STC Final Exam 1 with verified answers
graded A+ updated
which of the following disclosures is a bd required to make when an account is opened - correct
answer ✔✔the need for the customer to identify a trusted contact person
an insurance agent is soliciting for an IA. The agent receives 25 bp for every client she refers to
the advisory firm. Under the USA, the insurance agent - correct answer ✔✔may need to register
as an RIA
a customer of a bd has purchased stock in a margin account. The customers exposure in the
account is 50%. If the stock falls by 10%, what's the customers percentage of loss in the account
- correct answer ✔✔20% (2*10%)
advertisements that are distributed by bd must be maintained for - correct answer ✔✔3 years
in total, but in an easily accessible location for the first 2 years
In order to effect a private securities transaction, a bd - correct answer ✔✔must receive
permission from his bd to effect the transaction
Jeff white and mary johnson have formed a corporation to start a new bd. They are the sole
shareholders. which of the following grounds could the administrator use as a basis for denying
their application - correct answer ✔✔eight years ago, Jeff pled guilty to one felony count of tax
invasion
offering which of the following goods and services would be a violation of soft dollar practices if
the bd provides them to the adviser in exchange for executing trades - correct answer
✔✔assistance concerning its compliance responsibilities
, which of the following activities does not meet the definition of an exempt transaction under
the USA - correct answer ✔✔an agent sells units in a candian limited partnership to several of
her clients
spoofing at multiple different price points is referred to as - correct answer ✔✔layering
a customers investment objectives are capital preservation and current income. the agent
recommends that the client purchase sp 500 index fund. the agent then advises the client to sell
shares in the fund every 2 weeks to generate income. according to NASAAs statement of policy
on dishonest and unethical business practices of bd and agents, the agents recommendations
represent - correct answer ✔✔unsuitability
after an investigation, the administrator of state z has discovered that, a few months ago, an
agent of a bd left her position and found another job working in a retail store. whats the most
likely action the administrator will take regarding the agents registration - correct answer
✔✔cancel the agents registration (revoke is before acceptance, cancel is after)
On Monday, a client emailed her agent and asked him to buy 100 shares of abc stock whenever
he believes its the right time. Is the clients request in violation of the USA - correct answer
✔✔no, but the order must be executed on the day its entered or canceled at the end of the day
an investment company has no front end load, no back end load, and a 12b-1 that equals .50%
of the funds AUM. which of the following statements about the funds fees is true - correct
answer ✔✔the 12b-1 fee exceeds the max percentage to qualify the investment company as a
no load fund (cannot exceed .25%)
An agent has just received an unsolicited order from a customer. The customer wants to
purchase a large amount of a speculative stock. Although the customer has the financial
resources to bear the risks of this investment, the agent does not think it fits the client's
investment objectives. The agent may take all of the following actions, EXCEPT - correct answer
✔✔hold the customers order until the agent has the opportunity to confirm the clients
understanding of the security
graded A+ updated
which of the following disclosures is a bd required to make when an account is opened - correct
answer ✔✔the need for the customer to identify a trusted contact person
an insurance agent is soliciting for an IA. The agent receives 25 bp for every client she refers to
the advisory firm. Under the USA, the insurance agent - correct answer ✔✔may need to register
as an RIA
a customer of a bd has purchased stock in a margin account. The customers exposure in the
account is 50%. If the stock falls by 10%, what's the customers percentage of loss in the account
- correct answer ✔✔20% (2*10%)
advertisements that are distributed by bd must be maintained for - correct answer ✔✔3 years
in total, but in an easily accessible location for the first 2 years
In order to effect a private securities transaction, a bd - correct answer ✔✔must receive
permission from his bd to effect the transaction
Jeff white and mary johnson have formed a corporation to start a new bd. They are the sole
shareholders. which of the following grounds could the administrator use as a basis for denying
their application - correct answer ✔✔eight years ago, Jeff pled guilty to one felony count of tax
invasion
offering which of the following goods and services would be a violation of soft dollar practices if
the bd provides them to the adviser in exchange for executing trades - correct answer
✔✔assistance concerning its compliance responsibilities
, which of the following activities does not meet the definition of an exempt transaction under
the USA - correct answer ✔✔an agent sells units in a candian limited partnership to several of
her clients
spoofing at multiple different price points is referred to as - correct answer ✔✔layering
a customers investment objectives are capital preservation and current income. the agent
recommends that the client purchase sp 500 index fund. the agent then advises the client to sell
shares in the fund every 2 weeks to generate income. according to NASAAs statement of policy
on dishonest and unethical business practices of bd and agents, the agents recommendations
represent - correct answer ✔✔unsuitability
after an investigation, the administrator of state z has discovered that, a few months ago, an
agent of a bd left her position and found another job working in a retail store. whats the most
likely action the administrator will take regarding the agents registration - correct answer
✔✔cancel the agents registration (revoke is before acceptance, cancel is after)
On Monday, a client emailed her agent and asked him to buy 100 shares of abc stock whenever
he believes its the right time. Is the clients request in violation of the USA - correct answer
✔✔no, but the order must be executed on the day its entered or canceled at the end of the day
an investment company has no front end load, no back end load, and a 12b-1 that equals .50%
of the funds AUM. which of the following statements about the funds fees is true - correct
answer ✔✔the 12b-1 fee exceeds the max percentage to qualify the investment company as a
no load fund (cannot exceed .25%)
An agent has just received an unsolicited order from a customer. The customer wants to
purchase a large amount of a speculative stock. Although the customer has the financial
resources to bear the risks of this investment, the agent does not think it fits the client's
investment objectives. The agent may take all of the following actions, EXCEPT - correct answer
✔✔hold the customers order until the agent has the opportunity to confirm the clients
understanding of the security
