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Question 1 of 10
1. Question
Which of these is Asysytematic Risk?
I. Interest Rate Risk
II. Market Risk
III.Liquidity Risk
IV. Inflation RiskCorrect
The four most common types of unsystematic risk are:
• Business Risk
• Regulatory Risk
• Political Risk
• Liquidity RiskIncorrect
The four most common types of unsystematic risk are:
• Business Risk
• Regulatory Risk
• Political Risk
• Liquidity Risk -
Question 2 of 10
2. Question
Which of these constitutes Role of the Administrator under the Uniform Securities Act?
I. Handling the registrations and licensing in the securities industry
II. Protecting investors and ensuring that the public interest is served
III. Issuing orders that may deny an applicant’s registration during only the application process
IV. Rejecting an applicant based on a felony committed in another stateCorrect
Incorrect
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Question 3 of 10
3. Question
Which of these statements is true?
I. States have to regulate the securities covered by SEC.
II. Only 1 state administrator can have jurisdiction over a security.
III. Even transfer of assessable stock as a gift is a regulated transaction
IV. An assessable stock is offered at a higher value in exchange of liability.Correct
Because the transfer of an assessable stock involves the transfer of the stock’s associated liability, the transfer of assessable stock is a regulated transaction even if the stock is transferred as a gift. Such transactions fall under the jurisdiction of the Administrator. Assessable stocks no longer exist. Gifts involving non- assessable stocks are handled differently.
Incorrect
Because the transfer of an assessable stock involves the transfer of the stock’s associated liability, the transfer of assessable stock is a regulated transaction even if the stock is transferred as a gift. Such transactions fall under the jurisdiction of the Administrator. Assessable stocks no longer exist. Gifts involving non- assessable stocks are handled differently.
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Question 4 of 10
4. Question
After registering a security with the SEC
I. Brokers can solicit indication of interest from their clients
II. Issuers can begin sale immediately
III. Sales materials can be provided to potential investors immediately
IV. No actual deals or plans can be made till the waiting period is overCorrect
Instead, issuers must wait for a period of at least twenty days before engaging in any sales activity for the recently registered security. During this waiting period, broker- dealers are permitted to canvas their clients to solicit indications of interest. An indication of interest is an indication that the client may be interested in investing in the security once it is available; however, no sales material (literature, cost information, etc.) may be provided to potential investors during the waiting period. Until the time that sales of the security may begin, no actual deals involving the security may be made or planned.Investors cannot be given the opportunity to purchase the security, or be made aware of the offering price of the security, until the date the security becomes available.
Incorrect
Instead, issuers must wait for a period of at least twenty days before engaging in any sales activity for the recently registered security. During this waiting period, broker- dealers are permitted to canvas their clients to solicit indications of interest. An indication of interest is an indication that the client may be interested in investing in the security once it is available; however, no sales material (literature, cost information, etc.) may be provided to potential investors during the waiting period. Until the time that sales of the security may begin, no actual deals involving the security may be made or planned.Investors cannot be given the opportunity to purchase the security, or be made aware of the offering price of the security, until the date the security becomes available.
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Question 5 of 10
5. Question
Which of these statements are true?
I. The National Securities Markets Improvements Act of 1996 established a division of responsibility between state regulators and federal regulators
II. Investment advisers that are not required to register with the SEC have to register with a state Administrator
III. If an investment advisory firm is federally covered, all of the its advisors are automatically registered with the SEC
IV. Securities Investor Protection Corporation is a federal regulatory body that provides nationwide protection to the clients of broker-dealersCorrect
An investment advisory firm may be a federally covered investment adviser
(registered with the SEC), and yet, the firm’s investment adviser representatives may still need to be registered with the state Administrator. The fact that an investment adviser is federally regulated does not mean that its representatives are federally regulated as well.Incorrect
An investment advisory firm may be a federally covered investment adviser
(registered with the SEC), and yet, the firm’s investment adviser representatives may still need to be registered with the state Administrator. The fact that an investment adviser is federally regulated does not mean that its representatives are federally regulated as well. -
Question 6 of 10
6. Question
Which of these are investment advisers?
I. Broker-dealers who provide advice not as a part of their job
II. Investment advisor representatives
III. Publisher whose regular job is to provide advice regarding investment
IV. A Financial Planner who provides advice for compensationCorrect
The term includes a financial planner or other person that, as an integral component of other financially related services, provides investment advice to others for compensation as part of a business or that holds itself out as providing investment advice to others for compensation.
Incorrect
The term includes a financial planner or other person that, as an integral component of other financially related services, provides investment advice to others for compensation as part of a business or that holds itself out as providing investment advice to others for compensation.
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Question 7 of 10
7. Question
Which of these entities are a part of financial institutions?
I. Insurance Companies
II. Profit Sharing Trust
III. Pension Trust
IV. Trust CompaniesCorrect
Banks and savings and loan institutions are widely understood to be financial institutions; however, these are not the only entities that qualify as financial institutions. Other types of financial institutions include entities such as insurance companies, pension trusts, trust companies, institutional buyers, and profit-sharing trusts. The Uniform Securities Act excludes all of these financial institutions from the definition of broker-dealer. As such, these companies do not fall under the jurisdiction of the Administrator.
Incorrect
Banks and savings and loan institutions are widely understood to be financial institutions; however, these are not the only entities that qualify as financial institutions. Other types of financial institutions include entities such as insurance companies, pension trusts, trust companies, institutional buyers, and profit-sharing trusts. The Uniform Securities Act excludes all of these financial institutions from the definition of broker-dealer. As such, these companies do not fall under the jurisdiction of the Administrator.
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Question 8 of 10
8. Question
Which of the statement is false in regards of an agent?
I. An individual who is a broker dealer.
II. Representer of a broker dealer handling security sales.
III. Agents are also referred as sales representatives.
IV. Representative for an issuer of a security handling the purchase of securities.Correct
An agent is an individual who is not a broker-dealer, but who acts as a representative of a broker-dealer to handle security purchases and/or security sales. An agent can also be arepresentative for an issuer of a security who handles the purchase or sale of that issuer’s securities. An investment adviser representative is an individual who is not an investment adviser, but who acts as a representative of an investment adviser. Investment adviser representatives include individuals who provide advice regarding securities, handle client
accounts and/or portfolios, and/or receive compensation for seeking or obtaining clients for an investment adviser. Investment advisers also include individuals who supervise employees that perform the activities discussed above. Clerical personnel in an investment adviser firm are not considered investment adviser representatives. Agents are sometimes called registered representatives or sales representatives.
Incorrect
An agent is an individual who is not a broker-dealer, but who acts as a representative of a broker-dealer to handle security purchases and/or security sales. An agent can also be arepresentative for an issuer of a security who handles the purchase or sale of that issuer’s securities. An investment adviser representative is an individual who is not an investment adviser, but who acts as a representative of an investment adviser. Investment adviser representatives include individuals who provide advice regarding securities, handle client
accounts and/or portfolios, and/or receive compensation for seeking or obtaining clients for an investment adviser. Investment advisers also include individuals who supervise employees that perform the activities discussed above. Clerical personnel in an investment adviser firm are not considered investment adviser representatives. Agents are sometimes called registered representatives or sales representatives.
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Question 9 of 10
9. Question
Which of these statements regarding Currency & Foreign Transactions Act are true?
I. Its a federal legislation targeting broker-dealers and financial dealers who are aiding clients attempting to launder money, evade taxes.
II. There goal is to detect current violations and to prevent future illegal activity.
III.Financial institutions need to report daily in case of any transactions above 10000 dollars.
IV. BSA is a separate entity than currency & foreign transactions act.Correct
The BSA is federal legislation that targets broker-dealers and financial dealers that may be aiding clients attempting to launder money, evade taxes, or engage in other criminal behavior. The BSA also instituted an obligation for financial institutions and broker-dealers to report any aggregate daily cash transaction in excess of ten thousand dollars. The goal of the BSA is to detect current violations and to prevent future illegal activity.
Incorrect
The BSA is federal legislation that targets broker-dealers and financial dealers that may be aiding clients attempting to launder money, evade taxes, or engage in other criminal behavior. The BSA also instituted an obligation for financial institutions and broker-dealers to report any aggregate daily cash transaction in excess of ten thousand dollars. The goal of the BSA is to detect current violations and to prevent future illegal activity.
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Question 10 of 10
10. Question
Which statement regarding National Securities Markets Improvements Act of 1996 is true?
I. NSMIA completely eliminate the relationship between a federally covered investment adviser and the state Administrator for the states.
II. NSMIA does not completely eliminate the relationship between a federally covered investment adviser and the state Administrator for the states.
III. All broker-dealers and agents must be registered with the Administrator in order to conduct business.
IV. Investment adviser representing federally covered investment advisers can surpass the registration with the administration.Correct
The National Securities Markets Improvements Act of 1996 (NSMIA) exempts persons that must register as investment advisers with the Securities Exchange Commission (SEC) from the requirement to register as investment advisers with any state Administrators.However, it is important to note that the NSMIA does not completely eliminate the relationship between a federally covered investment adviser and the state Administrator for the states in which the federally covered investment adviser operates.
Incorrect
The National Securities Markets Improvements Act of 1996 (NSMIA) exempts persons that must register as investment advisers with the Securities Exchange Commission (SEC) from the requirement to register as investment advisers with any state Administrators.However, it is important to note that the NSMIA does not completely eliminate the relationship between a federally covered investment adviser and the state Administrator for the states in which the federally covered investment adviser operates.