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Pass the FINRA Uniform Securities State Law Series-63 Questions and answers with ExamsMirror

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Viewing questions 11-20 out of questions

Questions # 11:

Which of the following would be an unsuitable recommendation for your 68-year-old client?

Options:

a Treasury Inflation Protected Security (TIPS)

a deferred annuity

an S&P 500 Index mutual fund

a high quality corporate bond fund

Questions # 12:

uestion No: 124

Jack and Jill are a newly married couple in their mid-20s. They are determined to retire by the time they are 50 and have arranged a meeting with a representative of Professional Investment Advisers to structure a financial plan that will allow them to achieve this goal.

The representative, Mr. Hill, advises them to invest at least 60% of their money in bond funds to minimize the risk of loss on the way to their goal. Mr. Hill has

Options:

made an unsuitable recommendation for these clients and is subject to license suspension or revocation.

advised Jack and Jill well with a conservative allocation of their money to preserve principal.

committed fraud in indicating that bonds are less risky than stocks.

has committed fraud in promoting their delusion that they can possibly expect to retire by the time they turn 50, regardless of their investment strategy.

Questions # 13:

Once a broker-dealer has applied for and been granted state registration, the registration remains valid

Options:

until December 31st.

for twelve months.

for three years.

for five years.

Questions # 14:

In which of the following instances is it permissible for an investment adviser to borrow money from a client?

Options:

It is never permissible for an investment adviser to borrow money from a client.

The investment adviser may borrow money from a client if the client is a bank.

The investment adviser may borrow money from a client if the client is a close friend of the majority owner of the investment advisory firm.

The investment adviser may borrow money in either of the scenarios described in B or C.

Questions # 15:

Although an Administrator has broad powers, he or she cannot:

Options:

issue subpoenas involving compulsory attendance.

gather evidence.

deliver a judicial injunction.

formulate rules and orders.

Questions # 16:

Which of the following statements regarding an investment adviser representative who has an office in the state is true?

Options:

If the investment adviser is registered with the SEC, then neither the investment adviser nor any of its affiliated investment adviser representative needs to be registered with the state.

Regardless of whether the investment adviser is registered with the SEC or is registered with the state, all investment adviser representatives of the firm must be registered with the state if they have offices in the state.

If the investment adviser that the investment adviser representative is affiliated with is itself registered with the state, then the investment adviser representative does not need to apply for a separate registration, regardless of whether the investment adviser representative has an office in the state.

If an investment adviser representative is registered with the SEC, he or she need not obtain state registration, regardless of whether the investment adviser representative has an office in the state.

Questions # 17:

Which of the following statements best explains the difference between an agent and a broker-dealer?

Options:

An agent is an individual who represents a broker-dealer or an issuer and buys and sells securities he does not own in return for a commission on the transactions he executes. A broker-dealer may also buy and sell securities for his own portfolio, in which case the broker-dealer enjoys any price appreciation on those securities.

A broker-dealer must be licensed in the state in which he conducts business, but there are no separate licensing requirements for agents.

Agents are engaged exclusively in the purchase and sale of stocks whereas broker-dealers also buy and sell bonds and option contracts.

Agents conduct their business exclusively in the secondary market, while broker-dealers also operate in the primary market.

Questions # 18:

Registered agent Ina Scent has had her license suspended by the state Administrator prior to an administrative hearing on the order.

Which of the following statements is true regarding Ina’s situation?

Options:

Ina can sue the Administrator because she was not afforded a hearing before the suspension took place.

Ina can make a written request that a hearing on the issue be scheduled within ten business days of her request and may continue working with clients while waiting for her day in court.

Ina can make a written request that a hearing on the issue be scheduled within fifteen business days of her request and may not continue working with clients unless the Administrator vacates the order until final determination.

Ina can immediately file an appeal of the suspension in a court of law.

Questions # 19:

You are an investment adviser to Mr. Crochety, an elderly man who lives solely on his social security income although he managed to accumulate an investment portfolio worth about $100,000 over the years. Mr. Crochety recently got his hands on a business publication and read about the tax-free interest paid by municipal bonds. He calls you and instructs you to sell his other investments and invest all his money in a municipal bond portfolio, so that “the government doesn’t get any more of my hard-earned money.” You tell Mr. Crochety that you don’t believe this is a wise move because he’s in such a low tax bracket that municipal bonds are not a good investment for him, but he is insistent. Based on these facts, you should

Options:

ignore Mr. Crochety’s instruction since it is not in his best interest.

require Mr. Crochety to sign an affidavit of liability waiver, indicating that you will not be held responsible for any adverse consequences of this decision.

have Mr. Crochety sign a statement of investment policy that indicates that this transaction is being executed on the client’s instructions and that you have advised the client against it.

call Mr. Crochety’s relatives and suggest they have him examined for mental instability.