HESI A2: Vocabulary & General Knowledge (Quiz 1) 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 2): 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 Which of the following does NOT meet the compensation test for defining investment advisers under SEC Release 1A-1092? A. A) An insurance agent sells a life insurance policy and receives a commission on that policy. During the sale of the insurance policy, the agent provides some securities investment advice B. B) Your next-door neighbor recommends the purchase of a certain security from his broker, which you eventually do C. C) Subscription payments received by a publisher of a newsletter providing impersonal securities-related advice D. D) A real estate agent advertises that she will give free advice regarding investing the proceeds from the sale of any home she lists None 2. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 A person is excluded from the definition of investment adviser under the Investment Advisers Act of 1940 if the investment advice and reports are restricted to A. A) securities listed on a national stock exchange B. B) U.S. government securities C. C) bank and insurance company securities D. D) foreign securities None 3. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Which of the following is required to register in a state under the Uniform Securities Act? A. A) ABC State Bank, which provides investment advice in its branches throughout the state B. B) A broker-dealer who has no place of business in the state and whose only clients in the state are limited to insurance companies, banks, and broker-dealers C. C) An investment adviser who has a place of business in the state and whose only clients in the state are insurance companies, banks, and broker-dealers D. D) An investment adviser who has no place of business in the state and communicates with only 5 advisory clients in the state for the year None 4. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Written policies and procedures reasonably designed to safeguard customer information from cyber security threats would include all of the following EXCEPT A. A) maintaining the minimum required cybersecurity insurance coverage. B. B) encrypting personally identifiable information. C. C) conducting periodic risk assessments. D. D) implementing a firewall. None 5. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 The USA provides either an exclusion from the definition or an exemption from registration as an investment adviser for certain persons. Which of the following would be required to register? A. A) A bank trust officer with less than $250 million in assets under management B. B) A teacher who teaches a course in the local high school on consumer economics C. C) A CFP® who provides a full range of financial planning to clients on a fee-only basis D. D) An engineer employed by an oil company selling limited partnership interests to public investors who provides estimates of recoverable reserves None 6. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the SEC Release IA-1092, who of the following would be considered to be in the business of rendering investment advice? A. A) A financial planner who charges no fee for developing a financial plan, but takes commissions on recommended trades B. B) An accountant who provides investment advice to clients as an incidental part of the business C. C) An agent who receives no separate compensation for investment advice but who takes commissions on recommended trades D. D) An individual who provides investment advice to family members, but receives no compensation None 7. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Uniform Securities Act, which of the following statements relating to the registration requirements of investment advisers is TRUE? A. A) A registration becomes effective at noon, 30 days after the application has been filed, providing the registration is not in the process of denial. B. B) If an amendment to the registration is subsequently filed, the registration becomes effective 15 days after the amendment is filed. C. C) Registrations of securities professionals expire 1 year after their effective date, unless renewed. D. D) A registration is automatically effective at noon, 30 days after the application has been filed. None 8. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 After diligently studying the Kaplan course, Greg Gossett completed the series of exams for the Certified Financial Planner (CFP®) designation. Now, Greg would like to expand his horizons by becoming a registered investment adviser. In order to do so, Greg would have to do all of the following EXCEPT A. A) pay a filing fee B. B) pass the Series 65 examination C. C) provide a consent to service of process D. D) submit a Form ADV None 9. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 A consent to service of process required by an Administrator is A. A) a formal statement declaring that an investment adviser will comply with all advertising requirements of the USA B. B) an agreement to perform all services and duties that the Uniform Securities Act (USA) requires of those individuals covered by the USA C. C) an agreement whereby a registrant will be bound by any legal action or subpoena served on the Administrator as if it had been served on the registrant D. D) a legal procedure that authorizes the Administrator to issue injunctions None 10. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 When filing the consent to service of process, which of the following is TRUE? A. A) It must be filed annually on the dates specified by the Administrator. B. B) It is not required of investment adviser representatives, only investment advisers. C. C) It expires simultaneously with the registration on December 31. D. D) It is supplied with the initial registration and remains on file permanently. None 11. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Peterson Financial Planning is a small personal financial planning partnership in Missouri that has $10 million in assets under management. As a result of the Dodd-Frank Act, which of the following statements best describes the registration requirement for Peterson Financial Planning? A. A) Peterson Financial Planning is required to register as an investment adviser with the SEC but has no requirement to register with the Administrator of the Missouri Department of Securities. B. B) Peterson Financial Planning is required to register as an investment adviser with the SEC and to notify the Administrator of the Missouri Department of Securities of its operation. C. C) Peterson Financial Planning is required to register as an adviser with the Administrator of the Missouri Department of Securities. D. D) Peterson is required to register as an adviser with both the SEC and the Administrator of the Missouri Department of Securities. None 12. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Which of the following investment advisers, with no place of business in the state, does not qualify for the de minimis exemption? A. A) An investment adviser who, during the preceding twelve-month period, has had no more than 6 retail clients. B. B) An investment adviser who, during the preceding twelve-month period, has had 5 or fewer retail clients. C. C) An investment adviser who, during the preceding twelve-month period, has had fewer than 6 retail clients. D. D) An investment adviser who, during the preceding twelve-month period, has had no more than 5 retail clients. None 13. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 A pension consultant who advises corporate retirement plans with assets of $135 million must register with which of the following? A. A) SEC B. B) Either the state or the SEC C. C) Both the state and the SEC D. D) The state None 14. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Foster Advisers, based in New Jersey, manages $135 million in funds for New Jersey-based clients. As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which of the following statements best describes the registration requirement for Foster Advisers? A. A) Foster Advisers is required to register as an adviser with the SEC and has no requirement to notify the Administrator of the New Jersey Department of Securities. B. B) Foster Advisers is required to register with both the SEC and the Administrator of the New Jersey Department of Securities. C. C) Foster Advisers is required to register with the Administrator of the New Jersey Department of Securities. D. D) Foster Advisers is required to register as an adviser with the SEC and notify the Administrator of the New Jersey Department of Securities of its operation. None 15. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Defalcator Investment Planning (DIP) has $175 million in AUM and has offices in States A, K, and R. DIP would be required to provide a balance sheet as part of its brochure if it charged fees of A. A) $1,200 for the next 6 months of advisory service. B. B) $1,500 for the next year’s advisory service. C. C) $1,500 for the next 3 months of advisory service. D. D) $600 for the next 6 months of advisory service. None 16. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 A broker-dealer is NOT considered an investment adviser if A. A) the firm has less than 15 advisory accounts totaling less than $1 million B. B) the firm's investment advice is limited to 10 or fewer people C. C) the firm is registered under the Investment Advisers Act of 1940 D. D) the investment advisory services are incidental to the broker-dealer's business and no special compensation is received None 17. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 A state-registered investment adviser maintains custody of client funds and securities. On Thursday, the chief financial officer of the firm informs the chief compliance officer that their net worth is $31,578. Under the provisions of the Uniform Securities Act, the firm would A. A) need to increase the amount of their surety bond B. B) do nothing, as their net worth is far in excess of the minimum requirement of $10,000 C. C) send a detailed financial report to the Administrator by the close of business Friday D. D) send a detailed financial report to the Administrator by the close of business Monday None 18. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 With regard to the keeping of records, the Uniform Securities Act states that investment advisers must keep records for A. A) 5 years B. B) 5 years, the first 2 in the principal office of the adviser C. C) 3 years D. D) 3 years, the first 2 in the principal office of the adviser None 19. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 An investment adviser to a private fund wishes to qualify for the exemption offered under the Uniform Securities Act when the fund has no more than 100 investors. In order to qualify, A. A) the private fund adviser must have less than $110 million in private fund assets under management B. B) the fund’s outstanding securities are owned exclusively by persons who, at the time of acquisition of such securities, are individuals with at least $5 million in investments C. C) neither the private fund adviser nor any of its advisory affiliates have been convicted of a felony within the past 12 years D. D) every investor must have either at least $1 million in assets managed by the investment adviser, or a net worth, excluding the value of the primary residence, in excess of $2.1 million None 20. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 MidWest Advisory Services has $175 million in assets under management and has offices in 10 Midwest states. Regarding recordkeeping requirements, MidWest must meet those of A. A) the SEC. B. B) each state in which it has a place of business C. C) the state in which its principal office is located D. D) the state with the most stringent financial requirements None 21. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Uniform Securities Act, if not denied, an application for registration as investment adviser will generally become effective how soon after filing? A. A) 30 days B. B) 15 days C. C) Immediately D. D) 10 days None 22. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Investment Advisers Act of 1940, who is not excluded from the definition of investment adviser when their investment advice is solely incidental to the individual's profession? A. A) Engineers B. B) Teachers C. C) Attorneys D. D) Insurance agents None 23. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 Under the Investment Advisers Act of 1940, the exclusion for providing investment advice that is solely incidental to the practice of a profession is NOT available to A. A) teachers B. B) real estate agents C. C) attorneys D. D) engineers None 24. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 An investment adviser sends a notice offering a research report she has recently prepared to a group of 25 new members of the local Lions Club. Under the NASAA Model Rule on recordkeeping for investment advisers, the firm must keep a copy of the notice along with A. A) the date the Administrator approved the research report B. B) a memorandum describing the list and its source C. C) a copy of the full roster of the local chapter D. D) the names of those members to whom the report was sent None 25. Series 65, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 65 If a federal covered adviser's fiscal year ends on November 30, 2017, it must file its annual updating amendment to its Form ADV no later than A. A) February 28, 2018 B. B) March 30, 2018 C. C) December 31, 2017 D. D) January 18, 2018 None 1 out of 25 Time is Up! Time's up
