Series 65
cumulative preferred stock - correct answer ✔✔if the dividend is not paid, it accumulates to the next
year
Registration by Coordination - correct answer ✔✔State registration statement coordinated w/ federal.
New Issuers (IPOs)
When a security is in registration with the SEC under the Securities Act of 1933, that registration can be
coordinated with the Administrator for state registration. A registration under coordination will
automatically become effective at the same time the federal registration becomes effective, provided
that no stop order is in effect, the registration statement has been on file with the Administrator for at
least 10 days, and a statement of the minimum and maximum proposed offering prices and underwriting
discounts has been on file for two business days. A prospectus meeting the requirements of the
Securities Act of 1933 must also be filed with the Administrator.
Under the Uniform Securities Act, in order to register a security using registration by coordination, the
security must also be registered with the SEC under the Securities Act of 1933.
Registration by Notification - correct answer ✔✔TSLAW- Reserved for the Largest Issuers with High-
Quality Securities.
500+ shareholders
Total net worth + $4mm
In business for 36 months
Registration by Qualification - correct answer ✔✔the registration becomes effective only when
determined by the Administrator. (not federal.)
de minimis exemption - correct answer ✔✔Advisor has no place of business in state, and does not have
direct communications to more than 5 non-institutional clients in state w/ in 12 consecutive months
Benefit of ETFs - correct answer ✔✔purchased on margin, can be sold short.
,Fiscal Policy - correct answer ✔✔Controlled by Congress
Monetary Policy - correct answer ✔✔Controlled by Federal Reserve
Irrevocable trusts - correct answer ✔✔cannot be modified or terminated w/o permission of beneficiary
Bypass trusts - correct answer ✔✔(Credit shelter trusts) allows assets of deceased to "bypass" estate
taxes.
Inter Vivos Trust - correct answer ✔✔created during grantors lifetime.
Simple Trust - correct answer ✔✔trustee is required to distribute all income generated by trust to
beneficiaries in year received
Complex Trust - correct answer ✔✔is permitted to retain some of its investment income. (In a simple
trust, this income must be distributed to the beneficiaries in the year received.)
Working Capital - correct answer ✔✔(Current Assets - Current Liabilities)
measures liquidity, assess a companies ability to pay its current liabilities (<1yr)
Current Ratios - correct answer ✔✔(Current assets / Current Liabilities)
measurement of liquidity for a one year period
Quick Ratio - correct answer ✔✔(Current Assets - Inventory) / Current Liabilities = Quick Ratio
A more stringent measurement of a company's liquidity than current ratio. 1-3 month period of time
Debt-to-Equity Ratio - correct answer ✔✔Bonds + Preferred Stock / common stock at par + capital
surplus + retained earnings.
A company w/ more debt than equity outstanding is considered leveraged
, Earnings Per Share - correct answer ✔✔(Net Income - Preferred Dividends) / Number of outstanding
shares.
Price to Earnings Ratio (P/E) - correct answer ✔✔Current Market Price/ Earnings Per Share
State Registration (AUM) - correct answer ✔✔Office in state.
< $100million (State)
$100-110 Million (choice- state or SEC)
>$110 (SEC)
Under the Investment Advisers Act of 1940, when is a firm's registration required to be electronically
filed or renewed? - correct answer ✔✔Within 90 days of the adviser's fiscal year-end
What type of order may a customer use to protect profits or limit losses in current positions? - correct
answer ✔✔Stop orders are entered to limit losses or to protect profits on current positions in an
investor's account. If the market rises, buy stop orders may be used to protect short stock positions. If
the market falls, sell stop orders may be used to protect long stock positions.
If client dies and not have a will, from whom may the investment adviser representative accept
instructions? - correct answer ✔✔intestate - an administrator appointed by the court
Relationship between bond prices and interest rates. - correct answer ✔✔The movement of existing
bond prices is inversely related to the changes in market interest rates. If interest rates are expected to
fall, prices will then rise.
Interest Rates and yields are correlated.
In order for a fund to assess a fee under a 12b-1 plan, the plan must be approved by: - correct answer
✔✔The Shareholders
cumulative preferred stock - correct answer ✔✔if the dividend is not paid, it accumulates to the next
year
Registration by Coordination - correct answer ✔✔State registration statement coordinated w/ federal.
New Issuers (IPOs)
When a security is in registration with the SEC under the Securities Act of 1933, that registration can be
coordinated with the Administrator for state registration. A registration under coordination will
automatically become effective at the same time the federal registration becomes effective, provided
that no stop order is in effect, the registration statement has been on file with the Administrator for at
least 10 days, and a statement of the minimum and maximum proposed offering prices and underwriting
discounts has been on file for two business days. A prospectus meeting the requirements of the
Securities Act of 1933 must also be filed with the Administrator.
Under the Uniform Securities Act, in order to register a security using registration by coordination, the
security must also be registered with the SEC under the Securities Act of 1933.
Registration by Notification - correct answer ✔✔TSLAW- Reserved for the Largest Issuers with High-
Quality Securities.
500+ shareholders
Total net worth + $4mm
In business for 36 months
Registration by Qualification - correct answer ✔✔the registration becomes effective only when
determined by the Administrator. (not federal.)
de minimis exemption - correct answer ✔✔Advisor has no place of business in state, and does not have
direct communications to more than 5 non-institutional clients in state w/ in 12 consecutive months
Benefit of ETFs - correct answer ✔✔purchased on margin, can be sold short.
,Fiscal Policy - correct answer ✔✔Controlled by Congress
Monetary Policy - correct answer ✔✔Controlled by Federal Reserve
Irrevocable trusts - correct answer ✔✔cannot be modified or terminated w/o permission of beneficiary
Bypass trusts - correct answer ✔✔(Credit shelter trusts) allows assets of deceased to "bypass" estate
taxes.
Inter Vivos Trust - correct answer ✔✔created during grantors lifetime.
Simple Trust - correct answer ✔✔trustee is required to distribute all income generated by trust to
beneficiaries in year received
Complex Trust - correct answer ✔✔is permitted to retain some of its investment income. (In a simple
trust, this income must be distributed to the beneficiaries in the year received.)
Working Capital - correct answer ✔✔(Current Assets - Current Liabilities)
measures liquidity, assess a companies ability to pay its current liabilities (<1yr)
Current Ratios - correct answer ✔✔(Current assets / Current Liabilities)
measurement of liquidity for a one year period
Quick Ratio - correct answer ✔✔(Current Assets - Inventory) / Current Liabilities = Quick Ratio
A more stringent measurement of a company's liquidity than current ratio. 1-3 month period of time
Debt-to-Equity Ratio - correct answer ✔✔Bonds + Preferred Stock / common stock at par + capital
surplus + retained earnings.
A company w/ more debt than equity outstanding is considered leveraged
, Earnings Per Share - correct answer ✔✔(Net Income - Preferred Dividends) / Number of outstanding
shares.
Price to Earnings Ratio (P/E) - correct answer ✔✔Current Market Price/ Earnings Per Share
State Registration (AUM) - correct answer ✔✔Office in state.
< $100million (State)
$100-110 Million (choice- state or SEC)
>$110 (SEC)
Under the Investment Advisers Act of 1940, when is a firm's registration required to be electronically
filed or renewed? - correct answer ✔✔Within 90 days of the adviser's fiscal year-end
What type of order may a customer use to protect profits or limit losses in current positions? - correct
answer ✔✔Stop orders are entered to limit losses or to protect profits on current positions in an
investor's account. If the market rises, buy stop orders may be used to protect short stock positions. If
the market falls, sell stop orders may be used to protect long stock positions.
If client dies and not have a will, from whom may the investment adviser representative accept
instructions? - correct answer ✔✔intestate - an administrator appointed by the court
Relationship between bond prices and interest rates. - correct answer ✔✔The movement of existing
bond prices is inversely related to the changes in market interest rates. If interest rates are expected to
fall, prices will then rise.
Interest Rates and yields are correlated.
In order for a fund to assess a fee under a 12b-1 plan, the plan must be approved by: - correct answer
✔✔The Shareholders
