Series 63 practice questions with correct answers
Which of the following is NOT an "offer to sell" or "sale" under the
Uniform Securities Act? Correct Answer-A stock dividend distributed to
shareholders
Which of the following is NOT an exempt security under the Uniform
Securities Act? Correct Answer-Corporate bond trading on the OTC
market
If an Investment Adviser is found to be in violation of the Act, the client
is entitled to I. Recover the fees paid for the advice as well as reasonable
court costs and attorney fees. II. Recover any investment losses, less any
income received due to the advice. III. Recover any investment losses
and retain any income received due to the advice. IV. Recover only the
fees paid and any net losses realized. Correct Answer-I. Recover the fees
paid for the advice as well as reasonable court costs and attorney fees. II.
Recover any investment losses, less any income received due to the
advice.
Which of the following choices best fits the definition of a tax sheltered
investment issue? Correct Answer-Limited partnership agreement
Limited partnership offerings such as certificates of interests in mining,
oil, or gas drilling programs, real estate cooperatives, and condominiums
are good examples of tax sheltered investment issue
Which of the following are defined as a sale or offer to sell a security? I.
The gift of an assessable security; II. Stock dividends paid to
,shareholders; III. A security interest of a borrower pledged as collateral
for a loan. IV. A stock bonus given in conjunction with a security
purchase Correct Answer-I. The gift of an assessable security; I
IV. A stock bonus given in conjunction with a security purchase
Under the Uniform Securities Act, the statute of limitations for civil
suits that address violations of registration requirements is Correct
Answer-3 years after the occurrence or 2 years after the discovery,
whichever comes first.
An investment adviser is NOT required to deliver a brochure when
providing Correct Answer-Impersonal investment advice for less than
$500 per year.
A CPA for XYZ Corp. knew in advance that XYZ would report a
quarterly earnings loss. Based on this knowledge and prior to the release
of the company's quarterly earnings report, the CPA sold short a large
block of XYZ stock which drove down the price of the stock. Another
investor who had entered an order to sell XYZ at the market around the
same time sold at a very low price due to CPA's block trade. What legal
recourse does the investor have against this CPA? Correct Answer-File a
lawsuit for damages
Beverly, a Seattle resident, winters in Tucson. Which of the following is
true? I. Beverly's broker/dealer may service Beverly without registering
in Arizona. II. Beverly's broker/dealer may not solicit new Arizona
business without registering. III. Only Beverly's agent must register in
,Arizona. IV. Beverly's broker/dealer may open a Tucson office to assist
only Beverly without registering in Arizona. Correct Answer-I.
Beverly's broker/dealer may service Beverly without registering in
Arizona. II. Beverly's broker/dealer may not solicit new Arizona
business without registering.
Which of the following are exempt from registration as an agent? I. An
individual who represents issuers in the trading of commercial paper; II.
Someone who represents a broker/dealer in the sale of an exempt
security; III. A person who represents issuers in the sale of mortgage
bonds to the public; IV. Someone who represents issuers in private
placements Correct Answer-? I. An individual who represents issuers in
the trading of commercial paper
IV. Someone who represents issuers in private placements
According to the NASAA Dishonest and Unethical Business Practices
for broker/deals and agents, which of the following actions would be
considered unethical prohibited practices? I. An agent borrows money
from a client to make a short-term trade in his own account. II. An agent
accepts a trade order from a client's brother without written permission
from the client. III. An agent who has discretion over a client's account
waiting to enter the client's sell order because he thinks he will get a
better price execution later in the day. IV. Discussing with the client the
risk involved with certain transactions that the client is considering
Correct Answer-I. An agent borrows money from a client to make a
short-term trade in his own account. II. An agent accepts a trade order
from a client's brother without written permission from the client
, When must an adviser become federally registered? Correct Answer-
Advisers must be registered when assets exceed a certain amount.
Currently, advisers with assets in excess of $110 million are required to
register at the federal level. Federal registration is the adviser's option
when assets are between $100 million and $110 million.
Which of the following is NOT true concerning required financial
reporting by broker/dealers and investment advisers? Correct Answer-
All financial reports submitted to the Administrator must be audited by
an independent third party.
Which of the following are considered market manipulation? I. Matched
orders; II. Wash trades; III. Stopping stock; IV. Wash sales Correct
Answer-? I. Matched orders; II. Wash trades;
Hunter Investment Advisers is experiencing financial difficulty. Which
of the following clients are they required to notify pursuant to the USA?
Correct Answer-A client who has prepaid $500 for the next 6 months
The right of rescission under the civil liabilities provisions of the Act
allows a customer to recover Correct Answer-The cost of the securities
plus interest less any income received from the security.
A security in which the payment of principal, interest, and/or dividends
is assured is called a(an) Correct Answer-Guaranteed security.
Which of the following is NOT an "offer to sell" or "sale" under the
Uniform Securities Act? Correct Answer-A stock dividend distributed to
shareholders
Which of the following is NOT an exempt security under the Uniform
Securities Act? Correct Answer-Corporate bond trading on the OTC
market
If an Investment Adviser is found to be in violation of the Act, the client
is entitled to I. Recover the fees paid for the advice as well as reasonable
court costs and attorney fees. II. Recover any investment losses, less any
income received due to the advice. III. Recover any investment losses
and retain any income received due to the advice. IV. Recover only the
fees paid and any net losses realized. Correct Answer-I. Recover the fees
paid for the advice as well as reasonable court costs and attorney fees. II.
Recover any investment losses, less any income received due to the
advice.
Which of the following choices best fits the definition of a tax sheltered
investment issue? Correct Answer-Limited partnership agreement
Limited partnership offerings such as certificates of interests in mining,
oil, or gas drilling programs, real estate cooperatives, and condominiums
are good examples of tax sheltered investment issue
Which of the following are defined as a sale or offer to sell a security? I.
The gift of an assessable security; II. Stock dividends paid to
,shareholders; III. A security interest of a borrower pledged as collateral
for a loan. IV. A stock bonus given in conjunction with a security
purchase Correct Answer-I. The gift of an assessable security; I
IV. A stock bonus given in conjunction with a security purchase
Under the Uniform Securities Act, the statute of limitations for civil
suits that address violations of registration requirements is Correct
Answer-3 years after the occurrence or 2 years after the discovery,
whichever comes first.
An investment adviser is NOT required to deliver a brochure when
providing Correct Answer-Impersonal investment advice for less than
$500 per year.
A CPA for XYZ Corp. knew in advance that XYZ would report a
quarterly earnings loss. Based on this knowledge and prior to the release
of the company's quarterly earnings report, the CPA sold short a large
block of XYZ stock which drove down the price of the stock. Another
investor who had entered an order to sell XYZ at the market around the
same time sold at a very low price due to CPA's block trade. What legal
recourse does the investor have against this CPA? Correct Answer-File a
lawsuit for damages
Beverly, a Seattle resident, winters in Tucson. Which of the following is
true? I. Beverly's broker/dealer may service Beverly without registering
in Arizona. II. Beverly's broker/dealer may not solicit new Arizona
business without registering. III. Only Beverly's agent must register in
,Arizona. IV. Beverly's broker/dealer may open a Tucson office to assist
only Beverly without registering in Arizona. Correct Answer-I.
Beverly's broker/dealer may service Beverly without registering in
Arizona. II. Beverly's broker/dealer may not solicit new Arizona
business without registering.
Which of the following are exempt from registration as an agent? I. An
individual who represents issuers in the trading of commercial paper; II.
Someone who represents a broker/dealer in the sale of an exempt
security; III. A person who represents issuers in the sale of mortgage
bonds to the public; IV. Someone who represents issuers in private
placements Correct Answer-? I. An individual who represents issuers in
the trading of commercial paper
IV. Someone who represents issuers in private placements
According to the NASAA Dishonest and Unethical Business Practices
for broker/deals and agents, which of the following actions would be
considered unethical prohibited practices? I. An agent borrows money
from a client to make a short-term trade in his own account. II. An agent
accepts a trade order from a client's brother without written permission
from the client. III. An agent who has discretion over a client's account
waiting to enter the client's sell order because he thinks he will get a
better price execution later in the day. IV. Discussing with the client the
risk involved with certain transactions that the client is considering
Correct Answer-I. An agent borrows money from a client to make a
short-term trade in his own account. II. An agent accepts a trade order
from a client's brother without written permission from the client
, When must an adviser become federally registered? Correct Answer-
Advisers must be registered when assets exceed a certain amount.
Currently, advisers with assets in excess of $110 million are required to
register at the federal level. Federal registration is the adviser's option
when assets are between $100 million and $110 million.
Which of the following is NOT true concerning required financial
reporting by broker/dealers and investment advisers? Correct Answer-
All financial reports submitted to the Administrator must be audited by
an independent third party.
Which of the following are considered market manipulation? I. Matched
orders; II. Wash trades; III. Stopping stock; IV. Wash sales Correct
Answer-? I. Matched orders; II. Wash trades;
Hunter Investment Advisers is experiencing financial difficulty. Which
of the following clients are they required to notify pursuant to the USA?
Correct Answer-A client who has prepaid $500 for the next 6 months
The right of rescission under the civil liabilities provisions of the Act
allows a customer to recover Correct Answer-The cost of the securities
plus interest less any income received from the security.
A security in which the payment of principal, interest, and/or dividends
is assured is called a(an) Correct Answer-Guaranteed security.
