NCLEX-RN Practice Exam 1 Welcome to your Series 66 Practice Exam 4 This test is designed to prepare you mentally for the actual Series 66 Exam with the same number of (100 questions) and the same time allowed (150 minutes) as the actual exam. The Series 66 Exam is breakdown into four (4) Parts. Here are the Four (4) Domains of the Series 66 Exam with the weightage and number of questions in this practice exam: 1. Economic Factors and Business Information [05 Questions] - 05% 2. Investment Vehicle Characteristics [20 Questions] - 20% 3. Client Investment Recommendations and Strategies [30 Questions] - 30% 4. Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices [45 Questions] - 45% Please click NEXT to start your Free Series 66 PRACTICE EXAM right away. Best of Luck! 1. An investment of $5,000 made 10 years ago is now worth $20,000. Using the Rule of 72, the approximate compounded annual rate of return is A) 7.2% B) 14.4% C) 25% D) 40% None 2. If you were using the discounted cash flow method to determine the appropriate value of a security, you would want to purchase that security when A) the rating of the security has just been upgraded B) the current market price is above the PV C) the current market price is below the PV D) the current market price equals the PV None 3. An investment adviser is analyzing 4 bonds of similar quality for a client. Bond A has a coupon of 6%, matures in 12 years, and is currently priced at 50. Bond B has a coupon of 8%, matures in 9 years, and is currently priced at 50. Bond C has a coupon of 4%, matures in 18 years, and is priced at 45. Bond D has a coupon of 12%, matures in 6 years, and is priced at 50. Based on NPV, which of these bonds represents the better value? A) Bond B B) Bond D C) Bond A D) Bond C None 4. An investor's required rate of return is 6%. If the internal rate of return of the investment offered is 5.75%, then the NPV is A) negative B) between 5.75% and 6% C) zero D) positive None 5. If the net present value of a series of discounted cash flows is less than zero, one could conclude that A) the internal rate of return equals the discount rate. B) the discounted cash flows are lower than the investment outlay. C) the return on investment is higher than the internal rate of return. D) the rate of return is higher than the cost of capital. None 6. An investor believes that he can study the history of security trades and security markets in order to identify buying opportunities. Furthermore, he prepares and studies charts on the past prices of the securities he is most interested in purchasing for his portfolio. He uses these charts to try to predict the future activity of a particular stock. What type of strategy is this investor using to make his investment decisions? A) Ratio analysis B) Tactical asset allocation C) Technical analysis D) Fundamental analysis None 7. An investor purchases a Treasury note and the confirmation shows a price of $102.21. Rounded to the nearest cent, the investor's cost, excluding commissions, is A) $1,022.10. B) $1,022.21. C) $1,026.56. D) $102.21. None 8. A bond selling for $20 above par would be quoted A) 1,200.00 B) 102 C) 1,020.00 D) 120 None 9. Mr. Beale buys 10M RAN 6.6s of 32 at 67. What is his total purchase price? A) $6,600 B) $6,700 C) $10,200 D) $10,000 None 10. An investor purchases a Treasury note and the confirmation shows a price of $102.25. Rounded to the nearest cent, the investor's cost, excluding commissions, is A) $1,022.50. B) $1,027.81. C) $102.25. D) $1,020.25. None 11. Bond prices are quoted as a percentage of A) stated value B) conversion value C) market value D) par value None 12. One of the likely consequences of a rating downgrade on a bond is A) a reduction in the market price of the bond. B) the call feature will be employed. C) the current yield will be reduced. D) an increase to the coupon by the issuer. None 13. High-yield bonds are frequently called junk bonds. Which of the following expresses the highest rating that would apply to a junk bond? A) CC B) BB C) BBB D) CCC None 14. With respect to safety of principal, of the following investments, the least risky is A) common stock B) equity options C) exchange-listed warrants D) corporate AA debentures None 15. Many fixed-income investors are looking to avoid loss of principal. Which of the following would likely have the lowest degree of exposure to credit risk? A) Baa-rated municipal revenue bond B) A-rated general obligation municipal bond C) Ba-rated corporate mortgage bond D) Aa-rated corporate debenture None 16. DERP Corporation's 5% convertible debentures maturing in 2030 are currently selling for 120. The conversion price is $40. One would expect the DERP common stock to be selling A) somewhat above $30 per share B) somewhat below $48 per share C) somewhat above $48 per share D) somewhat below $30 per share None 17. If a convertible bond is purchased at its $1,000 par value and is convertible at $83.33 per common share, what is the conversion ratio of common shares per bond? A) 2 shares for each bond B) 8 shares for each bond C) 12 shares for each bond D) 1.2 shares for each bond None 18. A corporation has issued a 4% $60 par convertible stock with a conversion price of $20. With the preferred stock selling at $66 per share, an investor holding 100 shares of this stock would benefit by converting if the price of the common stock was A) below $22 per share B) above $18.20 per share C) above $20 per share D) above $22 per share None 19. The XYZ Corporation's A-rated convertible debenture is currently selling for 90. If the bond's conversion price is $40, what is the parity price of the stock? A) $44 per share B) $36 per share C) $22.50 per share D) $40 per share None 20. An investor owns a debenture convertible into 20 shares of the issuer's common stock. After a 2-for-1 stock split, the terms of the debenture provide for conversion into 40 shares. This is because the debenture has A) an antidilution clause B) increased its par value to $2,000 to account for the split C) preemptive rights D) warrants attached None 21. The DERP Corporation has an outstanding convertible bond issue that is convertible into 8 shares of stock. If the current market price of the bond is 80, the parity price of the stock is A) $125 per share B) $100 per share C) $80 per share D) $64 per share None 22. A client of yours owns some convertible preferred stock. She notices an article in the business section of her local newspaper that reports the company is going to pay a 20% stock dividend on their common stock. She wants to know how this will affect her? A) There will be no effect. B) If there is an antidilution clause, her conversion privilege will permit her to acquire 20% more shares than before the stock dividend. C) More than likely, the price of the preferred stock will rise. D) She will also receive 20% more shares because preferred stock has a priority claim ahead of common. None 23. DERP Corporation has issued 5% convertible debentures maturing in 2040. The conversion price is $40 and the common is currently trading at $48 per share. One would expect the DERP debentures to be selling somewhat A) above $1,200. B) below $1,000. C) above $1,000. D) below $1,200. None 24. When an investor owns a convertible security where, upon conversion, the account value would remain the same, it is considered that the convertible and the common are selling at A) the nominal yield B) the arbitrage level C) equivalent value D) parity None 25. BFJ Corp's 5% convertible bond is trading at 120. The bond is convertible at $50. An investor buying the bond now and immediately converting into common stock, would receive A) 2.4 shares B) 24 shares C) 20 shares plus cash for fractional shares D) 20 shares None 26. A customer has just died. If his wife asks you what amount of federal estate tax will be imposed on the transfer of their personal property to her name, which of the following responses would be best? A) The amount may be prorated over the next 4 years. B) Consult a qualified tax specialist. C) The amount of tax will depend on your late husband's tax bracket. D) The amount of tax will depend on the size of the estate to be transferred. None 27. One of your clients has named you as the trustee for a trust he has established. The beneficiary of the trust approaches you with a request for a disbursement that is contrary to the provisions of the trust document. In accordance with the provisions of the Uniform Prudent Investor Act, you should A) follow the wishes of the beneficiary B) follow the terms of the trust C) contact the grantor D) do nothing None 28. One of your clients approaches you about setting up a trust. If your client assumes the role of grantor, what additional roles may be taken? A) Beneficiary B) Trustee C) As the grantor, no other roles may be taken C) As the grantor, no other roles may be taken None 29. With respect to taxation, an investment adviser representative should NOT A) draft tax and estate documents to ensure compliance with current law to provide substantial after-tax returns B) discuss the tax implications of investments C) consider tax implications as a way of improving a client's after-tax returns D) explain the taxable status of particular investments None 30. Which of the following is most commonly used when the author wants to express end of life wishes? A) A testamentary trust B) A living trust C) A revocable trust D) A living will None 31. Alvin's spouse is a trustee of a trust established by Henrietta Flood, which directs income from the trust be paid to Alvin, for as long as he lives. Alvin's son, Floyd, will receive the principal upon Alvin's death. Floyd would like to receive some of the principal before Alvin's death, and Alvin does not object. How should his spouse, the trustee, act in this situation? A) Distribute all of the principal to Floyd. B) Distribute part of the income to Floyd. C) Follow the trust terms, continuing to distribute the income to Alvin and the principal to Floyd upon Alvin's death. D) Distribute part of the principal to Floyd. None 32. 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) recommend the client consult with a qualified attorney B) refuse to discuss the trust with the client because the adviser is not an attorney C) help the client draft the appropriate documents following a discussion of the advantages of the arrangement D) urge the client to consult with an attorney who pays a referral fee to the investment adviser None 33. A trust document's investment policy emphasizes that the fiduciary must follow SRI. When you are asked by the trustee to explain what that means, you would reply, A) sustainable reasonable investing. B) safe responsible investing. C) socially responsible investing. D) systemic responsible investing. None 34. Because a trust account is managed for the beneficial interest of the beneficiary, the investment adviser representative handling the account can A) have funds withdrawn from the account at the direction of the beneficiary B) arrange to have the trust’s funds pledged to support a loan for the trustee C) place the securities in the trust fund in a noncustodial brokerage account D) have a check drawn on the account payable to the trustee for trustee expenses None 35. In a trust, the person who establishes the trust and decides on its terms is A) the beneficiary B) the grantor C) the fiduciary D) the trustee None 36. When a trustee is managing the trust assets, which of the following is the most important consideration? A) Minimizing expenses B) Preservation of capital C) Reasonable income D) The purposes, terms, distribution requirements, and other circumstances of the trust None 37. Mr. and Mrs. Williams are a retired couple receiving most of their income from a diversified portfolio of high-quality bonds and preferred stock. One of the reasons that life insurance might be a useful addition to their overall planning is that A) the proceeds of a life insurance policy are free of income tax B) upon the death of the insured, the insurance provides liquidity to preserve income-producing assets from having to be liquidated to cover death expenses C) dividends received on a life insurance policy are tax free D) the premiums can be paid directly from their brokerage account None 38. A client of yours is getting older and is concerned about having her wishes met relating to medical issues when she is no longer capable of communicating them. The most appropriate vehicle for her would be A) a joint and survivors will B) a life support will C) an incapacitation will D) a living will None 39. A client with a sizable estate would probably find it most efficient to pay estate taxes with A) cash B) proceeds from a life insurance policy C) proceeds from the liquidation of a diversified portfolio D) proceeds from the liquidation of a tax-deferred retirement plan None 40. A major benefit of a revocable trust is A) the settlor cannot also be the beneficiary. B) the grantor retains control of the assets. C) the assets are not included in the grantor’s estate. D) the grantor saves on income taxes. None 41. One of the situations that investment adviser representatives may encounter is the death of a client. When that happens, orders may be accepted from A) the deceased client’s spouse. B) the trustee in intestacy. C) the deceased client’s children. D) an individual with a durable power of attorney. None 42. A grantor retained annuity trust is a planning tool designed to pass assets to beneficiaries (usually children) in a way to minimize A) estate taxes. B) income taxes. C) excise taxes. D) property taxes. None 43. A major benefit of a revocable trust is that A) the settlor cannot also be the beneficiary. B) the assets are not included in the grantor’s estate. C) the grantor retains control of the assets. D) the grantor saves on income taxes. None 44. If the Smiths want to open a joint account at AAA Securities Corporation and have their securities transferred to their 3 daughters upon the death of the last surviving account holder, their agent should recommend that the Smiths open A) a joint tenancy account with right of survivorship and execute a transfer on death (TOD) registration form B) individual accounts in the name of each daughter C) a joint tenancy account with right of survivorship D) a tenants in common account None 45. A wealthy individual has set up a GRAT. Should she die during the time the trust is active, how are the remaining assets in the trust taxed? A) The original value plus any appreciation passes to the beneficiaries but is subject to gift tax. B) No tax is due if the grantor should die during the term of the trust. C) The original value plus any appreciation is taxed as part of the grantor’s estate. D) The original value plus any appreciation passes to the beneficiaries and is taxed as ordinary income. None 46. In the banking industry, the term POD refers to an account similar to the TOD designation used by broker-dealers. An old, but sometimes still used term to describe this kind of account, is A) demand deposit account (DDA) B) revocable trust C) Totten trust D) passbook savings account None 47. Which type of individual account allows for investments held in that account to go straight to a named beneficiary outside of probate? A) Advisory account B) TOD account C) Testamentary account D) Account titled JTWROS None 48. When a will calls for property to be distributed per stirpes, it means that A) the property is divided into as many equal shares as there are surviving children of the designated ancestor, with nothing going to surviving descendants of deceased children B) the property is divided into as many equal shares as there are surviving children and grandchildren of the designated ancestor C) the property is divided into as many equal shares as there are surviving children of the designated ancestor and deceased children who left surviving descendants D) all living descendants of the ancestor receive equal shares in the property remaining after all estate expenses are paid None 49. 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 durable power of attorney (POA). B) an irrevocable trust. C) a Uniform Transfers to Minors Act (UTMA) account. D) a Totten trust. None 50. If a client wishes the assets in her account to pass directly to specific beneficiaries after her death, her account should be titled A) testamentary account B) TOD C) JTWROS D) TIC None 51. One of the tasks of an investment adviser representative is gathering information to complete a client financial profile. Among the sources of this information would be all of the following except A) the client’s life insurance policies. B) the client’s social media accounts. C) the client’s bank and brokerage statements. D) the client’s tax returns. None 52. An investment advisory firm requires all new clients to complete a 4-page questionnaire before conducting the first meeting. This would be known as A) the investment adviser’s brochure. B) fulfilling the requirements of the CIP. C) the information-gathering stage. D) the client disclosure document. None 53. Several investors open an account in joint tenancy. Financial information is required on which of the following investors? A) The majority of the investors B) Only the one authorized to trade the account C) All the investors D) The largest investor only None 54. In general, the first step an investment adviser should take with a new client is A) making suitable recommendations. B) monitoring the portfolio. C) explaining the risks of investing. D) information gathering. None 55. In administering a joint account, a member firm's responsibilities concerning suitability determination and information disclosure apply to A) the person with the greatest capital contribution B) the person whose Social Security number is on the account C) all persons who jointly own the account D) the person with trading authority for the account None 56. Form PF must be filed by A) state-registered private fund managers, regardless of the amount of assets under management B) SEC-registered advisers with at least $150 million in private fund assets under management C) SEC-registered advisers with no more than $150 million in private fund assets under management D) SEC-exempt reporting advisers None 57. Reticent Asset Management (RAM) is claiming an exemption from registration with the state because it is an adviser to private funds. One of the requirements to qualify for this exemption is A) all investors must be qualified clients. B) there can be no more than 10 investors during any 12-month period. C) all investors must be accredited. D) private fund assets under management cannot exceed $110 million. None 58. The term "private fund", as defined under federal and state law, would not apply to A) a hedge fund. B) an issuer that would be an investment company, as defined in section 3 of the Investment Company Act of 1940, but for section 3(c)(1) or 3(c)(7) of that act. C) a leveraged ETF. D) a venture capital fund. None 59. If an investment adviser files an initial registration with a state on June 30, which of the following statements regarding the filing fee to be paid is TRUE? A) The fee will be prorated from the filing date. B) No filing fee is required until December 31. C) The full year's fee must be paid. D) The fee will be prorated from the effective date. None 60. 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) February 28, 2018 B) January 18, 2018 C) March 30, 2018 D) December 31, 2017 None 61. 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) 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) Foster Advisers is required to register with the Administrator of the New Jersey Department of Securities. C) 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. D) Foster Advisers is required to register with both the SEC and the Administrator of the New Jersey Department of Securities. None 62. 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) 5 years after the dissolution B) 5 years from the date of organization C) 3 years after the dissolution D) the lifetime of the firm None 63. Under the Investment Advisers Act of 1940, an adviser's registration usually becomes effective how many days after it is filed? A) 20 B) 10 C) 45 D) 30 None 64. The document that gives the Administrator the right to process complaints against a registrant is known as A) an injunction B) a consent to service of process C) a writ of habeas corpus D) a durable power of attorney None 65. One of the exemptions from registration under state and federal law applies to investment advisers to private funds. One characteristic of all private funds is that A) their advisers are exempt from filing reports on Form ADV B) they have assets of less than $150 million C) they are not registered as investment companies D) they have no more than 100 investors None 66. A consent to service of process required by an Administrator is A) an agreement to perform all services and duties that the Uniform Securities Act (USA) requires of those individuals covered by the USA B) a formal statement declaring that an investment adviser will comply with all advertising requirements of the USA C) a legal procedure that authorizes the Administrator to issue injunctions D) 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 None 67. The National Securities Markets Improvement Act of 1996 (NSMIA) A) overcame the restrictions of selling securities in interstate commerce B) defined the term ""federal covered adviser"" C) created the concept of fraud, as used in the Uniform Securities Act D) created a national market system None 68. Federally registered investment advisers are obligated to maintain certain books and records as specified by the SEC. Which of the following statements regarding adviser recordkeeping is NOT true? A) Records originally created on computer may be stored in electronic media. B) Records must be kept for 6 years. C) Written records may be reduced to microfilm. D) Records are subject to surprise audits by the SEC. None 69. Under the NASAA Model Rule on financial requirements for investment advisers, investment advisers who have custody of customer funds are usually required to have a net worth in the amount of A) $35,000 B) $10,000 C) $50,000 D) $5,000 None 70. On last year's annual updating amendment filed with the SEC, Alpha Investment Advisers indicated that it had more than $140 million in assets under management. Due to a reduction in the size of the firm, this year's annual updating amendment shows that assets under management have fallen to the $75 million level and are expected to remain there. Which of the following actions are required for Alpha? A) Withdraw from SEC registration within 90 days of the adviser's fiscal year-end B) Withdraw from SEC registration immediately C) Do nothing and continue as a federal covered adviser D) Withdraw from SEC registration within 180 days of the adviser's fiscal year-end None 71. According to the Investment Advisers Act of 1940, for how many years must books and records be maintained for an account after the end of the year in which the last transaction occurred? A) 2 years B) 10 years C) 1 year D) 5 years None 72. Certain documents belonging to a federal covered investment adviser must be kept for a period of time after the enterprise closes. Those documents are A) sent to the SEC for safekeeping B) sent to the Administrator for safekeeping C) required to be shredded D) the responsibility of the investment adviser None 73. Under the Investment Advisers Act of 1940, for how many years must records be kept after the end of the fiscal year in which an entry was made? A) 2 years B) 10 years C) 1 year D) 5 years None 74. Under the Uniform Securities Act, which of the following is an investment adviser? A) A firm with no office in the state that has provided specific investment advice to 10 noninstitutional clients within the state during the past 12 months B) An investment adviser representative C) An individual who provides financial advice over the Internet with no recommendations based on specific investment situations of individual clients D) A broker-dealer who receives no compensation for investment recommendations None 75. All of the following are exempt from registration requirements with the SEC under the Investment Advisers Act of 1940 as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 EXCEPT A) an adviser with 50 clients, none of whom is a private fund, all within one state, that furnishes no advice on exchange-listed securities B) someone who gave investment advice to 11 private funds throughout the Midwest last year and has total assets under management of $120 million C) investment advisers whose only clients are insurance companies D) investment advisers with $110 million or more in assets under management None 76. The term "federal covered investment adviser" would apply to a person who A) limits the advice offered strictly to securities listed on the New York Stock Exchange (NYSE) B) limits the advice offered strictly to securities issued or guaranteed by the U.S. government or 1 of its political subdivisions C) is registered as such under the Investment Advisers Act of 1940 D) is registered as such under the Investment Company Act of 1940 None 77. Investment advisers who manage investment portfolios that total less than $100 million must register with A) the SEC only B) both a state and the SEC C) a state only D) neither the SEC nor a state None 78. All of the following information is required on the SEC registration Form ADV EXCEPT A) the name of the adviser's business B) the personal securities holdings of the principalsof the firm C) the basis on which the adviser will be compensated D) the form of business organization None 79. 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) the date the Administrator approved the research report B) a memorandum describing the list and its source C) a copy of the full roster of the local chapter D) the names of those members to whom the report was sent None 80. Which of the following firms in the business of rendering investment advice for compensation would be considered a federal covered adviser? A) JKL Pension Consultants, a management firm providing services to employee benefit plans, and currently has $179 million under management B) ABC Money Managers, a partnership with $115 million under management C) GHI Consultants, a sole proprietorship, managing $82 million belonging to high-net-worth individuals D) DEF Fund managers, a corporation managing an unregistered hedge fund with $10 million in assets None 81. When filing the consent to service of process, which of the following is TRUE? A) It is not required of investment adviser representatives, only investment advisers. B) It is supplied with the initial registration and remains on file permanently. C) It expires simultaneously with the registration on December 31. D) It must be filed annually on the dates specified by the Administrator. None 82. The SEC requires investment advisers registered under the Investment Advisers Act of 1940 to maintain certain books and records for a minimum of A) 6 years B) 3 years C) 1 year D) 5 years None 83. All of the following statements regarding the registration of an investment adviser in a state are true EXCEPT A) if the investment adviser is not an individual, any officer or partner active in the advisory business is automatically registered as an investment adviser representative B) the annual renewal process involves payment of the appropriate fees and refiling of the consent to service of process C) the initial application must include a consent to service of process along with Form ADV and the appropriate fees D) the adviser's registration expires on December 31 each year None 84. Under the Uniform Securities Act, which of the following statements is TRUE regarding registration of an investment adviser if the application has not been amended? A) Unless specified earlier, registration becomes effective no later than 90 days after the application is filed. B) Unless specified earlier by the Administrator, the registration becomes effective no later than noon on the 30th day after application. C) Unless specified earlier, registration becomes effective no sooner than 15 days after the application is filed. D) Unless specified earlier by the Administrator, the registration becomes effective at noon on the 60th day after application. None 85. The powers of the Administrator include the ability to determine A) minimum net worth requirements for agents who exercise discretion B) minimum net worth requirements for investment advisers C) surety bond requirements for investment advisers who do not exercise discretion or maintain custody D) maximum net capital requirements for broker-dealers None 86. Under the terms of the Uniform Securities Act, which of the following is an investment adviser for purposes of state regulatory jurisdiction? A) A federal covered adviser with clients in the state B) An investment advisory subsidiary of a bank holding company located in the state that manages $20 million in assets C) An accountant located in the state who offers general securities advice as an incidental part of his business D) A commercial bank with a place of business in the state that advises clients on banking matters None 87. Under both state and federal law, the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and coordinate the activities of the investment adviser is properly referred to as A) the registered office B) the home office C) the office of supervisory jurisdiction (OSJ) D) the principal office and place of business None 88. Under the Uniform Securities Act, Paul must register as a state-registered investment adviser if he A) opens an investment advisory business as a sole proprietor in New Jersey with the intention of advising individual clients on the advisability of investing in securities. Paul will have $100 million in AUM within 120 days of opening. B) becomes a full-time employee of AAA Investment Advisers, Inc., where he will advise clients whose assets under his discretion will exceed $200 million C) sells registered securities on a commission basis for a registered broker-dealer D) opens an investment advisory business as a sole proprietor in New Jersey with the intention of advising individual clients on the advisability of investing in securities. Paul will have $90 million in AUM within 120 days of opening. None 89. An agent and a broker-dealer maintain wrap fee accounts for several of their customers. Which of the following registrations is required? A) The firm must register as an investment adviser. B) Neither the broker-dealer nor the agent is required to have any license other than their regular securities license. C) The agent must be registered as an investment adviser. D) Only the registered principal would need to be registered in the state(s) in which they do business. None 90. Under the Uniform Securities Act, when must a consent to service of process be filed with the Administrator? A) With the original application and renewal B) It need not be filed, unless requested by the Administrator C) With the original application only D) When a case is pending None 91. Which of the following is NOT included in Form ADV Part 2A? A) States in which the investment adviser is registered or intends to register B) Investment policy of the adviser C) Types of investments made by the adviser D) A description of how the adviser is compensated None 92. ABC Advisers, a federal covered investment adviser, is moving the firm's headquarters to a new office park in the suburbs. ABC is required to file this change with the SEC A) within 90 days B) promptly C) within 60 days D) within 30 days None 93. An investment adviser (IA) has its primary office in State A. They have branches in states B and C, and they advertise in states D, E, and F. What net capital requirements must they meet? A) Whichever state is the highest B) Where its principal office is located C) The state where the largest number of its clients reside D) All the states combined None 94. Under the Uniform Securities Act, the recordkeeping requirements established by the Administrator for out-of-state investment advisers wishing to register in his state are subject to the limitations of A) the Investment Advisers Act of 1940 B) the requirements set by the Administrator of the adviser's home state C) the Securities and Exchange Act of 1934 D) the requirements set by each individual state None 95. A firm is registered as an investment adviser under the Investment Advisers Act of 1940. It has decided to raise its annual management fee from $1,500 to $1,800 and require that it be paid 1 year in advance instead of quarterly. The firm would A) need SEC permission to make this change B) be in violation of the law that prohibits pre-payments more than 6 months in advance C) now come under the requirement to include a balance sheet as part of its brochure D) continue doing business as before because the firm was already charging more than $1,200 per year None 96. Registration with the state as an investment adviser would be required for a person with an office in this state who A) only gives advice on securities issued by or guaranteed by the government of the United States B) manages the portfolio of the KPF Balanced Fund, a registered open-end investment company with $22 million in net assets C) manages $13 million in assets for 4 clients D) serves as a pension consultant to the XYZ Employees Retirement Plan, covering 1,200 employees with total assets of $278 million None 97. Long-Term Financial Solutions, Inc. (LTFSI), an investment adviser registered in five states, files a Form ADV-W indicating the business is closing. It is being acquired by another federal covered adviser, Gold and Sylver Advisers, LLC. Which of the following statements is correct? A) Gold and Sylver will not have to amend their Form ADV Part 1 until the filing of their annual updating amendment. B) LTFSI is responsible for ensuring that a copy of the LTFSI corporate charter is preserved for at least three years after the acquisition. C) As the successor firm, Gold and Sylver Advisers must keep copies of the LTFSI corporate charter for at least three years after LTFSI’s acquisition. D) Gold and Sylver must notify all clients of LTFSI that their advisory contracts have been assigned. None 98. If a federal covered adviser's fiscal year ends on October 31, 2017, it must file its annual updating amendment to its Form ADV no later than A) January 29, 2018 B) December 31, 2017 C) March 30, 2018 D) February 28, 2018 None 99. 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) 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 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) the private fund adviser must have less than $110 million in private fund assets under management D) neither the private fund adviser nor any of its advisory affiliates have been convicted of a felony within the past 12 years None 100. With regard to the keeping of records, the Uniform Securities Act states that investment advisers must keep records for A) 5 years B) 3 years, the first 2 in the principal office of the adviser C) 5 years, the first 2 in the principal office of the adviser D) 3 years None 1 out of 100 Time is Up! Time's upTime is Up!
