Unit 1 Series 65 Practice Questions
1. Under the Securities Act of 1933, the Securities and Exchange Commission
has the authority to:
I. issue stop orders.
II. approve new issues.
III. review standard registration forms.
A) I and III.
B) I, II and III.
C) II and III. - correct answer ✔✔Issue stop orders
Review standard registration forms
2. Which of the following best describes a 12b-1 fee?
A) A fee imposed against a mutual fund company for violating SEC rules.
B) A fee charged by some mutual funds to redeem shares that have been
held less than one year.
C) A fee charged to all mutual funds to cover the expense of FINRA
regulation.
D) A fee charged by some mutual funds to cover sales and distribution
expenses. - correct answer ✔✔A fee charged by some mutual funds to cover sales and distribution
expenses.
3. A major stockholder of the XYZ Corporation makes frequent purchases
and sales of this stock on the open market to give the impression that it is
actively traded. This unethical practice is best described as:
A) pegging.
B) matched orders.
, C) front running.
D) positioning. - correct answer ✔✔Matched Orders
4. Under the Securities Act of 1933, securities issued by charitable
organizations are exempt if:
A) the net earnings from the organization are paid to less than 10 private
stockholders.
B) the organization is a nonprofit company.
C) the organization is funded by government grants.
D) no commissions are paid on the distribution of shares. - correct answer ✔✔The organization is a non-
profit company
5. Which of the following is(are) TRUE regarding the Securities Exchange Act
of 1934?
I. The act bars the use of credit to purchase new issues.
II. The act prohibits the simultaneous purchase and sale of a security to
create the appearance of trading.
III. The act prohibits the spread of false rumors to induce others to trade.
A) I, II and III
B) II and III
C) I and III
D) I and II - correct answer ✔✔All of the above
Civil liability may arise under the Uniform Securities Act if an agent:
I. acting on behalf of an issuer fails to guarantee the safety of a new issue
of debt securities rated BBB or higher.
II. uses an artifice or scheme that could reasonably be considered
misleading in connection with a securities offering.
III. effects a sale of a nonexempt new issue of securities before filing a
1. Under the Securities Act of 1933, the Securities and Exchange Commission
has the authority to:
I. issue stop orders.
II. approve new issues.
III. review standard registration forms.
A) I and III.
B) I, II and III.
C) II and III. - correct answer ✔✔Issue stop orders
Review standard registration forms
2. Which of the following best describes a 12b-1 fee?
A) A fee imposed against a mutual fund company for violating SEC rules.
B) A fee charged by some mutual funds to redeem shares that have been
held less than one year.
C) A fee charged to all mutual funds to cover the expense of FINRA
regulation.
D) A fee charged by some mutual funds to cover sales and distribution
expenses. - correct answer ✔✔A fee charged by some mutual funds to cover sales and distribution
expenses.
3. A major stockholder of the XYZ Corporation makes frequent purchases
and sales of this stock on the open market to give the impression that it is
actively traded. This unethical practice is best described as:
A) pegging.
B) matched orders.
, C) front running.
D) positioning. - correct answer ✔✔Matched Orders
4. Under the Securities Act of 1933, securities issued by charitable
organizations are exempt if:
A) the net earnings from the organization are paid to less than 10 private
stockholders.
B) the organization is a nonprofit company.
C) the organization is funded by government grants.
D) no commissions are paid on the distribution of shares. - correct answer ✔✔The organization is a non-
profit company
5. Which of the following is(are) TRUE regarding the Securities Exchange Act
of 1934?
I. The act bars the use of credit to purchase new issues.
II. The act prohibits the simultaneous purchase and sale of a security to
create the appearance of trading.
III. The act prohibits the spread of false rumors to induce others to trade.
A) I, II and III
B) II and III
C) I and III
D) I and II - correct answer ✔✔All of the above
Civil liability may arise under the Uniform Securities Act if an agent:
I. acting on behalf of an issuer fails to guarantee the safety of a new issue
of debt securities rated BBB or higher.
II. uses an artifice or scheme that could reasonably be considered
misleading in connection with a securities offering.
III. effects a sale of a nonexempt new issue of securities before filing a
