SERIES 63 TEST QUESTIONS WITH
CORRECT ANSWERS
Edward is registered as an Investment Adviser and as an Agent for a Broker-Dealer.
Edward has many clients, some of whom he charges an advisory fee and manages their
money, others where he charges them commission for transactions executed but does not
charge an advisory fee, and others where he charges an advisory fee for managed funds
and charges a commission for transactions executed. Based on Edward's different forms of
compensation, which of the following are true under NASAA Rules?
Edward is required to disclose all forms of compensation prior to the execution of transactions,
providing advice to clients or taking funds under management.
An order ticket for a securities transaction would contain all of the following items
EXCEPT the
the exchange on which the security trades.
According to the Uniform Securities Act, certain transactions qualify for exemption from
registration. Which of the following would NOT qualify for an exemption in terms of
transactions?
Any non-issuer transaction including interests in a blind pool offering.
All of the following choices adhere to the NASAA Model Rule on Unethical Business
practices of Investment Advisers EXCEPT when an investment adviser:
decides to borrow funds with a promissory note in writing from an individual client.
,According to the Uniform Securities Act, all the following must be included in a written
advisory contract except:
that the investment adviser has been qualified by examination, experience or training to be an
investment adviser
Under the Uniform Securities Act, an agent must disclose personal knowledge concerning a
material public fact about an issuer to a customer in connection with the sale of an issue:
All of the above.
A broker—dealer registers in all states where they do business, which constitutes the
majority of the US. The firm also is registered with the SEC. Which of the following
statements is TRUE according to the Uniform Securities Act?
The broker-dealer must abide by federal standards when it comes to financial reporting
requirements, and would not be subject to additional requirements by any State Administrator.
All of the following are included in the definition of an "agent" under the Uniform
securities Act, EXCEPT:
An individual who is a partner of a broker-dealer who effects purchases and sales of the broker-
dealer's securities to existing employees where no commission is paid
Which of the following should NOT be a major consideration by an investment adviser
giving advice in accordance with the regulations of the Prudent Investor Act?
The adviser should consider the fees collected and amount of time remaining in the contract held
between the client and adviser when making investment decisions and creating investment
strategies for the client.
, ABC Advisers Inc. is an investment advisory firm that charges clients an annual fee of 1%
of assets for their advisory services. ABC is approached by XYZ broker-dealer who offers
to pay ABC trailing commissions on all mutual funds purchased through the broker-
dealer. This would allow ABC to make additional revenue from mutual fund customers.
Which of the following is true pertaining to such arrangements?
If IA clients receive full disclosure about the asset-based fees as well as the commission-based
fees, the arrangement is allowed.
Which of the following would be considered a financial institution or institutional buyer
which would fall within the scope of the exemptions for transactions under the Uniform
Securities Act?
I. Banks and savings institutions
II. Trust companies and insurance companies
III. Pension or profit-sharing trusts
IV. Broker-dealers
I, II, III, and IV
If an agent terminates his employment with one broker-dealer and has not yet been hired
by another broker-dealer, the agent's registration:
is no longer effective
Under the Uniform Securities Act, which of the following would NOT necessarily be
considered an Investment Adviser Representative?
A person who performs analysis of securities and writes research reports.
CORRECT ANSWERS
Edward is registered as an Investment Adviser and as an Agent for a Broker-Dealer.
Edward has many clients, some of whom he charges an advisory fee and manages their
money, others where he charges them commission for transactions executed but does not
charge an advisory fee, and others where he charges an advisory fee for managed funds
and charges a commission for transactions executed. Based on Edward's different forms of
compensation, which of the following are true under NASAA Rules?
Edward is required to disclose all forms of compensation prior to the execution of transactions,
providing advice to clients or taking funds under management.
An order ticket for a securities transaction would contain all of the following items
EXCEPT the
the exchange on which the security trades.
According to the Uniform Securities Act, certain transactions qualify for exemption from
registration. Which of the following would NOT qualify for an exemption in terms of
transactions?
Any non-issuer transaction including interests in a blind pool offering.
All of the following choices adhere to the NASAA Model Rule on Unethical Business
practices of Investment Advisers EXCEPT when an investment adviser:
decides to borrow funds with a promissory note in writing from an individual client.
,According to the Uniform Securities Act, all the following must be included in a written
advisory contract except:
that the investment adviser has been qualified by examination, experience or training to be an
investment adviser
Under the Uniform Securities Act, an agent must disclose personal knowledge concerning a
material public fact about an issuer to a customer in connection with the sale of an issue:
All of the above.
A broker—dealer registers in all states where they do business, which constitutes the
majority of the US. The firm also is registered with the SEC. Which of the following
statements is TRUE according to the Uniform Securities Act?
The broker-dealer must abide by federal standards when it comes to financial reporting
requirements, and would not be subject to additional requirements by any State Administrator.
All of the following are included in the definition of an "agent" under the Uniform
securities Act, EXCEPT:
An individual who is a partner of a broker-dealer who effects purchases and sales of the broker-
dealer's securities to existing employees where no commission is paid
Which of the following should NOT be a major consideration by an investment adviser
giving advice in accordance with the regulations of the Prudent Investor Act?
The adviser should consider the fees collected and amount of time remaining in the contract held
between the client and adviser when making investment decisions and creating investment
strategies for the client.
, ABC Advisers Inc. is an investment advisory firm that charges clients an annual fee of 1%
of assets for their advisory services. ABC is approached by XYZ broker-dealer who offers
to pay ABC trailing commissions on all mutual funds purchased through the broker-
dealer. This would allow ABC to make additional revenue from mutual fund customers.
Which of the following is true pertaining to such arrangements?
If IA clients receive full disclosure about the asset-based fees as well as the commission-based
fees, the arrangement is allowed.
Which of the following would be considered a financial institution or institutional buyer
which would fall within the scope of the exemptions for transactions under the Uniform
Securities Act?
I. Banks and savings institutions
II. Trust companies and insurance companies
III. Pension or profit-sharing trusts
IV. Broker-dealers
I, II, III, and IV
If an agent terminates his employment with one broker-dealer and has not yet been hired
by another broker-dealer, the agent's registration:
is no longer effective
Under the Uniform Securities Act, which of the following would NOT necessarily be
considered an Investment Adviser Representative?
A person who performs analysis of securities and writes research reports.
