FINRA Series 63 Unit 2 UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Investment of Money, Common Enterprise, Expectation of Profits, Derived from Efforts of a
Person (other than investor) - CORRECT ANSWER - For an instrument to be a security,
the court held, it must constitute...
Common Enterprise - CORRECT ANSWER - An enterprise in which the fortunes of the
investor are interwoven with those of either the person offering the investment, a third party, or
other investors
Note, Stock, Treasury Note, Bond, Debenture, Evidence of Indebtedness, Certificate of Interest
or Participation in a Profit-Sharing Agreement, Collateral Trust Certificate, Preorganization
Certificate or Subscription, Transferable Share, Investment Contract, Voting Trust Certificate,
Certificate of Deposit, Certificate of Interest or Participation in an Oil, Gas, or Mining Title,
Puts, Calls, Straddles, Options, or Privilege on Security, Interest or Instrument Commonly
Known as Security, Certificate of Interest or Participation in Receipts of, Guarantees of, or
Warrants or Rights to Subscribe to or Purchase Any of the Above - CORRECT
ANSWER - Under the Uniform Securities Act, "security" means any...
An Insurance or Endowment Policy or Annuity Contract Under Which an Insurance Company
Promises to Pay a Fixed Sum of Money Either in a Lump Sum or Periodically, Interest in
Retirement Plan, Collectibles, Commodities, Condominiums, Currency - CORRECT
ANSWER - Items not securities under the Uniform Securities Act
Nonsecurity Investments - CORRECT ANSWER - Collectibles, fixed annuities, precious
metals, grains, futures, real estate, and currencies are examples of...
Exempt - CORRECT ANSWER - Not subject to registration
Issuer - CORRECT ANSWER - Any person who issues (distributes) or proposes to issue a
security
, Issuer Transaction - CORRECT ANSWER - A transaction in which the proceeds of the
sale go to the issuer.
Primary Offering - CORRECT ANSWER - An issuer transaction involving new securities
Initial Public Offering (IPO) - CORRECT ANSWER - The first time an issuer distributes
securities to the public
Subsequent Public Offering (SPO) - CORRECT ANSWER - Any subsequent issuance of
new shares to the public
Nonissuer Transaction (Secondary Transactions, Transactions Between Investors) - CORRECT
ANSWER - A transaction in which the proceeds of the sale do not go, either directly or
indirectly, to the entity that originally offered the securities to the public
Registered Under the Act (Uniform securities act), Security or Transaction Exempted from
Registration, Federal Covered Security - CORRECT ANSWER - It is unlawful for any
person to offer or sell any security in the state unless...
Uniform Securities Act (USA) - CORRECT ANSWER - Template legislation written by
the NCCUSL to serve as the basis for a state's securities legislation if the state wished to adopt it.
It regulates securities, persons (broker-dealer and their agents and investment advisers and their
representatives), and transactions in the securities markets within the state. All but a few of the
states have adopted this in some form.
National Securities Markets Improvement Act of 1996 (NSMIA) - CORRECT ANSWER -
This law effectively divided the responsibility for regulating investment advisers between the
states and the SEC by bifurcating (splitting in two) the regulation of investment advisers and
creating the category of registration known as a federal covered adviser.
Federal Covered Security - CORRECT ANSWER - A security that was exempt from
registration on the state level
ACTUAL Exam Questions and CORRECT
Answers
Investment of Money, Common Enterprise, Expectation of Profits, Derived from Efforts of a
Person (other than investor) - CORRECT ANSWER - For an instrument to be a security,
the court held, it must constitute...
Common Enterprise - CORRECT ANSWER - An enterprise in which the fortunes of the
investor are interwoven with those of either the person offering the investment, a third party, or
other investors
Note, Stock, Treasury Note, Bond, Debenture, Evidence of Indebtedness, Certificate of Interest
or Participation in a Profit-Sharing Agreement, Collateral Trust Certificate, Preorganization
Certificate or Subscription, Transferable Share, Investment Contract, Voting Trust Certificate,
Certificate of Deposit, Certificate of Interest or Participation in an Oil, Gas, or Mining Title,
Puts, Calls, Straddles, Options, or Privilege on Security, Interest or Instrument Commonly
Known as Security, Certificate of Interest or Participation in Receipts of, Guarantees of, or
Warrants or Rights to Subscribe to or Purchase Any of the Above - CORRECT
ANSWER - Under the Uniform Securities Act, "security" means any...
An Insurance or Endowment Policy or Annuity Contract Under Which an Insurance Company
Promises to Pay a Fixed Sum of Money Either in a Lump Sum or Periodically, Interest in
Retirement Plan, Collectibles, Commodities, Condominiums, Currency - CORRECT
ANSWER - Items not securities under the Uniform Securities Act
Nonsecurity Investments - CORRECT ANSWER - Collectibles, fixed annuities, precious
metals, grains, futures, real estate, and currencies are examples of...
Exempt - CORRECT ANSWER - Not subject to registration
Issuer - CORRECT ANSWER - Any person who issues (distributes) or proposes to issue a
security
, Issuer Transaction - CORRECT ANSWER - A transaction in which the proceeds of the
sale go to the issuer.
Primary Offering - CORRECT ANSWER - An issuer transaction involving new securities
Initial Public Offering (IPO) - CORRECT ANSWER - The first time an issuer distributes
securities to the public
Subsequent Public Offering (SPO) - CORRECT ANSWER - Any subsequent issuance of
new shares to the public
Nonissuer Transaction (Secondary Transactions, Transactions Between Investors) - CORRECT
ANSWER - A transaction in which the proceeds of the sale do not go, either directly or
indirectly, to the entity that originally offered the securities to the public
Registered Under the Act (Uniform securities act), Security or Transaction Exempted from
Registration, Federal Covered Security - CORRECT ANSWER - It is unlawful for any
person to offer or sell any security in the state unless...
Uniform Securities Act (USA) - CORRECT ANSWER - Template legislation written by
the NCCUSL to serve as the basis for a state's securities legislation if the state wished to adopt it.
It regulates securities, persons (broker-dealer and their agents and investment advisers and their
representatives), and transactions in the securities markets within the state. All but a few of the
states have adopted this in some form.
National Securities Markets Improvement Act of 1996 (NSMIA) - CORRECT ANSWER -
This law effectively divided the responsibility for regulating investment advisers between the
states and the SEC by bifurcating (splitting in two) the regulation of investment advisers and
creating the category of registration known as a federal covered adviser.
Federal Covered Security - CORRECT ANSWER - A security that was exempt from
registration on the state level
