TEAS Mathematics: Measurement and Data (Quiz 2) Welcome to your Series 63 Practice Quizzes. Note: We designed four (4) parts of practice quizzes for each Domain. Each quiz part has 25 questions. Domain 1 (part 4): Regulation of Investment Advisers including state-registered and federal covered advisers. (25 questions) Please click NEXT to start your Free Series 63 Practice Quizzes right away. Best of Luck! 1. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 A client of a broker-dealer discovers that the agent handling the account has forged the customer's signature on several checks and taken the money. In the event the agent cannot provide the funds to repay the customer, protection is offered in the form of A) a surety bond. B) a garnishment of the agents pay. C) FDIC insurance. D) a court hearing. None 2. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 As defined in the Uniform Securities Act, every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value is A) an offer. B) a transaction. C) a bid. D) a sale. None 3. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 A broker-dealer has offered a security to a customer. If the customer accepts the offer, the broker-dealer has made A) a purchase. B) an offer to sell. C) a sale. D) a transaction. None 4. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 Which of the following is not a person as defined by the Uniform Securities Act? A) XYZ Dry Cleaners, Inc., whose shareholders all work on the premises and also offer financial advice to customers who request it B) A small city outside of Toronto, Ontario, that maintains an investment account at a brokerage house to invest surplus funds C) A nine-year-old child actor whose earnings exceed $200,000 per year D) A small unincorporated investment club None 5. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 An investment adviser with custody of customer funds and securities must send the customer a statement of account activity no less frequently than A) quarterly. B) annually. C) monthly. D) with every transaction. None 6. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 In instances where an investment adviser has custody or possession of clients' funds or securities, it must comply with A) the NASAA Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers. B) the SEC’s Customer Protection Rule. C) the National Securities Markets Improvement Act of 1996 (NSMIA). D) the NASAA Model Rule on Custody. None 7. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 Under the NASAA Model Rule on Custody, it is unlawful for an investment adviser to have custody of client funds and securities in all of these cases except A) when the investment adviser fails to supply clients, no less frequently than quarterly, with a statement of account activity and the location and value of their assets held in custody. B) if the Administrator in the state prohibits, by rule, investment advisers from having custody. C) when customer funds and securities are kept in the possession of an affiliated broker-dealer. D) in the absence of a rule, an adviser fails to notify the Administrator on Form ADV that it has custody. None 8. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 If the press carried an article about a broker-dealer found guilty of commingling by the SEC, it would likely be in reference to violating A) the Insider Trading and Securities Fraud Enforcement Act of 1988. B) the Customer Protection Rule. C) the Trust Indenture Act of 1939. D) the Net Capital Rule. None 9. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 Under the Uniform Securities Act, when may an investment adviser legally have custody of money or securities belonging to a client? I. When the investment adviser is not bonded II. When the Administrator has not prohibited custodial arrangements III. When the investment adviser does not have discretionary authority over the account IV. When the investment adviser has notified the Administrator that it has custody A) I and III B) I and IV C) II and III D) II and IV None 10. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 The Administrator may, by rule, A) suspend the registration of a federal covered adviser because the firm does not require that its advisory contracts be in writing. B) require an agent to waive provisions of the Uniform Securities Act when it is in the best interest of the customer. C) suspend federal law if the Administrator believes it to be in the public interest. D) require investment advisers registered in that state to provide notice of plans to take custody of client funds. None 11. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 Foster Advisers operates as an investment adviser that is registered in a state where the Administrator, by rule, prohibits investment advisers from holding custody of client funds and securities. This means that Foster Advisers may not I. have physical custody over its clients' monies and certificates. II. manage client accounts on a discretionary basis. III. examine customers' stock certificates. A) I and II B) I and III C) I, II, and III D) I only None 12. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 An investment adviser may not have custody of a customer's funds and securities under the Uniform Securities Act if A) the customer fails to tell the adviser that it has custody. B) there is a rule in the state barring such custody. C) the adviser is not a registered broker-dealer. D) the customer does not have a wrap fee account. None 13. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 An agent may determine which securities to purchase or sell for a client when A) written discretion authority has been received by the broker-dealer within 10 days of the initial discretionary transaction. B) written or oral discretion authority has been received by the broker-dealer before executing the first discretionary transaction. C) written discretion authority has been received by the broker-dealer before executing the first discretionary transaction. D) written or oral discretion authority has been received by the broker-dealer within 10 days of the initial discretionary transaction. None 14. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 According to the North American Securities Administrators Association's (NASAA's) Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, which of the following practices is not unethical? A) To protect the client in a declining market, an agent sold all shares in the client’s account when the client had only authorized the sale of 30% of the shares. B) An agent sold shares at a price less than authorized by a client. C) Within the first 10 days of a client’s initial transaction, an agent accepted oral discretion and purchased securities on behalf of the client. D) An agent of a broker-dealer exercised discretion in deciding the time that a sale took place during the trading day without express written discretionary authority. None 15. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 If an investment adviser maintains custody of customer funds and/or securities, an itemized list of all securities and funds in the adviser's possession must be sent to the client not less frequently than A) annually. B) every 30 days. C) every 3 months. D) semiannually. None 16. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 Under industry regulations, when may an agent be given discretionary power to buy or sell securities for a client? A) If authority is given within one week after the discretionary act B) Only when the authority is specific, provided in advance, and specifies the amount, type, and timing of the transaction C) When authority is given by a written document D) Never None 17. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 Which of the following constitutes a discretionary account? A) The agent’s personal trading account B) An account in which the investor gives the broker-dealer written authority to buy or sell securities C) An account in which the investor gives the broker-dealer authority as to pricing or timing of an investment D) The broker-dealer’s trading account None 18. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 According to the Uniform Securities Act's rules for an investment adviser with custody of customer assets, which of the following statements are true? I. The Administrator must give written approval before the investment adviser may hold customer assets in custody. II. Customer assets must not be commingled with assets of the investment adviser. III. An investment adviser who has discretion over customer accounts is deemed to have custody. IV. Every three months, the investment adviser must send an itemized account statement to each customer whose assets are held in custody. A) I and II B) II and IV C) I and III D) III and IV None 19. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 Over which of the following would the investment adviser representative have discretionary authority? A) An account in which a trustee has power of attorney over another individual’s account B) An account in which a customer has power of attorney over another individual’s account C) An order that specifies the size of the trade and name of the security, but leaves the choice of price or time up to the investment adviser representative D) An account in which the investment adviser representative chooses portfolio securities on behalf of the client None 20. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 The NASAA Model Rule on Custody applies to certain A) investment adviser representatives. B) broker-dealers. C) investment advisers. D) agents. None 21. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 The SEC's Customer Protection Rule is found in A) the Uniform Securities Act. B) the Securities Act of 1933. C) the Securities Exchange Act of 1934. D) the Investment Advisers Act of 1940. None 22. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 An account where a securities professional may invest the client's money without consulting the client about the amount or type of security for the trades that are placed for the account is known as A) a margin account. B) a wrap account. C) a discretionary account. D) an advisory account. None 23. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 The SEC rule designed to safeguard customer securities and funds held by a broker-dealer and to prevent investor loss or harm in the event of a broker-dealer's failure is A) the SEC Net Capital Rule. B) the SIPC insurance program. C) the Customer Protection Rule. D) the Customer Safeguard Rule. None 24. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 All of the following are prohibited actions except A) sharing in profits of an account as a reward for the agent’s recommendations exceeding the S&P 500. B) executing a transaction in a registered nonexempt security in a discretionary account. C) trading in the account of a conservative client exclusively in speculative public offerings with proper trading authorization from the client. D) failing to record exempt transactions on the broker-dealer’s books and records. None 25. Series 63, Regulation of Investment Advisers including state-registered and federal covered advisers,Series 63 In the securities industry, the term discretionary refers to A) an account in which the agent has the power to decide which securities to buy or sell without customer authorization for those specific trades. B) an account in which someone has been given custodial power over another individual’s account. C) an order that specifies size, security, or action but leaves the choice of time or price up to the agent. D) an account in which a person has power of attorney over an incompetent individual’s account. None 1 out of 25 Time is Up! Time's up
