SERIES 63 - PRACTICE EXAM
QUESTIONS & ANSWERS VERIFIED
100% CORRECT!!
1 of 48
Term
Advance written __________ (limited power of attorney) is required for
both the amount and the type of stock to be purchased. It is not
required for timing or price so an agent is able to use his or her best
judgment in those areas.
Give this one a try later!
discretionary authority authorization
, approval consent
Don't know?
2 of 48
Term
Under the Uniform Securities Act, broker-dealers are excluded from
the definition of an investment advisor only if the advisory services
are __________ to their brokerage business and they receive no special
or separate compensation for offering advice.
Give this one a try later!
exclusive central
primary incidental
Don't know?
3 of 48
Term
Which type of securities is not exempt under the Uniform Securities
Act?
Give this one a try later!
, When selling non-NASDAQ OTC stocks, broker-dealers must disclose their
compensation to customers both at the time of the sale and again on the
confirmation. Confirmations are usually sent to customers the next business day
after the trade date.
They are non-exempt.
Unsolicited, non-issuer transactions are exempt under the USA, not issuer
transactions. Non-issuer transactions take place in the secondary market; issuer
transactions take place in the primary market.
II. & IV.
Under the Uniform Securities Act, the Administrator may require a minimum
capital for registered broker-dealers subject to the limitations of Section 15 of
the Securities Exchange Act of 1934. The Administrator may also establish
minimum financial requirements for investment advisers subject to the limitations
of Section 222 of the Investment Advisers Act of 1940.
Limited partnership interests
Under the Uniform Securities Act, U.S. government bonds, securities
issued by an exchange or NASDAQ-NMS listed companies, and securities
issued by charitable organizations are exempt. Limited partnership
interests are defined as a security under the Act and are non-exempt.
Don't know?
4 of 48
Term
Which of the following is/are defined as either a "sale" or an "offer to
sell" common stock of an issuer?
, I. Any offer to sell the common stock for value
II. Any solicitation of an offer to buy the common stock for value III.
The sale of a bond with detachable warrants to buy the
common stock of that issuer
IV. The gift of the common stock to an employee of the issuer
Give this one a try later!
I, II, & III
The definition of a "sale" is every contract of sale, contract to sell, or
disposition of a security or interest in a security for value. The definition
of an "offer to sell" is every attempt or offer to dispose of or solicitation of
an offer to buy a security. In addition, the sale or offer of a security that
includes rights or warrants to buy another security is considered to be an
offer or sale of the other security. The gift of a security is not considered
to be a sale unless the security is assessable. Common stock is non-
assessable; therefore, it is simply a gift, not a sale.
II, III, & IV
The de minimus exemption applies to IA firms, not to agents or broker-dealers. It
states that IAs who have no place of business in the state but are registered in
another state need not register in this state if their business is limited to advising
five or fewer clients during the preceding 12 months.
I & III only
The intentional omission of any material information is fraud. Even though
government bonds are exempt securities, they are not exempt from the anti-
fraud provisions and deceptive statements are always considered fraud.
Immaterial facts need not be disclosed.
QUESTIONS & ANSWERS VERIFIED
100% CORRECT!!
1 of 48
Term
Advance written __________ (limited power of attorney) is required for
both the amount and the type of stock to be purchased. It is not
required for timing or price so an agent is able to use his or her best
judgment in those areas.
Give this one a try later!
discretionary authority authorization
, approval consent
Don't know?
2 of 48
Term
Under the Uniform Securities Act, broker-dealers are excluded from
the definition of an investment advisor only if the advisory services
are __________ to their brokerage business and they receive no special
or separate compensation for offering advice.
Give this one a try later!
exclusive central
primary incidental
Don't know?
3 of 48
Term
Which type of securities is not exempt under the Uniform Securities
Act?
Give this one a try later!
, When selling non-NASDAQ OTC stocks, broker-dealers must disclose their
compensation to customers both at the time of the sale and again on the
confirmation. Confirmations are usually sent to customers the next business day
after the trade date.
They are non-exempt.
Unsolicited, non-issuer transactions are exempt under the USA, not issuer
transactions. Non-issuer transactions take place in the secondary market; issuer
transactions take place in the primary market.
II. & IV.
Under the Uniform Securities Act, the Administrator may require a minimum
capital for registered broker-dealers subject to the limitations of Section 15 of
the Securities Exchange Act of 1934. The Administrator may also establish
minimum financial requirements for investment advisers subject to the limitations
of Section 222 of the Investment Advisers Act of 1940.
Limited partnership interests
Under the Uniform Securities Act, U.S. government bonds, securities
issued by an exchange or NASDAQ-NMS listed companies, and securities
issued by charitable organizations are exempt. Limited partnership
interests are defined as a security under the Act and are non-exempt.
Don't know?
4 of 48
Term
Which of the following is/are defined as either a "sale" or an "offer to
sell" common stock of an issuer?
, I. Any offer to sell the common stock for value
II. Any solicitation of an offer to buy the common stock for value III.
The sale of a bond with detachable warrants to buy the
common stock of that issuer
IV. The gift of the common stock to an employee of the issuer
Give this one a try later!
I, II, & III
The definition of a "sale" is every contract of sale, contract to sell, or
disposition of a security or interest in a security for value. The definition
of an "offer to sell" is every attempt or offer to dispose of or solicitation of
an offer to buy a security. In addition, the sale or offer of a security that
includes rights or warrants to buy another security is considered to be an
offer or sale of the other security. The gift of a security is not considered
to be a sale unless the security is assessable. Common stock is non-
assessable; therefore, it is simply a gift, not a sale.
II, III, & IV
The de minimus exemption applies to IA firms, not to agents or broker-dealers. It
states that IAs who have no place of business in the state but are registered in
another state need not register in this state if their business is limited to advising
five or fewer clients during the preceding 12 months.
I & III only
The intentional omission of any material information is fraud. Even though
government bonds are exempt securities, they are not exempt from the anti-
fraud provisions and deceptive statements are always considered fraud.
Immaterial facts need not be disclosed.
