Series 65: Unit 8 Exam
Which of the following statements made by an investment adviser would violate the antifraud provisions
of the Uniform Securities Act?
A. "Our fees are nonnegotiable" when Form ADV Part 2A clearly indicates otherwise.
B. "We have over $40 billion in assets under management representing both institutional and retail
clients."
C. "We require any associated person determining general investment advice to be a CFA."
D. "We believe that fundamental analysis is the best way to select stocks for our clients." - correct
answer ✔✔"Our fees are nonnegotiable" when Form ADV Part 2A clearly indicates otherwise"
Under the Uniform Securities Act, a private placement is considered an exempt transaction if
A. the sale is unsolicited.
B. the number of noninstitutional offers is limited to a maximum of 10 in any 12-month period.
C. the security is rated in the top three grades by a recognized rating agency.
D. no payment is made with any purchase. - correct answer ✔✔The number of noninstitutional offers is
limited to a maximum of 10 in any 12-month period
XYZ Brick Company wishes to raise capital by issuing some securities in its home state. The CEO of the
company feels that registration with the administrator is unnecessary because the issue is exempt.
Should XYZ be served with a court order, the burden of proving its issue is exempt is on the
A. court.
B. administrator.
C. company.
D. CEO - correct answer ✔✔Company
All of the following must be specified in the state registration statement of the security except
,A. a stop order from any other state that affects the offering of the security within that state.
B. the total amount of the security that will be offered in each state.
C. the total amount of the security that will be offered in this state.
D. all other states where the security is currently registered or will be registered. - correct answer
✔✔The total amount of the security that will be offered in each state
The total amount of the security to be offered in other states need not be specified, although identifying
those states is required. The amount of the security to be offered in the state of registration is required,
as it generally provides the basis on which the registration fee is calculated. A stop order from another
state that affects the offering of the security within the state must be included. The registration
statement will always describe the intended use of the proceeds.
When a security is being registered under coordination, all of the following are required except
A. none of these are exceptions.
B. filing with the administrator a statement of the maximum and minimum proposed offering price and
maximum underwriting discounts or commissions concurrently with the filing of the registration
statement with the SEC.
C. prompt filing with the administrator of any amendments filed with the SEC.
D. a description of the proposed use of the proceeds of the underwriting. - correct answer ✔✔Filing
with the administrator a statement of the maximum and minimum proposed offering price and
maximum underwriting discounts or commissions concurrently with the filing of the registration
statement with the SEC
The statement of the maximum and minimum proposed offering prices and the maximum underwriting
compensation must be filed at least two full business days before the effective date, not with the initial
filing.
A customer requests information on a new mutual fund and asks her agent to circle the important
information in the prospectus and information he thinks will be of special interest to her. This is
permitted
A. without restriction.
,B. if approved by a principal.
C. under no circumstances.
D. if accompanied by an unmarked prospectus. - correct answer ✔✔Under no circumstances
The U.S. Supreme Court case resulting in the decision that an investment contract is a security is the
A. Golub case.
B. Steiner case.
C. Howey case.
D. Muller case. - correct answer ✔✔Howey case
As referred to in the NSMIA, the term federal covered security would apply to which of the following?
1. Preferred stock in the XYZ Corporation whose common stock is listed on the NYSE
2. Common stock in ABCD, Inc., a stock traded on the OTC Link
3. Springfield, Illinois, municipal bonds sold to a resident of Springfield, Illinois
4. Springfield, Illinois, municipal bonds sold to a resident of Springfield, Missouri - correct answer
✔✔Preferred stock in the XYZ Corporation whose common stock is listed on the NYSE and Springfield,
Illinois, municipal bonds sold to a resident of Springfield, Missouri
Fearing loss of a potential sale, an agent omits facts that a prudent investor requires to make informed
decisions. Under the Uniform Securities Act, this action is
A. fraudulent for exempt securities only.
B. not fraudulent if there was willful intent to omit the information.
C. fraudulent for nonexempt securities only.
D. fraudulent for both exempt and nonexempt securities. - correct answer ✔✔Fraudulent for both
exempt and nonexempt securities
, Following the publication of a tombstone advertisement relating to an issue undergoing registration with
SEC, an agent of a broker-dealer receives a call from a client who expresses the desire to purchase 100
shares at the best available price. The agent is permitted to
A. send a preliminary prospectus.
B. send in-house research.
C. submit a pending order.
D. send published articles about the issuer. - correct answer ✔✔Send a preliminary prospectus
The Uniform Securities Act would consider which of the following insurance products to be a security?
A. Modified endowment life insurance
B. Mortgage life insurance
C. Variable life insurance
D. Fixed annuity - correct answer ✔✔Variable life insurance
Which of the following can issue stock?
A. A city
B. A state
C. The U.S. Treasury
D. A corporation - correct answer ✔✔A corporation
Each of the following persons is able to issue securities except
A. a partnership.
B. a credit union.
C. an individual.
D. a corporation. - correct answer ✔✔An individual
Which of the following statements made by an investment adviser would violate the antifraud provisions
of the Uniform Securities Act?
A. "Our fees are nonnegotiable" when Form ADV Part 2A clearly indicates otherwise.
B. "We have over $40 billion in assets under management representing both institutional and retail
clients."
C. "We require any associated person determining general investment advice to be a CFA."
D. "We believe that fundamental analysis is the best way to select stocks for our clients." - correct
answer ✔✔"Our fees are nonnegotiable" when Form ADV Part 2A clearly indicates otherwise"
Under the Uniform Securities Act, a private placement is considered an exempt transaction if
A. the sale is unsolicited.
B. the number of noninstitutional offers is limited to a maximum of 10 in any 12-month period.
C. the security is rated in the top three grades by a recognized rating agency.
D. no payment is made with any purchase. - correct answer ✔✔The number of noninstitutional offers is
limited to a maximum of 10 in any 12-month period
XYZ Brick Company wishes to raise capital by issuing some securities in its home state. The CEO of the
company feels that registration with the administrator is unnecessary because the issue is exempt.
Should XYZ be served with a court order, the burden of proving its issue is exempt is on the
A. court.
B. administrator.
C. company.
D. CEO - correct answer ✔✔Company
All of the following must be specified in the state registration statement of the security except
,A. a stop order from any other state that affects the offering of the security within that state.
B. the total amount of the security that will be offered in each state.
C. the total amount of the security that will be offered in this state.
D. all other states where the security is currently registered or will be registered. - correct answer
✔✔The total amount of the security that will be offered in each state
The total amount of the security to be offered in other states need not be specified, although identifying
those states is required. The amount of the security to be offered in the state of registration is required,
as it generally provides the basis on which the registration fee is calculated. A stop order from another
state that affects the offering of the security within the state must be included. The registration
statement will always describe the intended use of the proceeds.
When a security is being registered under coordination, all of the following are required except
A. none of these are exceptions.
B. filing with the administrator a statement of the maximum and minimum proposed offering price and
maximum underwriting discounts or commissions concurrently with the filing of the registration
statement with the SEC.
C. prompt filing with the administrator of any amendments filed with the SEC.
D. a description of the proposed use of the proceeds of the underwriting. - correct answer ✔✔Filing
with the administrator a statement of the maximum and minimum proposed offering price and
maximum underwriting discounts or commissions concurrently with the filing of the registration
statement with the SEC
The statement of the maximum and minimum proposed offering prices and the maximum underwriting
compensation must be filed at least two full business days before the effective date, not with the initial
filing.
A customer requests information on a new mutual fund and asks her agent to circle the important
information in the prospectus and information he thinks will be of special interest to her. This is
permitted
A. without restriction.
,B. if approved by a principal.
C. under no circumstances.
D. if accompanied by an unmarked prospectus. - correct answer ✔✔Under no circumstances
The U.S. Supreme Court case resulting in the decision that an investment contract is a security is the
A. Golub case.
B. Steiner case.
C. Howey case.
D. Muller case. - correct answer ✔✔Howey case
As referred to in the NSMIA, the term federal covered security would apply to which of the following?
1. Preferred stock in the XYZ Corporation whose common stock is listed on the NYSE
2. Common stock in ABCD, Inc., a stock traded on the OTC Link
3. Springfield, Illinois, municipal bonds sold to a resident of Springfield, Illinois
4. Springfield, Illinois, municipal bonds sold to a resident of Springfield, Missouri - correct answer
✔✔Preferred stock in the XYZ Corporation whose common stock is listed on the NYSE and Springfield,
Illinois, municipal bonds sold to a resident of Springfield, Missouri
Fearing loss of a potential sale, an agent omits facts that a prudent investor requires to make informed
decisions. Under the Uniform Securities Act, this action is
A. fraudulent for exempt securities only.
B. not fraudulent if there was willful intent to omit the information.
C. fraudulent for nonexempt securities only.
D. fraudulent for both exempt and nonexempt securities. - correct answer ✔✔Fraudulent for both
exempt and nonexempt securities
, Following the publication of a tombstone advertisement relating to an issue undergoing registration with
SEC, an agent of a broker-dealer receives a call from a client who expresses the desire to purchase 100
shares at the best available price. The agent is permitted to
A. send a preliminary prospectus.
B. send in-house research.
C. submit a pending order.
D. send published articles about the issuer. - correct answer ✔✔Send a preliminary prospectus
The Uniform Securities Act would consider which of the following insurance products to be a security?
A. Modified endowment life insurance
B. Mortgage life insurance
C. Variable life insurance
D. Fixed annuity - correct answer ✔✔Variable life insurance
Which of the following can issue stock?
A. A city
B. A state
C. The U.S. Treasury
D. A corporation - correct answer ✔✔A corporation
Each of the following persons is able to issue securities except
A. a partnership.
B. a credit union.
C. an individual.
D. a corporation. - correct answer ✔✔An individual
