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Question 1 of 10
1. Question
Which of the following is false about the Uniform Securities Act?
Correct
The Uniform Securities Act is a legislative attempt to bring uniformity to state securities laws that are widely varied, also known as blue-sky laws. The Uniform Securities Act, or USA, outlines civil and criminal liabilities for abuse of the uniform laws. Each state’s securities laws are overseen by an administrator. The blue-sky laws not only bring uniformity to multiple states’ laws but also provides for consumer investor protection.
Incorrect
The Uniform Securities Act is a legislative attempt to bring uniformity to state securities laws that are widely varied, also known as blue-sky laws. The Uniform Securities Act, or USA, outlines civil and criminal liabilities for abuse of the uniform laws. Each state’s securities laws are overseen by an administrator. The blue-sky laws not only bring uniformity to multiple states’ laws but also provides for consumer investor protection.
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Question 2 of 10
2. Question
Regarding the Investment Advisers Act of 1940, which of the following is false?
Correct
The Investment Advisers Act of 1940 provided a legal definition for the investment advisor designation and required advisors to register with the Securities and Exchange Commission (SEC). The stock market crash of 1929 brought sweeping reform to the securities industry. The Investment Advisers Act of 1940 was passed to reduce fraud perpetrated upon investors.
Incorrect
The Investment Advisers Act of 1940 provided a legal definition for the investment advisor designation and required advisors to register with the Securities and Exchange Commission (SEC). The stock market crash of 1929 brought sweeping reform to the securities industry. The Investment Advisers Act of 1940 was passed to reduce fraud perpetrated upon investors.
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Question 3 of 10
3. Question
Which of the following records should be kept after registration of an investment advisor?
Correct
Following the registration of an investment advisor, the Securities Exchange Commission requires that detailed records be kept, including a journal of transactions of cash in and disbursement out; ledgers detailing any expense, liability, reserve, asset, capital, or income accounts; documentation of orders placed by the advisor and any modifications thereto; financial records, bills and statements, original copies of written communication, and records of accounts with discretionary designations; any powers of attorney held by the investment advisor; written contracts; copies of all advertisements; and records of securities transactions in which the investment advisor has some amount of ownership.
Incorrect
Following the registration of an investment advisor, the Securities Exchange Commission requires that detailed records be kept, including a journal of transactions of cash in and disbursement out; ledgers detailing any expense, liability, reserve, asset, capital, or income accounts; documentation of orders placed by the advisor and any modifications thereto; financial records, bills and statements, original copies of written communication, and records of accounts with discretionary designations; any powers of attorney held by the investment advisor; written contracts; copies of all advertisements; and records of securities transactions in which the investment advisor has some amount of ownership.
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Question 4 of 10
4. Question
Which of the following statements is true about the registration records of an investment advisor?
Correct
Following the registration of an investment advisor, the Securities Exchange Commission requires that detailed records be kept. These records must be maintained in a secure location for five years. After the first two years, the oldest three years may be digitized and stored on the memory of a computer. The records should not be accessible to the public but should be readily available should the administrator choose to audit them.
Incorrect
Following the registration of an investment advisor, the Securities Exchange Commission requires that detailed records be kept. These records must be maintained in a secure location for five years. After the first two years, the oldest three years may be digitized and stored on the memory of a computer. The records should not be accessible to the public but should be readily available should the administrator choose to audit them.
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Question 5 of 10
5. Question
Which of the following measures helps an investor understand the impact of an outlet return on securities.
Correct
The median metric helps the investor understand the impact of an outlier return and act accordingly.
Incorrect
The median metric helps the investor understand the impact of an outlier return and act accordingly.
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Question 6 of 10
6. Question
Which of the following is false about standard deviation.
Correct
Standard deviation measures the distance each of the returns in the portfolio falls from the mean. The further spread the data is, the higher the measure of standard deviation. A higher standard deviation then indicates a high degree of volatility and thus risk.
Incorrect
Standard deviation measures the distance each of the returns in the portfolio falls from the mean. The further spread the data is, the higher the measure of standard deviation. A higher standard deviation then indicates a high degree of volatility and thus risk.
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Question 7 of 10
7. Question
Calculate the beta for Eidle group plc. using the following details:
Risk-Free Rate of Return = 2%
Company Rate of Return = 8%
Index Rate of Return = 7%Correct
Beta = 8% – 2%
_______
7% – 2%=1.2
Incorrect
Beta = 8% – 2%
_______
7% – 2%=1.2
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Question 8 of 10
8. Question
The insurance of deposits held at banks are done by:
Correct
Incorrect
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Question 9 of 10
9. Question
How many types of insured deposit accounts are there?
Correct
There are two types of insured deposit accounts; they are:
Demand deposit accounts and Certificate of deposit.Incorrect
There are two types of insured deposit accounts; they are:
Demand deposit accounts and Certificate of deposit. -
Question 10 of 10
10. Question
Which of the following defines an investment adviser?
Correct
The Investment Advisers Act of 1940 provided a legal definition for the investment advisor designation and required advisors to register with the Securities and Exchange Commission (SEC). According to the act, an investment advisor is a person (legal or natural) who “provides investment advice, reports, or analyses with respect to securities, is in the business of providing advice or analyses, and receives compensation, directly or indirectly, for these services”.
Incorrect
The Investment Advisers Act of 1940 provided a legal definition for the investment advisor designation and required advisors to register with the Securities and Exchange Commission (SEC). According to the act, an investment advisor is a person (legal or natural) who “provides investment advice, reports, or analyses with respect to securities, is in the business of providing advice or analyses, and receives compensation, directly or indirectly, for these services”.