Series 63 Practice Exam 3

Which of the following meet the definition of a security under the USA?

I.    equity index annuity
 
II.   certificate of participation in gas, oil or mineral rights
 
III.  whiskey warehouse receipts
 
IV.  multi-level marketing schemes

One of your margin account customers has failed to meet a margin maintenance call. Your broker-dealer has liquidated sufficient securities to satisfy the call. Under the USA, this liquidation:

The term ‘impersonal advisory services’ refers to:

All things being equal, which of the following investment recommendations would be most suitable for a widow in her 60’s with a modest pension and minimal savings?

One of the key investment risks associated with securities is failure to diversify. Which of the following risks will diversification of a portfolio be least effective at reducing or mitigating?

An agent of a broker-dealer presents a stock recommendation to a customer which the agent strongly believes is an excellent buy at the current time. The customer agrees with the agent’s assessment, the agent recommends a $15,000 purchase, the customer agrees, and the transaction takes place. After the customer receives the trade confirm in the mail a few days later, he informs the agent he simply does not have the wherewithal to cover a trade of that size and requests the trade be canceled. Under the USA,

In accordance with the Uniform Securities Act, an institutional investor is one:

Which of the following statements is true regarding the interpretations of the USA when a brokerage firm is distributing a new issue of corporate bonds that have warrants attached?

The ex-dividend date is fast approaching in a mutual fund with which your firm has a selling agreement. Because the amount of the dividend is particularly generous this quarter, you contact a number of your clients for whom the fund is suitable and encourage them to buy prior to the cut-off date in order to be sure to receive the upcoming dividend payment. According to NASAA rules:

The net worth requirements set forth in the USA are applicable to:

I.    Investment Advisers
 
II.   Investment Adviser Representatives
 
III.  Agents
 
IV.  Broker-dealers

As set forth in the Uniform Securities Act as amended, a broker-dealer may avoid the registration requirement in this state:

Each of the following represent securities instruments with the exception of:

Exclusions from the definition of investment adviser include:

Under what circumstances may a broker-dealer refuse to ship stock certificates to a customer who has requested they be shipped to the customer’s home?

I.    the shares have been hypothecated
 
II.   the shares are part of a tenancy in common account with a co-tenant living in another state
 
III.  the customer owns less than 100 shares, which is the standard unit of trading known as a ‘round lot.’
 
IV.  the purchase transaction for those shares has not settled yet.

Differences between an unsolicited issuer transaction and an unsolicited non-issuer transaction include:

An investment adviser is required to provide a Brochure to its clients unless:

Consent to Service of Process is required as part of all applications submitted to an Administrator by those seeking registration as:

Highlighting parts of a prospectus, or underlining certain portions to emphasize their importance to your customer who is considering making an investment in a particular offering is:

Certain issuers are granted an exemption from securities registration under the USA. When an issuer claims such an exemption,

At the conclusion of an investigation, an Administrator is preparing to have a broker-dealer’s registration revoked. Under the USA, each of the below statements is true except: