HESI A2: Reading Comprehension (Quiz 5) 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 4 (part 1): Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices​​​​​​​. (25 questions) Please click NEXT to start your Free Series 65 Practice Quizzes right away. Best of Luck! 1. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Uniform Securities Act, a person whose business model is selling reports on a subscription basis concerning specific securities to investors based on their individual objectives will be defined as A. A) a broker-dealer B. B) an investment adviser C. C) a journalist D. D) an agent None 2. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 There are waivers from the Series 65 exam requirement for certain professional designations. Among those qualifying for the waiver are individuals who are A. A) MBAs. B. B) CLUs. C. C) CPAs. D. D) CFP®s. None 3. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 The responsibility for administering the Investment Advisers Act of 1940 lies with A. A) FINRA B. B) the Administrator C. C) the Investment Advisers Association (IAA) D. D) the SEC None 4. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Investment Advisers Act of 1940, which of the following is TRUE about the use of the term "investment counsel" by investment advisers? A. A) Advisers may use the term without restriction as long as they are registered. B. B) The use of the term is prohibited under any circumstances. C. C) Advisers may use the term only if their principal business is acting as an investment adviser and a substantial part of their business consists of providing continuous advice based on a client's individual needs. D. D) Advisers may use the term only if they are attorneys. None 5. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Which of the following investment advisers would be permitted to use the term "investment counsel"? A. A) A professional providing a market timing service with an annual subscription fee of $995, with this service attempting to maximize profits by suggesting entry and exit points for over 100 listed stocks B. B) An investment adviser who has been admitted to the bar in the state in which the firm's principal office is located C. C) A financial planner offering a wide range of services to his clients, including tax planning, estate planning, insurance planning, and investment advice D. D) A firm whose exclusive business is placing clients' assets into model portfolios None 6. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Which of the following is NOT a person as defined by the Uniform Securities Act? A. A) XYZ Dry Cleaners, Inc., whose shareholders all work on the premises and also offer financial advice to customers who request it. B. B) A small unincorporated investment club. C. C) A child prodigy for whom his mother, as custodian, opened an account at a major securities firm. D. D) Guelph, a small city outside of Toronto, Ontario, that maintains an investment account at a brokerage house to invest surplus funds. None 7. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 The term "investment counsel" can be used by investment advisers A. A) who are registered with the SEC under the Investment Advisers Act of 1940 B. B) who are also attorneys C. C) who are also registered as broker-dealers D. D) with a primary business of rendering investment advice None 8. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Which of the following is NOT included in Form ADV Part 2A? A. A) Types of investments made by the adviser B. B) A description of how the adviser is compensated C. C) Investment policy of the adviser D. D) States in which the investment adviser is registered or intends to register None 9. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 The chief compliance officer (CCO) of a registered investment adviser would generally not have responsibility for the actions of A. A) ministerial personnel of the firm. B. B) an investment adviser representative of the firm. C. C) an agent registered with an affiliated broker-dealer. D. D) supervisory personnel of the firm. None 10. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 A federal covered registered investment adviser who receives compensation for advice and whose business is primarily as an investment adviser may describe its business as investment counsel if A. A) a substantial part of his business is providing investment supervisory services B. B) it maintains custody of customer funds and/or securities C. C) it maintains its registration by filing an updating amendment to its Form ADV annually D. D) it receives SEC approval to use the definition None 11. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 According to the Investment Advisers Act of 1940, the SEC must either grant investment adviser registration or begin proceedings to determine whether registration should be denied within how many days of filing? A. A) 45 B. B) 90 C. C) 60 D. D) 30 None 12. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Included in the Investment Advisers Act of 1940 are a number of different recordkeeping requirements. Wealth Preservation Specialists is a covered adviser that is organized as a partnership. If the firm were to dissolve, partnership agreements must be kept for A. A) 3 years after the dissolution B. B) 5 years after the dissolution C. C) 5 years from the date of organization D. D) the lifetime of the firm None 13. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Registration as an investment adviser is required for any firm in the business of giving advice on the purchase of A. A) gold coins B. B) apartments undergoing a conversion to condominiums C. C) convertible bonds D. D) rare convertible automobiles None 14. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 John Law is the owner of Mississippi Advisory Services (MAS), an independent financial planning organization. Law is registered as an investment adviser representative of SSC Securities and Investments, registered as a broker-dealer, and an investment adviser with the SEC. Supervision over Law's advisory activities is the responsibility of A. A) MAS’s CCO. B. B) SSC’s CCO. C. C) John Law. D. D) the SEC. None 15. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 In which of the following cases could revocation of the registration of an IAR lead to disciplinary action against the investment adviser employing that individual? A. A) The IAR was found guilty of first degree murder. B. B) The IAR failed to make full disclosure of a previous felony conviction on the Form U4. C. C) The firm supplied the IAR with a copy of its Code of Ethics and administered regular training on its contents. D. D) The firm was found guilty of failure to supervise. None 16. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Leslie is an IAR with Financial Visions (FV), a federal covered investment adviser. Leslie operates Innovative Financial Solutions (IFS), a separate financial planning company with its own office in State W. Should Leslie be found guilty of fraudulent business activities, FV would A. A) be immune from State W’s Administrator’s jurisdiction because it is a federal covered adviser. B. B) claim that IFS is a separate entity over which FV has no responsibility. C. C) be subject to possible disciplinary action brought by the State W Administrator if it could be shown that FV failed to supervise Leslie’s activities. D. D) possibly have its State W registration suspended. None 17. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Which of the following statements regarding the SEC's power to revoke the registration of an investment adviser is TRUE? A. A) If it is determined that an investment adviser is insolvent, the SEC may revoke the registration. B. B) An investment adviser receiving substantial prepayment of fees from 50% of its clients that fails to include a copy of its balance sheet in its brochure delivered to all clients would give the SEC cause for beginning revocation proceedings. C. C) Revocation would occur, with appropriate notice, when a firm’s annual updating amendment was received by the SEC 120 days after the end of the registrant’s fiscal year. D. D) Failure to adequately supervise a person associated with the adviser could be cause for the SEC to revoke the firm’s registration. None 18. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 The Investment Advisers Act of 1940 requires every registered investment adviser to have a chief compliance officer (CCO). This individual would be responsible for ensuring compliance with the firm's Code of Ethics by all of these EXCEPT A. A) clerical and ministerial employees of the firm B. B) investment adviser representatives employed by the firm C. C) a nonaffiliated broker-dealer through whom the majority of the firms trades are executed D. D) investment adviser representatives who are independent contractors None 19. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Uniform Securities Act, which of the following is an investment adviser? A. A) Tom writes a newspaper column that analyzes and recommends securities. B. B) Jane advises customers regarding the value of gold and silver coins. C. C) The Trust Department of ABC Bank provides investment advice to its clients. D. D) Jill is an attorney specializing in estate planning who, as a side job, structures portfolios for the beneficiaries of her deceased clients at a reduced fee. None 20. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 To register a sole proprietorship as an investment adviser in a state, the application for initial registration (Form ADV) must be filed with the appropriate party. This application must include all of the following except A. A) the appropriate fees. B. B) a consent to service of process. C. C) any information to be furnished or disseminated to any client or prospective client. D. D) a copy of the articles of incorporation for the business. None 21. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Uniform Securities Act, which of the following qualifies as an investment adviser representative? A. A) An agent who offers incidental advice on securities as part of his sales commissions B. B) An individual who renders fee-based advice on precious metals C. C) A solicitor for an investment advisory firm who is paid a fee for his services D. D) An employee, although highly skilled in evaluating securities, solely performs administrative or clerical functions for an investment adviser None 22. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 The final responsibility for ensuring that investment adviser representatives are adequately supervised is that of A. A) the managing principal. B. B) the Administrator. C. C) the chief compliance officer. D. D) each investment adviser representative’s immediate supervisor. None 23. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Uniform Securities Act, if no denial or proceedings are pending, when does an investment adviser registration become effective? A. A) When the Administrator so orders, but not to exceed 90 days B. B) When the Administrator so orders, but not to exceed 30 days C. C) No sooner than 15 days D. D) 60 days after application or an amendment is filed None 24. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Kapco Advisers, a federal covered investment adviser operating on a calendar-year basis, published a list of recommended securities in January 2015. A copy of this must be maintained until at least A. A) January 31, 2020 B. B) January 31, 2017 C. C) December 31, 2017 D. D) December 31, 2020 None 25. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 The primary responsibility for supervising the activities of an investment adviser representative who is affiliated with a federal covered investment adviser lies with A. A) the investment adviser representative B. B) the investment adviser the IAR represents C. C) the SEC D. D) the Administrator None 1 out of 25 Time is Up! Time's up
