Nevada Business Broker Licensing Exam
Practice Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following is a primary responsibility of a Nevada business
broker?
A. Providing legal representation in court
B. Facilitating the sale or purchase of businesses
C. Auditing financial statements
D. Managing employee payroll
Business brokers primarily act as intermediaries between buyers and
sellers of businesses, assisting in negotiations, valuations, and the transfer
process rather than providing legal or accounting services.
2. When valuing a small business in Nevada, which method focuses on
the income the business generates?
A. Asset-based approach
B. Market comparison approach
C. Income capitalization approach
D. Replacement cost approach
The income capitalization approach determines value based on the
business’s ability to generate future earnings, making it suitable for
income-producing businesses.
3. Which of the following is considered confidential information a broker
must protect?
A. Publicly listed property addresses
, B. Customer lists and financial records
C. Business hours
D. Product catalog
Confidential information includes details that, if disclosed, could harm the
business, such as financial data, trade secrets, and client lists.
4. In Nevada, a business broker must have which license to legally
conduct brokerage services for a business sale?
A. Real estate license only
B. CPA license
C. Nevada business broker license
D. General contractor license
Nevada requires business brokers to hold a specific license authorizing
them to facilitate business sales legally.
5. What is the purpose of a confidentiality agreement in a business sale?
A. To set the purchase price
B. To outline employment contracts
C. To protect sensitive business information during negotiations
D. To register the business with the state
Confidentiality agreements ensure that proprietary or sensitive
information shared with prospective buyers is not disclosed without
authorization.
6. A Nevada business broker receives a commission only if a sale closes.
This is an example of:
A. Hourly compensation
B. Salary-based pay
C. Contingency fee
D. Retainer
A contingency fee is earned only upon successful completion of the
transaction, commonly used in business brokerage.
, 7. Which federal law requires disclosure of financial information for the
sale of certain businesses?
A. Sherman Act
B. Securities Act of 1933
C. Clayton Act
D. Federal Trade Commission Act
The Securities Act of 1933 mandates disclosure of material financial
information when securities, including ownership interests in certain
businesses, are offered to investors.
8. In Nevada, the business broker must disclose any material conflicts of
interest. Which scenario represents a conflict of interest?
A. Broker attending a trade conference
B. Broker representing both the buyer and seller without disclosure
C. Broker sending marketing emails
D. Broker performing a valuation
A conflict arises when the broker’s duties to one party may compromise
duties to another, such as dual representation without informed consent.
9. Which of the following best describes goodwill in a business valuation?
A. The value of inventory
B. The intangible value from reputation, customer relationships, and
brand recognition
C. The replacement cost of assets
D. Current cash on hand
Goodwill represents the non-physical assets that contribute to a business’s
earning power beyond its tangible assets.
10. A seller asks a broker to list their business at an inflated price
without market support. The broker should:
A. List at the requested price
B. Advise the seller on realistic market value and risks
Practice Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following is a primary responsibility of a Nevada business
broker?
A. Providing legal representation in court
B. Facilitating the sale or purchase of businesses
C. Auditing financial statements
D. Managing employee payroll
Business brokers primarily act as intermediaries between buyers and
sellers of businesses, assisting in negotiations, valuations, and the transfer
process rather than providing legal or accounting services.
2. When valuing a small business in Nevada, which method focuses on
the income the business generates?
A. Asset-based approach
B. Market comparison approach
C. Income capitalization approach
D. Replacement cost approach
The income capitalization approach determines value based on the
business’s ability to generate future earnings, making it suitable for
income-producing businesses.
3. Which of the following is considered confidential information a broker
must protect?
A. Publicly listed property addresses
, B. Customer lists and financial records
C. Business hours
D. Product catalog
Confidential information includes details that, if disclosed, could harm the
business, such as financial data, trade secrets, and client lists.
4. In Nevada, a business broker must have which license to legally
conduct brokerage services for a business sale?
A. Real estate license only
B. CPA license
C. Nevada business broker license
D. General contractor license
Nevada requires business brokers to hold a specific license authorizing
them to facilitate business sales legally.
5. What is the purpose of a confidentiality agreement in a business sale?
A. To set the purchase price
B. To outline employment contracts
C. To protect sensitive business information during negotiations
D. To register the business with the state
Confidentiality agreements ensure that proprietary or sensitive
information shared with prospective buyers is not disclosed without
authorization.
6. A Nevada business broker receives a commission only if a sale closes.
This is an example of:
A. Hourly compensation
B. Salary-based pay
C. Contingency fee
D. Retainer
A contingency fee is earned only upon successful completion of the
transaction, commonly used in business brokerage.
, 7. Which federal law requires disclosure of financial information for the
sale of certain businesses?
A. Sherman Act
B. Securities Act of 1933
C. Clayton Act
D. Federal Trade Commission Act
The Securities Act of 1933 mandates disclosure of material financial
information when securities, including ownership interests in certain
businesses, are offered to investors.
8. In Nevada, the business broker must disclose any material conflicts of
interest. Which scenario represents a conflict of interest?
A. Broker attending a trade conference
B. Broker representing both the buyer and seller without disclosure
C. Broker sending marketing emails
D. Broker performing a valuation
A conflict arises when the broker’s duties to one party may compromise
duties to another, such as dual representation without informed consent.
9. Which of the following best describes goodwill in a business valuation?
A. The value of inventory
B. The intangible value from reputation, customer relationships, and
brand recognition
C. The replacement cost of assets
D. Current cash on hand
Goodwill represents the non-physical assets that contribute to a business’s
earning power beyond its tangible assets.
10. A seller asks a broker to list their business at an inflated price
without market support. The broker should:
A. List at the requested price
B. Advise the seller on realistic market value and risks
