Test Questions

Front 1

which of the following records must be kept on file by IA according to USA?

Back 1

A cash receipts and disbursements journal
& A ledger reflecting the capital position of the firm

Front 2

Which two MAY an administrator impost with respect to the registration req’s on IA’s and which cannot be?

Back 2

Cannot require them maintenance of 35k of net capital
Can- admin may impose certain financial req’s on IA’s such as min net worth of 35k if the adviser has custody or min net worth of 10k if adviser has custody but not investment discretion. Admin may req ia’s to maintain + net worth if they accept prepmts of $500 or more 6 months in advance. Admins donot impost such reqs on sales agents.

Front 3

who may be required to maintain net capital reqs?

Back 3

B/D's, not IA's

Front 4

Med larnex, an agent for opera singers who invests their funds for a fee is considered a___ under the USA?

Back 4

IA

Front 5

Capital securities is registered under the securities act of state A and maintains a place of biz in that state. Mario, who is in State B, has placed an order to sell a registered security. Since capital is not registered in state B and does not have a place of biz in the state, what two facts must be true for capital to avoid registering as a B/D in state B?

Back 5

Mario must be an existing customer and mario must live outside of state B

Front 6

City of Atlanta, GA revenue bonds purchased by a resident of Savannah, GA security is is exempt or non-exempt from registration under the USA? and also does not..?

Back 6

exempt and Does not fall under the category of federal covered securities

Front 7

What is another example of a security that is exempt from reg under USA but also does not fall under teh category of federall covered security?

Back 7

municiple securities purchased by residents of the state in which they were issued, are not federally covered, but still exempt from reg under the USA

Front 8

under NSMIA, what are examples of classes that are "federally covered" securities? meaning exempt from state registration

Back 8

securities listed on a major exchange, (NYSE, AMEX, or NASDAQ), mutual funds, and most securities exempted from SEC reg under the securities Act of 1933 all fall under this umbrella

Front 9

Under the USA, the term “publicly distributed written materials” are materials that are paid for by the recipients and set to at least…

Back 9

35 persons

Front 10

Sally lerner is an agent with united dominion securities who is aggressively promoting the purchase of fallible industries, inc stock. After much debate, one of her customers, sam lemur, decides to buy 1,000 shares at $36 per share on Monday. Unfortnuately, and unbeknownst to sam, the stock plunges to $13.12 on bad news the next day. That wed, sam calls sally looking for a quote on his stock and she simply state “ the stock is up 32 cents on the day” please evaluate sally’s quote..

Back 10

sally has made a factually accurate statement but has omitted the fact that the stock is down significantly from sams purchase price by not stating the security’s CMV. This practice may be considered fraudulent under the USA. Since sally has willfully deceived her client and withheld material info, she may be charged with a fraudulent practice

Front 11

Under NASAA policies regarding registration of IA’s and federal covered advisers, a fed covered adviser who wishes to offer advisory services in satte A must provide the admin with what?

Back 11

form adv as filed with the SEC and the appropraite fee

Front 12

Under NASAA model rule 203(a)-2 ( recordkeeping reqs for IA’s), for which of the following does an IA need to make and keep acurate records?

Back 12

Reccomendations, any receipt, disbursement or delivery of funds or securities, execution of any order to purchase of sell any security, powers of attorney or other docs evidencing discretionary authority

Front 13

Under USA, who need not register in a state even if engaged in effecting securities transactions as a business?

Back 13

A person that has no place of biz in the state and deals only with b/d’s, institutional investors or the issuers of the securities involved in the transaction

Front 14

T orF: Any individual associated with a b/d who effects securities transactions in a state must register in that state, whether a resident of the state or not

Back 14

TRUE

Front 15

A salesperson of a b/d selling…. stock to the public, stock to an institutional investor, municipal bonds to the public, a private placement to an institutional investor would be included in the definition of ____ under the USA

Back 15

agent

Front 16

Salespersons of b/d’s effecting securities transactions are considered agents, regardless of the securities being sold of the purchaser.

Back 16

Don’t get confused between the exemption afforded the security or transaction and the status of the agent

Front 17

An administrator of state A would like to initiate a criminal action against big snow investments for fraudulently selling limited partnership interests to several dozen investors. How long does the administrator have to initiate action?

Back 17

5 years. The admin has 5 years to initiate criminal action. Civil suits must be filed within 3 years of the contract of sale, or two years of discovery, whichever comes first

Front 18

Performing tax swaps to reduce a customers tax burden to the IRS & executing a buy order on one exchange while simultaneously executing a sell order on another under the USA are…

Back 18

not prohibited under USA

Front 19

Excessively trading and omitting material facts during a sales presentation under the USA are…

Back 19

are prohibited under USA!