Finra Series-63 Exam Practice Test Instant Access

Question 1

MoeMoney Investment Advisers, LLC is registered in the state of Texas, and its three offices are all located in the greater Dallas-Fort Worth are

a. Five of its clients-all individuals-have relocated to Colorado and all have indicated a desire to retain the services of MoeMoney. In order for this to be possible,

AMoeMoney will need to apply for and be granted registration as an investment adviser in the state of Colorado.

Beach client will have to write a letter to the Administrator of the state of Colorado on MoeMoney's behalf.

CMoeMoney will need to apply for and be granted registration as an investment adviser representative in the state of Colorado.

DNeither MoeMoney nor its clients need do anything.

Answer : D

In order for MoeMoney to continue servicing its five individual clients who have relocated to Colorado, neither MoeMoney nor its clients need to do anything. The National Securities Markets Improvement Act of 1996 (NSMIA) established a ''deminimis'' exemption for investment advisers if they have no office in a state and do business with ''no more than five non-institutional clients'' during a one-year time frame.

Question 2

on No: 239

A tombstone advertisement is

Aan offer to sell a new security.

Bthe announcement of a new security that may become available for purchase.

Cthe only type of advertisement that an investment advisory firm is allowed to use.

Dan offer to sell a new security that is being issued by an Arizona firm.

Answer : B

A tombstone advertisement is an announcement of a new security that may become available for purchase. It is the only type of advertisement that is allowed during the ''cooling off period'' once a firm has filed a registration statement for a new security. It is not an offer to sell the security, an act that is strictly prohibited during this period.

Question 3

Mr. Bigwig, CEO of HiGrowth Corporation, meets with the president of BigFee Investment Bankers and arranges for BigFee to underwrite an Initial Public Offering (IPO) for the firm. When the IPO comes to market, GetErDone Broker-Dealers is part of the selling group, which handles the sale of the stock to the public.

In this scenario, which party is acting as a dealer?

AHiGrowth Corporation

BMr. Bigwig

CBigFee Investment Bankers

DGetErDone Broker-Dealers

Answer : C

BigFee Investment Bankers is acting as a dealer. In underwriting the securities, the firm is purchasing them from HiGrowth and selling the securities to the public. If the securities don't sell for the amount that BigFee thinks they can, BigFee takes the loss as owner of the securities.

Question 4

The Administrator of a state can deny an application if

Athe application is missing information.

Bthe registrant has been enjoined from engaging in activities involving securities in another state.

Cthe Administrator determines the applicant is not financially solvent.

Dany of the above is true.

Answer : D

The Administrator of a state can deny an application if the application is missing information, if the registrant has been enjoined from engaging in activities involving securities in another state, or if the Administrator determines the applicant is not financially solvent.

Question 5

Treadwater Bank and Trust is selling a portfolio of municipal bonds it owns to the SafeRisk Insurance Corporation. Under the Uniform Securities Act (USA), in this transaction Treadwater is defined as a

Abroker-dealer.

Bagent.

Cissuer.

Dnone of the above.

Answer : D

When Treadwater Bank and Trust sells municipal bonds it owns to SafeRisk, it does not meet the USA definition of a broker-dealer, an agent, or an issuer. As a bank, Treadwater is automatically excluded as a broker-dealer. Nor can Treadwater be defined as an agent since an agent can only be an individual. Treadwater is not the issuer of the securities; the state and local governments that originally issued the securities are.

Question 6

A broker-dealer cannot legally be

Aa partnership.

Ban individual.

Ca sole-proprietorship.

DA broker-dealer can be any of the above.

Answer : D

A broker-dealer can be a partnership, an individual, or a sole-proprietorship under the guidelines of the Uniform Security Act.

Question 7

To continue operating as an agent, broker-dealer, investment adviser, or investment adviser representative next year, you must pay the filing fee to renew your license with the state Administrator by

AJanuary 15th of the new year.

BJanuary 30th of the new year.

CDecember 31st of this year.

Dthe anniversary date of the original issue date on your license.

Answer : C

To continue operating as an agent, broker-dealer, investment adviser, or investment adviser representative next year, you must pay your filing fee to renew your license by December 31st of this year. Otherwise, your license will expire. There is no grace period.

Finra Uniform Securities State Law Examination Series-63 Exam Practice Test