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Question 1 of 10
1. Question
Charging performance based fees are legal under which of the following conditions?
Correct
As long as all applicable laws and regulations are followed, charging performance based fees is completely ethical and legal, assuming proper disclosure to and consent from client.
Incorrect
As long as all applicable laws and regulations are followed, charging performance based fees is completely ethical and legal, assuming proper disclosure to and consent from client.
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Question 2 of 10
2. Question
Which of the following statements is true?
Correct
When an advisor accepts discretion over a client’s account, he or she is ethically bound to act in a fiduciary manner regarding the client’s funds, that is, in the best interest of the client at all times and not for personal gain (Discretion over a client’s funds.
Incorrect
When an advisor accepts discretion over a client’s account, he or she is ethically bound to act in a fiduciary manner regarding the client’s funds, that is, in the best interest of the client at all times and not for personal gain (Discretion over a client’s funds.
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Question 3 of 10
3. Question
What does the abbreviation PST stand for?
Correct
PST means Personal Securities Trading
Incorrect
PST means Personal Securities Trading
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Question 4 of 10
4. Question
Regarding BC/DR planning, plans for a significant disrupting event must be in writing and approved by:
Correct
Business continuity and disaster recovery (BC/DR) planning is generally considered as one process by which a firm, in this case a broker-dealer, takes actions to resume the firm’s ordinary operations in the case of a significant disrupting event. Plans for these kinds of situation must be in writing, approved by a principal, and include several preventative measures.
Incorrect
Business continuity and disaster recovery (BC/DR) planning is generally considered as one process by which a firm, in this case a broker-dealer, takes actions to resume the firm’s ordinary operations in the case of a significant disrupting event. Plans for these kinds of situation must be in writing, approved by a principal, and include several preventative measures.
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Question 5 of 10
5. Question
Which of the following acts established additional requirements to prevent the laundering of money by terrorist groups?
Correct
The USA Patriot Act established additional requirements designed to prevent the laundering of money by terrorist groups.
Incorrect
The USA Patriot Act established additional requirements designed to prevent the laundering of money by terrorist groups.
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Question 6 of 10
6. Question
Which of the following acts made provisions for safekeeping of custodial funds?
Correct
Safekeeping of custodial funds as required by the Investment Advisor Act of 1940 requires the advisor to have a qualified custodian to hold the assets of the client in distinct accounts, the client must be aware that their funds are being held by the custodian, and regular statements of account must be delivered to the client by the custodian or the advisor.
Incorrect
Safekeeping of custodial funds as required by the Investment Advisor Act of 1940 requires the advisor to have a qualified custodian to hold the assets of the client in distinct accounts, the client must be aware that their funds are being held by the custodian, and regular statements of account must be delivered to the client by the custodian or the advisor.
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Question 7 of 10
7. Question
Creating multiple buy and sell orders for a single security can lead to other events that may change the direction of markets. Who benefits from this?
Correct
Those who engage in market manipulation may create multiple buy and sell orders for a single security, artificially inflating the volume of trading for the security. This practice can lead to other events that may change the direction of markets to the benefit of those practicing market manipulation.
Incorrect
Those who engage in market manipulation may create multiple buy and sell orders for a single security, artificially inflating the volume of trading for the security. This practice can lead to other events that may change the direction of markets to the benefit of those practicing market manipulation.
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Question 8 of 10
8. Question
Which of the following act prohibits investment advisers from providing their services to any government client for a period of two years following any political contribution they have made?
Correct
The Investment Advisers Act of 1940 prohibits investment advisers from providing their services to any government client for a period of two years following any political contribution they have made.
Incorrect
The Investment Advisers Act of 1940 prohibits investment advisers from providing their services to any government client for a period of two years following any political contribution they have made.
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Question 9 of 10
9. Question
How many types of powers of attorney are there to grant access to an account?
Correct
There are two types of powers of attorney (full power and limited power) to grant access to the account.
Incorrect
There are two types of powers of attorney (full power and limited power) to grant access to the account.
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Question 10 of 10
10. Question
Common stock of small-cap companies is more suited to which of the following?
Correct
The common stock of small-cap companies does not typically pay dividends, resulting in no income, and they are volatile, working against the need of capital preservation. It is more suited to the young investor’s needs.
Incorrect
The common stock of small-cap companies does not typically pay dividends, resulting in no income, and they are volatile, working against the need of capital preservation. It is more suited to the young investor’s needs.