HESI A2: Reading Comprehension (Quiz 2) Welcome to your Series 65 Practice Quizzes. Note: We designed four (4) parts of practice quizzes for each Domain. Each part has 25 questions. Domain 3 (part 2): Client Investment Recommendations and Strategies. (25 questions) Please click NEXT to start your Free Series 65 Practice Quizzes right away. Best of Luck! 1. Series 65, Client Investment Recommendations and Strategies,Series 65 One major difference between the customer identification program (CIP) and the new account opening rules of the regulatory bodies is that A. A) the CIP requires a residence address for individuals while the regulatory bodies will accept a PO Box B. B) the CIP only applies to individuals while the rules of the regulators apply to retail and institutional accounts C. C) the CIP requires a statement of the customer’s goals while the regulators only require current financial information D. D) the CIP requires date of birth while the regulators only require proof of legal age None 2. Series 65, Client Investment Recommendations and Strategies,Series 65 One of the portions of the USA PATRIOT Act of 2001that affects the opening of an account for a new customer is A. A) the customer identification program B. B) the “know-your-customer rule C. C) the Transportation Security Administration (TSA) D. D) the requirement to obtain suitability information None 3. Series 65, Client Investment Recommendations and Strategies,Series 65 All the following information must be obtained from new individual customers EXCEPT A. A) educational background B. B) Social Security number C. C) date of birth D. D) physical address None 4. Series 65, Client Investment Recommendations and Strategies,Series 65 A woman wants to buy from an agent who is not registered in her state. She decides to use a friend's address in the state in which the agent is licensed. This action is A. A) acceptable as long as she has her friend's permission to use the address B. B) acceptable because the agent can do business only with those who have a residence address in those states in which he is registered C. C) not acceptable because the other party does not know you are using the address D. D) not acceptable because there are no circumstances under which you are permitted to use someone else's address as yours None 5. Series 65, Client Investment Recommendations and Strategies,Series 65 When does a customer have to receive the OCC Options Disclosure Document? A. A) At or prior to the time the account is approved for options trading B. B) With the confirmation of his first options transaction C. C) Within 5 business days of the first options trade D. D) Within 15 days of account approval None 6. Series 65, Client Investment Recommendations and Strategies,Series 65 Which of the following is NOT a characteristic of a corporation? A. A) It is considered an entity apart from its owners. B. B) Ownership interests are evidenced by shares of stock. C. C) Owners have no personal liability for corporate debts. D. D) Existence terminates when an owner dies. None 7. Series 65, Client Investment Recommendations and Strategies,Series 65 Two sisters might wish to open an account as tenants in common (TIC) rather than JTWROS in order to A. A) ensure that their respective shares go to their heirs instead of the surviving sister. B. B) limit the right of each party to withdraw assets from the account. C. C) provide for an undivided interest in the assets of the account. D. D) allow the spouse of each sister to have access to the account. None 8. Series 65, Client Investment Recommendations and Strategies,Series 65 If a new joint tenants with rights of survivorship account is opened by two related individuals, all of the following statements are true EXCEPT A. A) orders may be given by either party B. B) mail may be sent to either party (with the permission of each party) C. C) in the event of death, the decedent's interest in the account goes to the other party D. D) checks may be drawn in the name of either party None 9. Series 65, Client Investment Recommendations and Strategies,Series 65 All of the following statements relating to an account registered as tenants in common are true EXCEPT A. A) cotenants can own unequal percentages of the assets in the account B. B) each cotenant has an undivided interest in the entire account C. C) upon the death of one of the cotenants, that individual’s share of the account passes to the survivor(s) D. D) this form of registration is less common for married couples than JTWROS None 10. Series 65, Client Investment Recommendations and Strategies,Series 65 If a businessowner's goal is to establish an entity that features ease in raising capital, which of these entities is the most appropriate? A. A) An S form of corporation B. B) A general partnership C. C) A limited liability company (LLC) D. D) A sole proprietorship None 11. Series 65, Client Investment Recommendations and Strategies,Series 65 The customer identification program (CIP) requires that certain information relating to new customers be obtained. Included in that requirement for individual clients who are citizens of the United States are all of the following EXCEPT A. A) current employment status B. B) a physical address C. C) Social Security number D. D) date of birth None 12. Series 65, Client Investment Recommendations and Strategies,Series 65 Which of the following documents would aid an investment adviser in its responsibility to fully understand the needs of a client when making investment recommendations? A. A) A proxy voting policy. B. B) A restricted list. C. C) A communications agreement. D. D) An investment policy statement. None 13. Series 65, Client Investment Recommendations and Strategies,Series 65 If an investment adviser's client wishes to save current income taxes by placing certain investments in a charitable trust, ethically, the investment adviser should A. A) recommend the client consult with a qualified attorney B. B) refuse to discuss the trust with the client because the adviser is not an attorney C. C) help the client draft the appropriate documents following a discussion of the advantages of the arrangement D. D) urge the client to consult with an attorney who pays a referral fee to the investment adviser None 14. Series 65, Client Investment Recommendations and Strategies,Series 65 With respect to taxation, an investment adviser representative should NOT A. A) explain the taxable status of particular investments B. B) draft tax and estate documents to ensure compliance with current law to provide substantial after-tax returns C. C) discuss the tax implications of investments D. D) consider tax implications as a way of improving a client's after-tax returns None 15. Series 65, Client Investment Recommendations and Strategies,Series 65 One of your clients dies. You could legally take instructions regarding the individual's estate from A. A) a CPA who prepared the deceased’s tax return B. B) the spouse of the deceased C. C) a person with durable power of attorney D. D) the administrator in intestacy None 16. Series 65, Client Investment Recommendations and Strategies,Series 65 A professional tennis player comes to you seeking advice on setting up a trust. She is interested in giving to charity and also wants discretion as to when income is distributed to the beneficiaries, her parents. Which trust do you advise she use? A. A) Charitable lead trust B. B) Simple trust C. C) Complex trust D. D) Charitable remainder trust None 17. Series 65, Client Investment Recommendations and Strategies,Series 65 An estate account is opened with Family Asset Protectors (FAP) a registered investment adviser. Management decisions regarding the account must be made at the direction of the A. A) attorney with guardianship over the surviving children B. B) investment adviser C. C) estate’s executor or administrator D. D) estate creditors None 18. Series 65, Client Investment Recommendations and Strategies,Series 65 The distributable net income (DNI) of a simple trust would not include A. A) dividends received. B. B) interest received on municipal bonds. C. C) interest received on corporate bonds. D. D) realized capital gains. None 19. Series 65, Client Investment Recommendations and Strategies,Series 65 If a customer who has granted a durable power of attorney to her son dies, which of the following statements regarding the power of attorney is TRUE? A. A) It is canceled on the death of either principal. B. B) It remains in effect until the son cancels it. C. C) It remains in effect until the executor of the estate cancels it. D. D) It remains in effect only if the son is the sole heir to the estate. None 20. Series 65, Client Investment Recommendations and Strategies,Series 65 As a registered investment adviser, you have managed $10 million of a customer's funds for several years. The customer asks you to prepare a trust for his children, to transfer $3 million of his funds into the trust, and to trade the trust with the same objectives as the existing account. You should A. A) prepare the trust, transfer funds, and begin investing B. B) explain to the customer that trusts cannot be traded C. C) refer the customer to an attorney that can set up the trust D. D) tell the customer to contact a tax specialist None 21. Series 65, Client Investment Recommendations and Strategies,Series 65 Increasingly, many institutional investors, especially those in the philanthropic arena, are using ESG factors when considering where to invest their funds. Those factors are most accurately described as A. A) exchange, sales, and general. B. B) exchange, sensitivity, and growth. C. C) earnings, systematic, and governmental. D. D) environmental, social, and governance. None 22. Series 65, Client Investment Recommendations and Strategies,Series 65 One of your longtime advisory clients has been critically injured in an automobile accident. The client is in the ICU at the local hospital, unable to communicate. You would be able to accept orders for the account A. A) from the client’s lawyer B. B) from the client by getting a squeeze of the hand for a “yes” C. C) from a person who has a written durable power of attorney over the account D. D) from the client’s spouse None 23. Series 65, Client Investment Recommendations and Strategies,Series 65 If a client wishes the assets in her account to pass directly to specific beneficiaries after her death, her account should be titled A. A) TIC B. B) testamentary account C. C) JTWROS D. D) TOD None 24. Series 65, Client Investment Recommendations and Strategies,Series 65 One of your customers has a substantial savings account at the local S&L. The customer has several grandchildren and wants the flexibility of being able to change the beneficiary allocations as their financial conditions change. You should recommend that the customer investigate the use of A. A) a durable power of attorney (POA). B. B) a Totten trust. C. C) an irrevocable trust. D. D) a Uniform Transfers to Minors Act (UTMA) account. None 25. Series 65, Client Investment Recommendations and Strategies,Series 65 One of your existing clients wishes to open a new account in the name of his spouse and enter orders on her behalf. A. A) This action is prohibited unless the customer signs a trading authorization on behalf of his spouse. B. B) This practice is ordinary and acceptable. C. C) This action is prohibited unless the spouse signs a trading authorization. D. D) The agent could be liable if the stock declines in value. None 1 out of 25 Time is Up! Time's up
