Question 1
An agent receives material inside information about a publicly held company. All of the
following actions by the agent are violations of the Uniform Securities Act EXCEPT:
A: soliciting orders from customers based on this information
B: discussing the information with the principal of the broker-dealer
C: effecting trades in discretionary customer accounts based on this information
D: effecting trades for the agent's personal account based on this information
CORRECT ANSWER
A
Question 2
All of the following actions by an investment adviser are violations of the Uniform
Securities Act EXCEPT the adviser:
A: makes misleading statements to a client, but the client profits from the advice
B: makes misleading statements to a client, but no transaction results from the advice
C: discloses the risks of the investment, but the client loses as a result of the advice
D: makes misleading statements to a client, but the client is an accredited investor
CORRECT ANSWER
C
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,Question 3
A Registered Investment Adviser charges a fee to customers based on a percentage of
assets under management. The adviser invests customer funds solely in mutual funds that
have a sales charge. Which statement is TRUE?
A: The only disclosure that the adviser must make to the customer is the asset management
fee
B: The only disclosure that the adviser must make to the customer is the sales charge
C: The adviser must disclose to the customer both the management fee and sales charge to
the customer
D: The adviser is not required to disclose to the customer neither the management fee nor
the sales charge
CORRECT ANSWER
C
Question 4
Which of the following statements are TRUE regarding joint accounts?
I Orders can be given by either party
II All parties must enter orders together
III Checks can be made out in the name of either party
IV Checks can only be made out to all parties together
A: I and III
B: I and IV
C: II and III
D: II and IV
CORRECT ANSWER
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, B
Question 5
Given the formula: X = 72/Rate of Return
X is equal to the:
A: Actuarial yield to standard retirement age
B: Time necessary to double an investment value
C: Standard deviation of investment return
D: Holding period rate of return on an investment
CORRECT ANSWER
B
Question 6
Which of the following is (are) prohibited in a margin account?
A: A customer buying a security without the intention to pay on settlement
B: A customer selling a security without the intention to deliver on settlement
C: A customer selling short a security that cannot be borrowed and delivered on settlement
D: All of the above
CORRECT ANSWER
D
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, Question 7
A Registered Investment Adviser uses past performance in an advertisement. The results
shown must be based on:
A: Gross investment income before any deductions
B: Investment income after the deduction of expenses
C: Investment income after the deduction of management fees
D: Investment income after the deduction of management fees and expenses
CORRECT ANSWER
D
Question 8
An investment generates the following annual returns:
Year 1:6%
Year 2:4%
Year 3:2%
Year 4:10%
Year 5:8%
The median return is:
A: 2%
B: 4%
C: 6%
D: 8%
CORRECT ANSWER
C
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An agent receives material inside information about a publicly held company. All of the
following actions by the agent are violations of the Uniform Securities Act EXCEPT:
A: soliciting orders from customers based on this information
B: discussing the information with the principal of the broker-dealer
C: effecting trades in discretionary customer accounts based on this information
D: effecting trades for the agent's personal account based on this information
CORRECT ANSWER
A
Question 2
All of the following actions by an investment adviser are violations of the Uniform
Securities Act EXCEPT the adviser:
A: makes misleading statements to a client, but the client profits from the advice
B: makes misleading statements to a client, but no transaction results from the advice
C: discloses the risks of the investment, but the client loses as a result of the advice
D: makes misleading statements to a client, but the client is an accredited investor
CORRECT ANSWER
C
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,Question 3
A Registered Investment Adviser charges a fee to customers based on a percentage of
assets under management. The adviser invests customer funds solely in mutual funds that
have a sales charge. Which statement is TRUE?
A: The only disclosure that the adviser must make to the customer is the asset management
fee
B: The only disclosure that the adviser must make to the customer is the sales charge
C: The adviser must disclose to the customer both the management fee and sales charge to
the customer
D: The adviser is not required to disclose to the customer neither the management fee nor
the sales charge
CORRECT ANSWER
C
Question 4
Which of the following statements are TRUE regarding joint accounts?
I Orders can be given by either party
II All parties must enter orders together
III Checks can be made out in the name of either party
IV Checks can only be made out to all parties together
A: I and III
B: I and IV
C: II and III
D: II and IV
CORRECT ANSWER
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, B
Question 5
Given the formula: X = 72/Rate of Return
X is equal to the:
A: Actuarial yield to standard retirement age
B: Time necessary to double an investment value
C: Standard deviation of investment return
D: Holding period rate of return on an investment
CORRECT ANSWER
B
Question 6
Which of the following is (are) prohibited in a margin account?
A: A customer buying a security without the intention to pay on settlement
B: A customer selling a security without the intention to deliver on settlement
C: A customer selling short a security that cannot be borrowed and delivered on settlement
D: All of the above
CORRECT ANSWER
D
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, Question 7
A Registered Investment Adviser uses past performance in an advertisement. The results
shown must be based on:
A: Gross investment income before any deductions
B: Investment income after the deduction of expenses
C: Investment income after the deduction of management fees
D: Investment income after the deduction of management fees and expenses
CORRECT ANSWER
D
Question 8
An investment generates the following annual returns:
Year 1:6%
Year 2:4%
Year 3:2%
Year 4:10%
Year 5:8%
The median return is:
A: 2%
B: 4%
C: 6%
D: 8%
CORRECT ANSWER
C
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