Series 65 Midterm Exam 2025
Questions and Answers
Centripetal Investment Advisers (CIA) has its principal office in State X and is also
registered in States Y and Z. CIA would be considered to be maintaining custody of
client assets in all of the following cases EXCEPT
A)
checks made out to CIA are deposited within 3 business days
B)
CIA's advisory contract calls for the automatic deduction of advisory fees
C)
checks made out to 3rd parties are forwarded within 3 business days
D)
,CIA has a power of attorney granting authority to withdraw funds from the custodian -
ANSWER✔✔-C
An investment adviser may borrow from all of the following clients EXCEPT
A)
a commercial bank in conjunction with a mortgage on the office building from which
the advisory operates
B)
a savings and loan association that has offered to finance new computers for the
adviser's office
C)
a mortgage broker who helped the adviser negotiate mortgage terms for its office
building
D)
a broker-dealer in conjunction with a margin account - ANSWER✔✔-C
Following the rules of the Uniform Securities Act, an investment adviser ensures that all
clients receive a written contract prior to the firm engaging in advisory activities in their
accounts. The contract clearly states all of the account details, including the services to
,be provided, the fees to be charged, and the procedure for handling early terminations.
Because the IA has a tendency to pursue some rather unorthodox methods of analysis,
the contract provides that the clients waive their right to sue in the event that the IA
violates any provision of the USA. Under the NASAA Model Rule on Unethical
Business Practices of Investment Advisers, Investment Adviser Representatives and
Federal Covered Advisers,
A)
the contract is misleading and could lead to action by the Administrator
B)
the contract is only enforceable if signed by the client
C)
the adviser has met the requirements of providing a written contract
D - ANSWER✔✔-D
When a corporation files for bankruptcy, heading the priority for payment would be
A)
employees for their wages
, B)
common stockholders
C)
holders of secured debt
D)
taxing authorities - ANSWER✔✔-A
The Uniform Securities Act requires that broker-dealers and investment advisers
maintain certain records relating to their business operations. If the firm wished to
upgrade to a modern system, such as disk storage,
A)
it could do so if the system met certain requirements, including that the information on
the disk could not be altered
B)
the most modern form currently permitted is microfilm or microfiche
C)
it must obtain approval from the Administrator prior to determining its method of
record retention
Questions and Answers
Centripetal Investment Advisers (CIA) has its principal office in State X and is also
registered in States Y and Z. CIA would be considered to be maintaining custody of
client assets in all of the following cases EXCEPT
A)
checks made out to CIA are deposited within 3 business days
B)
CIA's advisory contract calls for the automatic deduction of advisory fees
C)
checks made out to 3rd parties are forwarded within 3 business days
D)
,CIA has a power of attorney granting authority to withdraw funds from the custodian -
ANSWER✔✔-C
An investment adviser may borrow from all of the following clients EXCEPT
A)
a commercial bank in conjunction with a mortgage on the office building from which
the advisory operates
B)
a savings and loan association that has offered to finance new computers for the
adviser's office
C)
a mortgage broker who helped the adviser negotiate mortgage terms for its office
building
D)
a broker-dealer in conjunction with a margin account - ANSWER✔✔-C
Following the rules of the Uniform Securities Act, an investment adviser ensures that all
clients receive a written contract prior to the firm engaging in advisory activities in their
accounts. The contract clearly states all of the account details, including the services to
,be provided, the fees to be charged, and the procedure for handling early terminations.
Because the IA has a tendency to pursue some rather unorthodox methods of analysis,
the contract provides that the clients waive their right to sue in the event that the IA
violates any provision of the USA. Under the NASAA Model Rule on Unethical
Business Practices of Investment Advisers, Investment Adviser Representatives and
Federal Covered Advisers,
A)
the contract is misleading and could lead to action by the Administrator
B)
the contract is only enforceable if signed by the client
C)
the adviser has met the requirements of providing a written contract
D - ANSWER✔✔-D
When a corporation files for bankruptcy, heading the priority for payment would be
A)
employees for their wages
, B)
common stockholders
C)
holders of secured debt
D)
taxing authorities - ANSWER✔✔-A
The Uniform Securities Act requires that broker-dealers and investment advisers
maintain certain records relating to their business operations. If the firm wished to
upgrade to a modern system, such as disk storage,
A)
it could do so if the system met certain requirements, including that the information on
the disk could not be altered
B)
the most modern form currently permitted is microfilm or microfiche
C)
it must obtain approval from the Administrator prior to determining its method of
record retention
