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Question 1 of 10
1. Question
Which is not an example of a legal person?
I. A living human being of legal age.
II. A corporation.
III. A partnership.
IV. An estate.
Correct
The term natural person refers to an individual human being. This term is used to refer to an individual that a layperson would call a person in normal conversation (as opposed to legal language). The term legal person refers to an entity that can enter into a contract and have accounts (investments, savings, etc.). Examples of a legal person include a living human being of legal age, a corporation, a partnership, or an estate. When the term person is used in connection with the Uniform Securities Act, the term should be interpreted as a legal person. The term person should not be interpreted to mean natural person unless the term natural person is specifically used.
Incorrect
The term natural person refers to an individual human being. This term is used to refer to an individual that a layperson would call a person in normal conversation (as opposed to legal language). The term legal person refers to an entity that can enter into a contract and have accounts (investments, savings, etc.). Examples of a legal person include a living human being of legal age, a corporation, a partnership, or an estate. When the term person is used in connection with the Uniform Securities Act, the term should be interpreted as a legal person. The term person should not be interpreted to mean natural person unless the term natural person is specifically used.
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Question 2 of 10
2. Question
Which of the following entities’ operations are regulated by The Uniform Securities Act?
I. Broker-dealers
II. Investment advisers
III. Agents
IV. Investment adviser representatives.
Correct
The Uniform Securities Act regulates many aspects of the securities industry. The Uniform Securities Act specifically regulates the manner in which the following entities may operate: broker-dealers, investment advisers, agents, and investment adviser representatives. For example, the Uniform Securities Act includes a number of registration requirements that apply specifically to broker-dealers, investment advisers, agents, and investment adviser representatives.
Incorrect
The Uniform Securities Act regulates many aspects of the securities industry. The Uniform Securities Act specifically regulates the manner in which the following entities may operate: broker-dealers, investment advisers, agents, and investment adviser representatives. For example, the Uniform Securities Act includes a number of registration requirements that apply specifically to broker-dealers, investment advisers, agents, and investment adviser representatives.
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Question 3 of 10
3. Question
Which is not a characteristic of a legal person or legal entity?
Correct
A legal person may be an individual or an entity such as a legal partnership, an estate, or a corporation. Whether a legal person is an individual or an entity, all legal persons have a number of characteristics in common. These include:
• Legal persons can enter into contracts with other legal persons.
• Legal persons may engage in business transactions.
• Legal persons, whether an individual or an entity, can be charged with and found guilty of criminal activity.
• Legal persons can be sued and may face civil litigation.Incorrect
A legal person may be an individual or an entity such as a legal partnership, an estate, or a corporation. Whether a legal person is an individual or an entity, all legal persons have a number of characteristics in common. These include:
• Legal persons can enter into contracts with other legal persons.
• Legal persons may engage in business transactions.
• Legal persons, whether an individual or an entity, can be charged with and found guilty of criminal activity.
• Legal persons can be sued and may face civil litigation. -
Question 4 of 10
4. Question
Which of the following cannot be referred as broker-dealer?
I. Agent
II. Issuer
III. International banking institutions
IV. Domestic banks or savings institutions
Correct
The term broker-dealer does not include agents (representatives of broker-dealers or the issuer of a security); issuers (an entity that makes its own securities available for purchase); international banking institutions; or any other person or entity specifically excluded by the Uniform Security Act. The term broker- dealer does not generally include domestic banks or savings institutions; however, banks and savings institutions may be designated as broker-dealers depending upon the types of activities and transactions it handles. All persons that fall under the definition of broker- dealer must be registered with the Administrator.
Incorrect
The term broker-dealer does not include agents (representatives of broker-dealers or the issuer of a security); issuers (an entity that makes its own securities available for purchase); international banking institutions; or any other person or entity specifically excluded by the Uniform Security Act. The term broker- dealer does not generally include domestic banks or savings institutions; however, banks and savings institutions may be designated as broker-dealers depending upon the types of activities and transactions it handles. All persons that fall under the definition of broker- dealer must be registered with the Administrator.
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Question 5 of 10
5. Question
Which of the following is an investment adviser?
I. An investment adviser representative.
II. A federal covered investment adviser.
III. A bank or savings institution.
IV. A publisher of a bona fide newspaper, news magazine.
Correct
The definition of investment adviser in the Uniform Securities Act states the term investment adviser does not include:
• An investment adviser representative
• A publisher of a bona fide newspaper, news magazine, or business or financial publication of general and regular circulation
• A federal covered investment adviser
• A bank or savings institutionIncorrect
The definition of investment adviser in the Uniform Securities Act states the term investment adviser does not include:
• An investment adviser representative
• A publisher of a bona fide newspaper, news magazine, or business or financial publication of general and regular circulation
• A federal covered investment adviser
• A bank or savings institution -
Question 6 of 10
6. Question
What stands true for Investment adviser?
I. An investment adviser is an individual or a company that receives compensation to provide advice to others concerning the investment, purchase, or sale of securities.
II. The advice may be provided directly or indirectly.
III. Investment advisers may receive flat fees or fees based on a percentage of managed assets.
IV. All persons that are considered investment advisers are regulated and must be registered with the Administrator.
Correct
An investment adviser is an individual or a company that receives compensation to provide advice to others concerning the investment, purchase, or sale of securities. The advice may be provided directly or indirectly. An example of advice provided directly to a client would be a personal consultation conducted in person or over the phone for a fee. Advice contained in monthly reports that analyzed securities and offered investment advice for a subscription fee would be considered indirect advice. Investment advisers may receive flat fees or fees based on a percentage of managed assets. All persons that are considered investment advisers are regulated and must be registered with the Administrator.
Incorrect
An investment adviser is an individual or a company that receives compensation to provide advice to others concerning the investment, purchase, or sale of securities. The advice may be provided directly or indirectly. An example of advice provided directly to a client would be a personal consultation conducted in person or over the phone for a fee. Advice contained in monthly reports that analyzed securities and offered investment advice for a subscription fee would be considered indirect advice. Investment advisers may receive flat fees or fees based on a percentage of managed assets. All persons that are considered investment advisers are regulated and must be registered with the Administrator.
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Question 7 of 10
7. Question
What are the specific requirements that should be satisfied in order to be classified as an investment adviser under the Uniform Securities Act?
I. The person must offer advice to others concerning securities.
II. The offering of such advice must be part of the person’s continuing line of business.
III. The person offering the advice must receive compensation for the investment advice that he or she provided.
IV. The person offering the advice must not receive compensation for the investment advice that he or she provided.
Correct
In order to be classified as an investment adviser under the Uniform Securities Act, a person must satisfy three specific requirements. First, the person must offer advice to others concerning securities. The advice provided may be in the form of recommendations regarding the purchase and/or sale of securities, or it may be in the form of an evaluation of the value (immediate, short-term, or long-term) of specific securities. Second, the offering of such advice must be part of the person’s continuing line of business. For example, an individual who simply provides an opinion on an investment opportunity during a conversation with an acquaintance may be providing investment advice to the acquaintance, but he or she is not offering that investment advice as part of a line of business. Finally, the person offering the advice must receive compensation for the investment advice that he or she provided.
Incorrect
In order to be classified as an investment adviser under the Uniform Securities Act, a person must satisfy three specific requirements. First, the person must offer advice to others concerning securities. The advice provided may be in the form of recommendations regarding the purchase and/or sale of securities, or it may be in the form of an evaluation of the value (immediate, short-term, or long-term) of specific securities. Second, the offering of such advice must be part of the person’s continuing line of business. For example, an individual who simply provides an opinion on an investment opportunity during a conversation with an acquaintance may be providing investment advice to the acquaintance, but he or she is not offering that investment advice as part of a line of business. Finally, the person offering the advice must receive compensation for the investment advice that he or she provided.
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Question 8 of 10
8. Question
Which are the professions for which individuals may provide such incidental investment advice without being considered an investment adviser?
I. Teacher
II. Attorney
III. Engineer
IV. Accountant
Correct
The Uniform Securities Act recognizes that individuals in certain professions will need to provide incidental investment advice as part of their day-to-day job duties. The Uniform Securities Act identifies four such professions for which individuals may provide such incidental investment advice without being considered an investment adviser. These four professions are teacher, attorney, engineer, and accountant.
Incorrect
The Uniform Securities Act recognizes that individuals in certain professions will need to provide incidental investment advice as part of their day-to-day job duties. The Uniform Securities Act identifies four such professions for which individuals may provide such incidental investment advice without being considered an investment adviser. These four professions are teacher, attorney, engineer, and accountant.
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Question 9 of 10
9. Question
What is the role of an Investment adviser representative?
I. Makes any recommendations or otherwise gives investment advice regarding securities.
II. Manages accounts or portfolios of clients.
III. Determines which recommendation or advice regarding securities should be given.
IV. Provides investment advice or holds herself or himself out as providing investment advice.
Correct
The Uniform Securities Act defines the term investment adviser representative as follows: “Investment adviser representative” means an individual employed by or associated with an investment adviser or federal covered investment adviser and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendation or advice regarding securities should be given, provides investment advice or holds herself or himself out as providing investment advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice, or supervises employees who perform any of the foregoing.
Incorrect
The Uniform Securities Act defines the term investment adviser representative as follows: “Investment adviser representative” means an individual employed by or associated with an investment adviser or federal covered investment adviser and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendation or advice regarding securities should be given, provides investment advice or holds herself or himself out as providing investment advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice, or supervises employees who perform any of the foregoing.
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Question 10 of 10
10. Question
Which of the following is considered as investment adviser representatives?
I. Who performs only clerical or ministerial acts.
II. Is an agent whose performance of investment advice is solely incidental to the individual acting as an agent and who does not receive special compensation for investment advisory services.
III. Is employed by or associated with a federal covered investment adviser.
IV. Is excluded by rule adopted or order issued under Uniform Securities Act.
Correct
Per the Uniform Securities Act, an investment adviser representative is not an individual who:
(A) Performs only clerical or ministerial acts;
(B) Is an agent whose performance of investment advice is solely incidental to the individual acting as an agent and who does not receive special compensation for investment advisory services;
(C) Is employed by or associated with a federal covered investment adviser, unless the individual has a “place of business” in this State as that term is defined by rule adopted under Section 203A of the Investment Advisers Act of 1940
(D) Is excluded by rule adopted or order issued under this [Act].Incorrect
Per the Uniform Securities Act, an investment adviser representative is not an individual who:
(A) Performs only clerical or ministerial acts;
(B) Is an agent whose performance of investment advice is solely incidental to the individual acting as an agent and who does not receive special compensation for investment advisory services;
(C) Is employed by or associated with a federal covered investment adviser, unless the individual has a “place of business” in this State as that term is defined by rule adopted under Section 203A of the Investment Advisers Act of 1940
(D) Is excluded by rule adopted or order issued under this [Act].