Nevada Investment Adviser
Representative Licensing Exam Practice
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following best describes the primary function of an
investment adviser?
A. Execute securities trades for clients
B. Provide financial planning and investment advice for compensation
C. Act as a bank custodian for client assets
D. Underwrite new securities issues
B. Provide financial planning and investment advice for
compensation
Rationale: Investment advisers are primarily engaged in providing
advice or guidance regarding securities to clients for compensation,
rather than simply executing trades or underwriting securities.
2. Under the Investment Advisers Act of 1940, which of the following
persons is required to register with the SEC?
A. Advisers managing less than $25 million in assets
B. Advisers managing hedge funds exclusively for family members
C. Advisers managing $110 million in assets
D. Advisers providing advice only to insurance companies
C. Advisers managing $110 million in assets
Rationale: Advisers managing $100 million or more in assets under
management are required to register with the SEC, while smaller
advisers may register with state authorities.
,3. Which form is used by investment advisers to register with the SEC?
A. Form ADV
B. Form U4
C. Form 10-K
D. Form 13F
A. Form ADV
Rationale: Form ADV is the primary registration form used by
investment advisers to disclose information about their business,
clients, fees, and potential conflicts of interest.
4. A fiduciary duty requires that an investment adviser:
A. Achieve the highest possible return for all clients
B. Act in the best interests of clients with loyalty and care
C. Avoid taxes on client accounts
D. Execute trades as quickly as possible
B. Act in the best interests of clients with loyalty and care
Rationale: Fiduciary duty obligates investment advisers to put their
clients’ interests above their own and to exercise care, skill, and
diligence in providing advice.
5. Which of the following constitutes a conflict of interest for an
investment adviser?
A. Charging a flat fee for financial planning
B. Recommending proprietary mutual funds for a higher advisory fee
C. Using only no-load mutual funds
D. Advising clients to diversify investments
B. Recommending proprietary mutual funds for a higher advisory fee
Rationale: Recommending products that provide a higher
compensation to the adviser can create a conflict of interest that
must be disclosed to the client.
6. Which of the following is considered an investment adviser
representative under Nevada law?
A. An individual providing advice on real estate investments
exclusively
B. An individual employed by a registered investment adviser and
providing securities advice
C. A stockbroker executing trades for clients
, D. A bank teller providing general account services
B. An individual employed by a registered investment adviser and
providing securities advice
Rationale: An investment adviser representative is someone
associated with a registered adviser who provides advice or
supervises clients regarding securities.
7. In Nevada, which entity regulates state-registered investment
advisers?
A. SEC
B. FINRA
C. Nevada Division of Securities
D. Federal Reserve
C. Nevada Division of Securities
Rationale: State-registered investment advisers in Nevada are
regulated by the Nevada Division of Securities, which oversees
compliance with state securities laws.
8. An adviser recommends a security to a client without disclosing that
the adviser receives a commission from the security’s issuer. This is:
A. Permissible if the client signs a disclosure waiver
B. A violation of fiduciary duty and securities law
C. Allowed only for mutual funds
D. Acceptable under state law but not federal law
B. A violation of fiduciary duty and securities law
Rationale: Failure to disclose material conflicts of interest, such as
receiving commissions, violates fiduciary duties and securities
regulations.
9. Which of the following is NOT considered a security under the Uniform
Securities Act?
A. Corporate stock
B. Treasury bonds
C. Fixed annuities
D. Mutual fund shares
C. Fixed annuities
Rationale: Fixed annuities are insurance contracts, not securities, and
Representative Licensing Exam Practice
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following best describes the primary function of an
investment adviser?
A. Execute securities trades for clients
B. Provide financial planning and investment advice for compensation
C. Act as a bank custodian for client assets
D. Underwrite new securities issues
B. Provide financial planning and investment advice for
compensation
Rationale: Investment advisers are primarily engaged in providing
advice or guidance regarding securities to clients for compensation,
rather than simply executing trades or underwriting securities.
2. Under the Investment Advisers Act of 1940, which of the following
persons is required to register with the SEC?
A. Advisers managing less than $25 million in assets
B. Advisers managing hedge funds exclusively for family members
C. Advisers managing $110 million in assets
D. Advisers providing advice only to insurance companies
C. Advisers managing $110 million in assets
Rationale: Advisers managing $100 million or more in assets under
management are required to register with the SEC, while smaller
advisers may register with state authorities.
,3. Which form is used by investment advisers to register with the SEC?
A. Form ADV
B. Form U4
C. Form 10-K
D. Form 13F
A. Form ADV
Rationale: Form ADV is the primary registration form used by
investment advisers to disclose information about their business,
clients, fees, and potential conflicts of interest.
4. A fiduciary duty requires that an investment adviser:
A. Achieve the highest possible return for all clients
B. Act in the best interests of clients with loyalty and care
C. Avoid taxes on client accounts
D. Execute trades as quickly as possible
B. Act in the best interests of clients with loyalty and care
Rationale: Fiduciary duty obligates investment advisers to put their
clients’ interests above their own and to exercise care, skill, and
diligence in providing advice.
5. Which of the following constitutes a conflict of interest for an
investment adviser?
A. Charging a flat fee for financial planning
B. Recommending proprietary mutual funds for a higher advisory fee
C. Using only no-load mutual funds
D. Advising clients to diversify investments
B. Recommending proprietary mutual funds for a higher advisory fee
Rationale: Recommending products that provide a higher
compensation to the adviser can create a conflict of interest that
must be disclosed to the client.
6. Which of the following is considered an investment adviser
representative under Nevada law?
A. An individual providing advice on real estate investments
exclusively
B. An individual employed by a registered investment adviser and
providing securities advice
C. A stockbroker executing trades for clients
, D. A bank teller providing general account services
B. An individual employed by a registered investment adviser and
providing securities advice
Rationale: An investment adviser representative is someone
associated with a registered adviser who provides advice or
supervises clients regarding securities.
7. In Nevada, which entity regulates state-registered investment
advisers?
A. SEC
B. FINRA
C. Nevada Division of Securities
D. Federal Reserve
C. Nevada Division of Securities
Rationale: State-registered investment advisers in Nevada are
regulated by the Nevada Division of Securities, which oversees
compliance with state securities laws.
8. An adviser recommends a security to a client without disclosing that
the adviser receives a commission from the security’s issuer. This is:
A. Permissible if the client signs a disclosure waiver
B. A violation of fiduciary duty and securities law
C. Allowed only for mutual funds
D. Acceptable under state law but not federal law
B. A violation of fiduciary duty and securities law
Rationale: Failure to disclose material conflicts of interest, such as
receiving commissions, violates fiduciary duties and securities
regulations.
9. Which of the following is NOT considered a security under the Uniform
Securities Act?
A. Corporate stock
B. Treasury bonds
C. Fixed annuities
D. Mutual fund shares
C. Fixed annuities
Rationale: Fixed annuities are insurance contracts, not securities, and
