NCLEX RN Practice Exam 2 Welcome to your Series 66 Practice Exam 5 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 investor's required rate of return is 6%. If the internal rate of return of the investment offered is 6%, then the NPV is A) 6% B) negative C) zero D) positive None 2. The present value of a dollar A) is the amount of goods and services it will buy in the future at today's rate price level B) cannot be calculated without knowing the level of inflation C) indicates how much must be invested today at a given interest rate, to equal a specific cash value in the future D) is equal to its future value if the level of interest rates stays the same None 3. The present value of a dollar A) indicates how much needs to be invested today at a given interest rate to equal a specific cash value in the future B) is the amount of goods and services the dollar will buy in the future at today’s rate price level C) cannot be calculated without knowing the level of inflation D) is equal to its future value if the level of interest rates stays the same None 4. The Smiths are saving money for a down payment on a house. The Smiths have $25,000 in cash, and they estimate that in 5 years they will have approximately $31,000 if they deposit their cash in a savings account that compounds interest yearly. To calculate the $31,000 amount, the Smiths determined A) the internal rate of the return on the $25,000 B) the net present value of the $25,000 C) the present value of $25,000 D) the future value of the $25,000 None 5. Which of the following statements regarding internal rate of return (IRR) is TRUE? A) IRR cannot be used effectively to measure return on investments with even cash flows, such as bonds. B) IRR is a discount rate at which the net present value (NPV) of an investment is equal to zero. C) IRR ignores the time value of money. D) If the IRR is higher than the cost of borrowing to fund an investment, the investment is likely to be unprofitable. None 6. A bond with a par value of $1,000 and a nominal yield of 6% paid semiannually is currently selling for $1,300. The bond matures in 25 years and is callable in 15 years at $1,080. In the computation of the bond's yield to call, which of these would be a factor? A) Present value of $1,080 B) 50 payment periods C) Interest payments of $30 D) Future value of $1,300 None 7. Mr. Beale buys 10M 6.6s of 10 at 67. What will his annual interest be? A) $820.00 B) $660.00 C) $670.00 D) $1,000.00 None 8. What happens to outstanding fixed-income securities when interest rates decline? A) Yields increase B) Prices increase C) No change D) Coupon rates increase None 9. Current market interest rates are 6%. A bond with an 8% coupon would be most likely to have a net present value of zero when the bond is A) called for redemption. B) selling at a discount. C) selling at par. D) selling at a premium. None 10. A bond purchased at $900 with a 5% coupon and a 5-year maturity has a current yield of A) 5.56% B) 7.80% C) 7.40% D) 5.00% None 11. A corporate bond that pays interest semiannually has a par value of $1,000, matures in 5 years, and has a yield to maturity of 10%. What is the value of the bond today if the coupon rate is 8%? A) $1,221.17 B) $922.78 C) $1,144.31 D) $1,051.23 None 12. Mitch purchased a 30-year bond for 97¾ with a stated coupon rate of 8.5%. What is the approximate yield to maturity for this investment if Mitch receives semiannual coupon payments and expects to hold the bond to maturity? A) 8.50% B) 4.36% C) 5.68% D) 8.67% None 13. Which of the following expressions describes the current yield of a bond? A) Annual interest payment divided by par value B) Yield to maturity divided by current market price C) Annual interest payment divided by current market price D) Yield to maturity divided by par value None 14. A customer purchased new issue bonds at par 2 years ago. Since then, the CPI has declined by almost half and the current yield on his bonds has also declined. Which of the following best describes the value of the bonds he purchased? A) Their market price has increased. B) Their market price has declined. C) This cannot be determined from the information presented. D) Their market price has remained unchanged. None 15. On the initial public offering, an investor buys a $10,000 Aa-rated, 20-year corporate bond with a 4% coupon rate. One year later, the prevailing market rate is 5% and the bond has had its rating increased to Aa1. Which of the following is most likely TRUE with reference to the current market price of this bond? A) Premium B) Discount C) Cannot be determined from the information given D) Par value None 16. The current yield on a bond with a coupon rate of 5.5% selling at 110 is A) 5.5% B) 6% C) 2% D) 5% None 17. A bond's yield to maturity is A) the annualized return of a bond if it is held to call date B) the annualized return of a bond if it is held to maturity C) determined by dividing the coupon rate by the bond's current market price D) set at issuance and printed on the face of the bond None 18. The price of which of the following will fluctuate most with a change in interest rates? A) Short-term bonds B) Common stock C) Money market instruments D) Long-term bonds None 19. A bond is selling at a premium over par value. Therefore, its A) current yield is less than its nominal yield B) none of the above C) yield to maturity is greater than its current yield D) nominal yield is less than its current yield None 20. Richard purchased a 30-year bond for 103½ with a stated coupon rate of 8.5%. What is the approximate yield to maturity for this investment if Richard receives semiannual coupon payments and expects to hold the bond to maturity? A) 8.50% B) 9.36% C) 8.19% D) 8.68% None 21. A bond offered at par has a coupon rate A) greater than its yield to maturity B) equal to its current yield C) less than its current yield D) less than its yield to maturity None 22. The current yield of a callable bond selling at a premium is calculated A) to its maturity date B) as a percentage of its market value C) as a percentage of its call price D) as a percentage of its par value None 23. A customer buys a 10-year 6% AAA bond at par when it was issued. Two years later, if the CPI has increased from 2% to 4%, the price of the bond most likely A) has stayed at par B) has increased C) cannot be determined D) has declined None 24. A $1,000 bond with a nominal yield of 8% will pay how much interest each year? A) $80.00 B) $40.00 C) $800.00 D) $160.00 None 25. A corporation issued a bond with a coupon of 6%, callable at 103. The bond matures in 2059. Current interest rates are 8%. It is most likely that A) the bond is selling at a discount. B) the bond will be called. C) the coupon will be increased. D) the bond will go into default. None 26. Your firm onboards a new investment advisory client. Which of the following would be the most appropriate way to obtain information about the client's objectives and constraints? A) Face-to-face meeting at the client’s home B) Interview with the client’s neighbors C) Monitoring the client’s Tweets D) Client’s LinkedIn page None 27. John and his sister, Alice, open a margin account as JTWROS. John contributes $50,000, and Alice contributes $25,000. They have agreed that Alice will trade the account, and they will share in the profits and losses equally. As their agent, you would gather information regarding suitability for A) either, because in a JTWROS account the owners share equally B) John, because he has made the larger contribution C) both, because information regarding all owners is relevant D) Alice, because she will be trading the account None 28. An adviser always inquires into her clients' investment objectives, financial situations, and needs. The investment adviser is A) determining whether she has any inherent conflicts of interest with her clients B) violating her ethical obligation regarding confidentiality of client information C) obtaining the information required to fulfill her professional obligation regarding suitability D) giving herself an unethical advantage regarding how much the client can afford to spend on an advisory fee None 29. An investment adviser would be least likely to gather information about a new client A) from social media. B) during a face-to face interview. C) on a smartphone app. D) by using a questionnaire. None 30. If an investment adviser uses a client questionnaire to determine a client's financial situation, the adviser is A) acting ethically, as the information is necessary to determine the suitability of recommendations B) acting correctly to determine if a conflict of interest exists C) acting unethically, as client information is confidential D) acting unethically, as this information may be used to determine how large an advisory fee to charge None 31. Rendering investment advice requires knowing certain information about your client. Which of these would be the least reliable source of that information? A) Client’s income tax returns B) Face-to-face meeting with the client C) Your firm’s confidential planning questionnaire D) Client’s Facebook page None 32. An investment adviser would be least likely to gather financial planning information about a client from A) a 2-hour lunch meeting. B) a detailed financial planning questionnaire. C) the client’s Tweets. D) an hour-long WhatsApp chat. None 33. John and Jane have a net worth of $20,000 and total assets of $150,000. If their revolving credit and unpaid bills totals $8,000, how much are their total liabilities? A) $138,000 B) $130,000 C) $150,000 D) $122,000 None 34. An investment adviser is conducting the initial meeting with a new advisory client. Which of the following is least necessary when gathering information necessary to fulfill the engagement? A) Determining which securities to purchase for the client’s investment portfolio B) Inquiring about the number of dependents C) Collecting personal financial information D) Inquiring about the age or dates of birth of dependents None 35. An individual's net worth is A) the difference between the individual's assets and the individual's liabilities B) largely irrelevant in identifying the individual's investment objectives C) another term for discretionary income D) best determined by examining the individual's personal income statement None 36. An investment adviser should develop an investment policy based on the needs and objectives of the client. When the client is a business entity structured as a general partnership, the investment policy would have to consider A) the number of limited partners B) the mean requirement of the wealthiest and the poorest partner C) the liability of the general partner D) the objectives of all the partners on a collective basis None 37. An individual owns assets worth $500,000 and has debts of $300,000. What is the individual's net worth? A) $300,000.00 B) $500,000.00 C) $800,000.00 D) $200,000.00 None 38. An investment adviser representative is preparing a financial plan for a new client. As part of the data collection process, the IAR needs to collect the relevant information to analyze the client's cash flow. Included in the cash flow statement would be all of the following EXCEPT A) salary B) income taxes. C) assets D) interest on savings None 39. A business organized as a sole proprietorship wishes to open an advisory account. When preparing an investment policy statement, the IA would have to consider the objectives of A) the members B) the partners C) the sole proprietor D) the stockholders None 40. For which of the following business entities would suitability be based on the objectives of all the owners on a collective basis? A) Pension plan B) General partnership C) C corporation D) Sole proprietorship None 41. The Jones family has scheduled an initial visit with a financial planner. Mr. Jones has an annual salary of $70,000, and this is their first attempt at financial planning. Which of the following should be the first step taken by the financial planner? A) Determine a reasonable fee for designing the plan B) Set goals and dates for reaching them C) Pay off credit card debt D) Establish an emergency fund None 42. Which of the following items is NOT necessary to establish before helping a client open an investment account? A) Zero balance on all credit cards B) Emergency fund C) Established short- and long-term investment goals D) Adequate life insurance None 43. To maintain the proper portfolio balance for a client, it would be most appropriate to review the portfolio at least A) every 10 years B) every two years C) client and portfolio review is not necessary D) annually None 44. Which of the following items would be found on a family balance sheet? A) Annual salary B) Income taxes paid C) Dividends and interest received D) Spouse’s engagement ring None 45. An individual's net worth is A) another term for discretionary income B) the difference between the individual's assets and the individual's liabilities C) best determined by examining the individual's personal income statement D) largely irrelevant in identifying the individual's investment objectives None 46. From your meetings with Avery, you realize there is a tendency to follow the actions of a larger group of people when making financial decisions. It makes no difference if those actions are rational or not. Choose the behavioral finance theory that explains Avery's behavior. A) Confirmation bias B) Herding C) Anchoring D) Overconfidence None 47. Your client often makes irrational financial decisions because she bases her decisions on information that should have no influence on the decision at hand. The client's behavior is known as A) overconfidence. B) confirmation bias. C) anchoring. D) herd mentality. None 48. The study of why people often make decisions using rules of thumb rather than rational analysis, basing those decisions on factors economists traditionally don't consider, such as fairness, past events, and aversion to loss, is known as A) behavioral finance B) systematic risk C) risk tolerance D) irrational finance None 49. Which of the following is the least significant consideration in making an investment recommendation to a client? A) Age B) Investment objectives C) Net worth D) Education None 50. All of the following statements regarding a client's attitudes, beliefs, and values are correct except A) the IAR should pay little attention to a client’s attitudes, beliefs, and values during the information gathering process. B) the client’s attitudes reflect the client’s opinions, values, and wants. C) beliefs are a type of attitude because they reveal the client’s understanding of some aspect of his life. D) values are attitudes and beliefs for which the client feels strongly. None 51. Pemberton bought a stock share at $50 and wants to earn a profit, so he decided he will never sell it below $52. The company has now underperformed for multiple quarters as per street analysts, and the stock is down to $48. Pemberton continues to hold the stock in line with his original plan. In this case, Pemberton may be exhibiting A) overconfidence bias. B) regret aversion bias. C) herding bias. D) anchoring bias. None 52. Tactical Evaluation and Research (TEAR), a federal covered investment adviser, suggests the purchase of stock in a major tobacco company. The client explains that he doesn't want to invest in tobacco stocks because his father passed away from lung cancer. What kind of reason is this? A) Economic B) Environmental C) Geographic D) Values are attitudes and beliefs for which the client feels strongly. None 53. One of your clients has a tendency to follow the actions of a larger group of people when making financial decisions, whether those actions are rational or not. The client's behavior is an example of A) herd mentality. B) anchoring. C) confirmation bias. D) overconfidence. None 54. Caroline considers her investment skills to be much greater than they actually are. She takes credit for many decisions that have positive results but blames the economy when her investments do poorly. Caroline's behavior is an example of A) regret aversion. B) confirmation bias. C) overconfidence. D) anchoring. None 55. Which economic concept attempts to explain why investors behave irrationally? A) Efficient market hypothesis (EMH) B) Laffer curve C) Modern portfolio theory (MPT) D) Behavioral finance None 56. An investment adviser is eligible to register with the SEC if it A) would be required to register in at least 10 different states B) has more than 100 investment adviser representatives C) anticipates acquiring at least $100 million in assets under management within the next 120 days D) has rendered advice to more than 15 clients during the most recent 12-month period None 57. Platinum Investment in Growth Group, Inc. (PIGGI) is registered in and has its principal office in State W. PIGGI has near-term plans to open offices in State A and B. In an effort to test the waters, PIGGI mails several hundred flyers to prospects in those 2 states. Under the Uniform Securities Act, A) these flyers could be mailed, but no accounts can be opened until PIGGI is registered in States A and B B) as long as PIGGI did not maintain an office in either of these states, the flyers could be mailed C) these flyers could not be mailed until PIGGI was registered in States A and B D) as a federal covered investment adviser, the flyers would need filing with the SEC None 58. A state-registered investment adviser suddenly incurs a liability that materially affects its net worth, causing it to drop below the required minimum. Which of the following statements is TRUE? A) The​ ​investment adviser must notify the Administrator​ by the close of business on the following business day​. B) The ​investment adviser ​must increase its surety bond to make up the deficiency. C) The investment adviser must notify the Administrator promptly. D) The ​investment adviser is not required to file​ ​an amendment to its registration with the Administrator. None 59. Under current regulations, registration with the SEC is optional for all of the following investment advisers EXCEPT A) Grand Visions Advisers, a sole proprietorship with $104 million in AUM B) Midwestern Asset Managers, LLC, with $53 million in AUM, required to register in 17 states C) Employee Benefit Specialists, Inc., a pension consultant with $225 million in AUM D) CEF Investment Managers, LTD., a partnership managing a small registered closed-end investment company traded on the OTC Bulletin Board None 60. USAAdvisers is registered in 10 Midwest states. Regarding financial requirements, USAAdvisers must meet those of A) the state in which its principal office is located B) the SEC. C) each state in which it has a place of business D) the state with the most stringent financial requirements None 61. Under the Uniform Securities Act, which of the following investment advisers with no place of business in the state must register with the state as an investment adviser? A) An adviser rendering advice to employee benefit plans with at least $1 million in assets B) An adviser managing more than $110 million in assets C) An adviser rendering advice to no more than 10 individual clients within a 12-month period D) An adviser rendering advice solely to broker-dealers None 62. Under the Uniform Securities Act, which of the following statements relating to the registration requirements of investment advisers is TRUE? A) A registration is automatically effective at noon, 30 days after the application has been filed. B) If an amendment to the registration is subsequently filed, the registration becomes effective 15 days after the amendment is filed. C) A registration becomes effective at noon, 30 days after the application has been filed, providing the registration is not in the process of denial. D) Registrations of securities professionals expire 1 year after their effective date, unless renewed. None 63. A pension consultant who advises corporate retirement plans with assets of $135 million must register with which of the following? A) SEC B) Both the state and the SEC C) The state D) Either the state or the SEC None 64. A federal covered investment adviser is a person A) registered, or excluded from the definition, under the Investment Advisers Act of 1940 B) registered under the Uniform Securities Act C) registered with North American Securities Administrators Association (NASAA) D) exempt from regulation under the Securities Exchange Act of 1934 None 65. Which of the following investment advisers would be required to register with the state? A) An IA who expects to have $132 million in AUM within 120 days B) An IA whose annual updating amendment showed a drop in AUM from $109 million to $87 million C) An IA who is under contract to manage a registered investment company D) An IA whose annual updating amendment showed a drop in AUM from $141 million to $99 million None 66. Which of the following statements is CORRECT? A) State-registered investment advisers who have custody of clients' securities are required to provide audited balance sheets to their clients. B) Both state-registered and federal covered investment advisers who have custody of clients' securities are required to provide audited balance sheets to their clients. C) Federal covered investment advisers who have custody of clients' securities are required to provide audited balance sheets to their clients. D) A state-registered investment adviser collecting fees of $500 for 6 months or more in advance, is considered to be receiving a substantial prepayment. None 67. In which of the following cases would the Uniform Securities Act require registration of an investment adviser who had no place of business in the state? A) He had more than 5 noninstitutional clients who were residents of the state. B) Under no circumstances is registered required if there is no place of business in the state. C) He had more than 5 institutional clients domiciled in the state. D) His website was seen by residents of the state. None 68. Under the Uniform Securities Act, which of the following must register with the state securities Administrator? A) Investment advisers to an investment company registered under the Investment Company Act of 1940 B) Investment advisers who have $100 million or more under management C) Investment advisers with a place of business in the state and less than $100 million in assets under management D) Investment advisers without an office in the state whose clients are exclusively insurance companies None 69. A federal covered IA files a petition for bankruptcy. The firm must A) do nothing until the court decides the disposition of the firm's assets B) notify the Administrator immediately C) notify the SEC immediately D) notify all of its clients immediately None 70. Which of the following is required to register as an investment adviser with the state securities Administrator? A) The author of a book on money and banking that was sold to residents of the state in which it is published B) A person with no office in the state whose only advisory clients are investment companies and banks in the state C) A newly formed investment advisory firm with $145 million in assets under management D) An investment advisory firm that opens an office in the state with less than $100 million in assets under management None 71. The USA places a number of recordkeeping requirements on investment advisers. Records required to be kept by all state-registered investment advisers include all of the following EXCEPT A) a list of discretionary accounts B) a record by security showing each client's interest and location thereof C) bank records D) emails None 72. Under the Uniform Securities Act, if not denied, an application for registration as investment adviser will generally become effective how soon after filing? A) 15 days B) 30 days C) 10 days D) Immediately None 73. Which of the following firms would be a federal covered adviser? A) XYZ Broker-Dealer with custody over $50 million of clients' invested assets B) DEF Fund Managers, a corporation managing an unregistered hedge fund with $20 million in assets C) ABC Money Managers, a partnership with $112 million under management D) GHI Consultants, a sole proprietorship managing $15 million belonging to high-net-worth individuals None 74. 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) 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) Peterson is required to register as an adviser with both the SEC and the Administrator of the Missouri Department of Securities. C) Peterson Financial Planning is required to register as an adviser with the Administrator of the Missouri Department of Securities. D) 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. None 75. Which of the following would meet the USA's definition of federal covered adviser? An investment adviser who A) is registered under section 203 of the Investment Advisers Act of 1940 B) does business on an interstate basis C) gives advice on federal covered securities D) serves as a consultant to pension funds with assets of $500 million None 76. Create A Large Legacy (CALL), Inc., is a state-registered investment adviser with offices in States X, Y, and Z. CALL currently does not have a place of business in State W, but does have 5 retail clients who are residents there. Opening an account for which of the following prospective clients domiciled in State W would now require CALL to register in State W? A) A small community bank depositing $500,000 B) An insurance company account with an opening balance of $750,000 C) A county in State W desiring advice on investment over $250,000 of surplus funds D) A trust having 4 minor children as beneficiaries with total trust assets of $5 million None 77. Under the Investment Advisers Act of 1940, an adviser is required to be registered with the SEC if A) the adviser's advice relates solely to securities issued or guaranteed by the U.S. government. B) the adviser's clientele is exclusively federal credit unions and the adviser has less than $100 million in assets under management C) the adviser is the publisher of a news magazine of general and regular circulation D) the adviser's clients are investment companies registered under the Investment Company Act of 1940 None 78. A person may NOT engage in business as an investment adviser in a state unless A) organized as a corporation or partnership B) the person is registered as a broker-dealer C) the person's only accounts are investment companies D) the person is registered as an investment adviser or is otherwise exempt from registration None 79. Registration with the SEC as an investment adviser would be required for a person who A) limits the advice offered strictly to securities issued or guaranteed by the U.S. government B) limits the advice offered strictly to securities listed on the New York Stock Exchange (NYSE) C) acts as the investment adviser to an investment company registered under the Investment Advisers Act of 1940 D) acts as the investment adviser to an investment company registered under the Investment Company Act of 1940 None 80. Under the NASAA Model Rule on financial requirements for investment advisers, unless an exception exists, investment advisers who have discretionary powers but NOT custody of customer funds are usually required to have a net worth in the amount of A) $10,000.00 B) $5,000.00 C) $50,000.00 D) $35,000.00 None 81. Under the Investment Advisers Act of 1940, for how many years must an investment adviser maintain the records required by regulation? A) No requirement B) 5 years C) 3 years D) 1 year None 82. 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) December 31, 2020 B) January 31, 2020 C) January 31, 2017 D) December 31, 2017 None 83. Serenity Strategic Investments (SSI) is an investment adviser registered in four states. SSI's most previous annual updating amendment showed AUM of $108 million. Six months later, a favorable market resulted in SSI's AUM growing to $120 million. Unfortunately, several large clients left, so at the end of SSI's year, its AUM was down to $94 million. Which of the following statements is CORRECT? A) SSI remains state-registered because its AUM is less than $100 million. B) SSI must become registered with SEC within 90 days of exceeding $110 million. C) SSI has the choice of remaining state-registered or registering with the SEC. D) SSI may remain SEC registered as long as AUM is at $90 million or more. None 84. On April 15, ABC Advisers, Inc., made application for registration as an investment adviser with State X. Absent a denial or stop order, registration will become effective A) May 1 B) April 30 C) April 15 D) May 15 None 85. 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) do nothing, as their net worth is far in excess of the minimum requirement of $10,000 B) send a detailed financial report to the Administrator by the close of business Monday C) need to increase the amount of their surety bond D) send a detailed financial report to the Administrator by the close of business Friday None 86. Under the Uniform Securities Act, most books and records of investment advisers must be maintained for A) 3 years, the first 2 in the firm’s principal office B) 2 years C) 1 year D) 5 years, the first 2 in the firm’s principal office None 87. 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) any information to be furnished or disseminated to any client or prospective client. B) the appropriate fees. C) a consent to service of process. D) a copy of the articles of incorporation for the business. None 88. ABC Advisers changes its name to XYZ Advisers and also changes its location. Under the Investment Advisers Act of 1940, it must A) amend Form ADV promptly B) notify FINRA within seven days C) notify the Administrator D) amend Form ADV in advance None 89. Emmet opened an investment advisory service 3 years ago and raised $50 million in capital from family, friends, and contacts and then closed to new investors. If Emmet's stock picks expanded assets under management to $110 million, Emmet A) must register for the first time with the state Administrator B) is not required to take any action C) must update his registration with the state Administrator D) must register with the SEC None 90. Judy is in the business of giving general investment advice, suggesting appropriate asset allocation percentages, but not recommending specific securities. George's business model is giving investment advice and recommending specific securities. Assuming that both receive compensation, who must register as an investment adviser under the Uniform Securities Act? A) Both B) Neither C) Only Judy D) Only George None 91. Under the Uniform Securities Act, if no denial or proceedings are pending, when does an investment adviser registration become effective? A) No sooner than 15 days B) When the Administrator so orders, but not to exceed 30 days C) When the Administrator so orders, but not to exceed 90 days D) 60 days after application or an amendment is filed None 92. Each of the following statements about postregistration provisions is true EXCEPT A) a correcting amendment to the Form ADV must be filed with the Administrator if any information filed becomes inaccurate or incomplete B) the securities Administrator does not have the authority to conduct an onsite examination of an investment adviser registered in his state if the adviser does not have an office in that state C) a registered investment adviser may be required to file advertisements D) investment advisers must comply with recordkeeping rules None 93. The agreement that the Administrator can receive subpoenas on behalf of a registered agent, broker-dealer, or investment adviser involved in any securities sale that violates the Uniform Securities Act is A) the consent to service of process B) the right of rescission C) the agreement to actionable offenses D) the right of retribution None 94. 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) the SEC B) the state with the most stringent financial requirements C) each state in which it has a place of business D) the state in which its principal office is located None 95. Jefferson, Adams, and Washington (JAW) is a pension consulting firm whose only office is on Constitution Avenue in Washington, D.C. JAW has only one advisory client—a U.S. government employees pension fund with assets of $4 billion. What are this firm's registration requirements? A) It must register with the SEC because the AUM is so high. B) It does not have to register because its only client is the U.S. government. C) It may choose to register with either the D.C. Administrator or the SEC. D) It can only register with the SEC because the District of Columbia is not a state. None 96. 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) 60 B) 90 C) 30 days D) 45 None 97. Under the Uniform Securities Act, all of the following are exempt from state registration as investment advisers EXCEPT A) publishers of financial publications that are not addressed to clients' specific individual investment situations B) financial planners who provide fee-based investment advisory services to clients C) investment advisers with no office in the state who only advise employee benefit plans with assets of more than $1 million D) investment adviser representatives None 98. Under certain conditions, the Uniform Securities Act provides that an Administrator may require a minimum net worth standard be met by an investment adviser. Which of the following would be an allowable asset in the computation of an investment adviser's net worth? A) Advances or loans to partners in the case of an IA organized as a partnership B) Copyrights C) Accounts payable D) Accounts receivable None 99. A state-registered investment adviser with discretionary authority over client accounts discovered on Monday, that the firm's net worth is below the required amount. He must notify the administrator and then file a report no later than the A) close of business Monday, close of business Friday B) close of business Monday, close of business Wednesday C) close of business Tuesday, close of business Friday D) close of business Tuesday, close of business Wednesday None 100. The chief compliance officer (CCO) of a registered investment adviser would generally not have responsibility for the actions of A) ministerial personnel of the firm. B) an agent registered with an affiliated broker-dealer. C) supervisory personnel of the firm. D) an investment adviser representative of the firm. None 1 out of 100 Time is Up! Time's upTime is Up!
