AWMA Module 8 Quiz
The provision that certain mutual fund policies cannot be changed without shareholder
approval is addressed in the
A) Investment Company Act of 1940.
B) Securities Exchange Act of 1934.
C) Investment Advisers Act of 1940.
D) Securities Act of 1933. - ANS-A) Investment Company Act of 1940.
The regulation of mutual funds is covered in the Investment Company Act of 1940.
A major responsibility of FINRA is
A) developing rules and regulations for its members.
B) establishing rules for issuing new securities in primary markets.
C) insuring customer accounts in the event of the liquidation of brokerage firms.
D) registering agents of broker-dealers to do business with the public. - ANS-A)
developing rules and regulations for its members.
FINRA is the largest securities industry self-regulating organization and, therefore,
develops rules and regulations for its members.
Regulatory and industry developments regarding fiduciary advice provided by
investment advisers, and the enactment of Regulation Best Interest will most likely
A)
decrease client expectations of brokers and advisers and fees will stay about the same.
B)
increase client expectations of brokers and advisers and put downward pressure on
fees.
C)
have very little impact on client expectations of brokers and advisers or on any fees
being charged.
D)
increase client expectations and will likely result in higher fees being charged. - ANS-B)
increase client expectations of brokers and advisers and put downward pressure on
fees.
The bar is being raised since there is increasing public awareness of the differences
between fiduciary and nonfiduciary advice. The enactment of Regulation Best Interest
has raised the bar and increased expectations of broker-dealers. The SEC has also
released guidance on the fiduciary duties that advisers owe to their clients. These
, developments will increase client expectations of brokers and advisers and put
downward pressure on fees and the sale of certain products, especially complex high
fee products that are now being discouraged.
Which act repealed a prohibition that had been in place preventing financial institutions
from offering a combination of commercial banking, investment banking, and insurance
services?
A)
Gramm-Leach-Bliley Act of 1999
B)
USA Patriot Act of 2001
C)
Commodity Futures Modernization Act of 2000
D)
Securities Acts Amendments of 1975 - ANS-A)
Gramm-Leach-Bliley Act of 1999
The Gramm-Leach-Bliley Act of 1999, also known as the Financial Services
Modernization Act, repealed the part of Glass Steagall that had previously prohibited
financial institutions from consolidating and offering a combination of commercial
banking, investment banking, and insurance services.
The Employee Retirement Income Security Act (ERISA) was primarily passed because
of concern regarding the integrity and safety of
A)
employer-sponsored retirement plans.
B)
employee wages and benefits.
C)
employee working conditions.
D)
employer-sponsored insurance benefits. - ANS-A)
employer-sponsored retirement plans.
ERISA was the direct result of concern over the safety and integrity of workers'
company retirement plans.
An investment professional who reads investment journals is complying with the
A)
duty to keep current.
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