Securities Act, the statute of limitations for criminal violations of the Act is: -
CORRECT ANSWER - Five years
A broker-dealer may need to file all of the following material with the Administrator, EXCEPT:
- CORRECT ANSWER - The marketing materials for a new issue of municipal bonds
Under the Uniform Securities Act, which of the following sales would be considered a nonissuer
transaction? - CORRECT ANSWER - The sale of an outstanding security on the New
York Stock Exchange; A nonissuer transaction is a purchase or sale of a security whereby the
issuer does not benefit, directly or indirectly. A trade between two investors for IBM stock on the
New York Stock Exchange (a secondary market trade) would be an example of a nonissuer
transaction.
Which of the following actions by an agent of a broker-dealer is considered an unethical business
practice? - CORRECT ANSWER - Selling shares in a friend s business outside the agent s
normal course of employment
Which of the following persons is NOT excluded from the definition of a broker-dealer under the
Uniform Securities Act? - CORRECT ANSWER - An investment adviser
Which of the following actions would NOT be prohibited under the Uniform Securities Act? -
CORRECT ANSWER - Telling a client that certain securities issued by banks are exempt
and that a prospectus is not required
LMRT is a broker-dealer registered in State J. An existing client of the firm who is a resident of
State J is on a ski vacation in State C. Under the Uniform Securities Act, if a securities
transaction is effected with the client in State C, LMRT would: - CORRECT ANSWER -
Not be required to register as a broker-dealer in State C if it has no office there
Prior felony convictions must be disclosed on Form U4 if the conviction occurred: - CORRECT
ANSWER - At any time
