Which of the following are required to open a margin account?
I. Customer loan agreement
II. Margin risk disclosure
III. Margin account agreement
IV. Margin interest disclosure correct answers A) I and III- Customer loan agreement, margin account agreement
Andrew is an agent who has done ext...
which of the following are required to open a marg
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Which of the following are required to open a margin account?
I. Customer loan agreement
II. Margin risk disclosure
III. Margin account agreement
IV. Margin interest disclosure correct answers A) I and III- Customer loan agreement, margin
account agreement
Andrew is an agent who has done extensive personal research on XYZ Industries, a
pharmaceutical company. ANdrew wants to take advantage of what he considers an excellent
growth opportunity by purchasing XYZ inc at the current market price; however, he has limited
funds to do so. Under what circumstances may ANdrew borrow funds from his clients to make
the trade? correct answers A) He may borrow the funds from any client that is an affiliate of the
Investment Adviser and is willing to make the loan.
WHich of the following are defined as federal covered securities?
I) Securities issued by investment companies registered under the Investment Company Act of
1940;
II) Municipal securities sold outside the state of issue;
III) Securities listed on the NYSE correct answers All are federal covered; municipal securities
are only exempt outside the state of issue, and are nonexempt or not federal covered within the
state of issue.
What is the key difference between the recordkeeping requirements for a BD and an IA? correct
answers B) A broker dealer may keep records in any form of data storage that is accessible to the
administrator and permitted under the SEC of 1934; however, investment advisers are required to
use storage methods approved by the SEC or the USA.
WHich best describes the conditions under which an agent may be associated with more than 1
BD at the same time? correct answers A) the administrator allows multiple registrations and the
agent files a separate application through each firm.
An appeal of a State administrators decision must be filed correct answers D) within 60 days
When does the administrator have the right to subpeona the records of an agent or BD? correct
answers If there is suspicion that a violation has occurred
FOr equipment trust cetificates and other collateralized securities, the issuer is correct answers
The person who owns the equipment
Individuals are NOT considrered agents when effecting which of the following securities
transactions?
I) Transactions with a trust company
II) trades in Canadian government securities
III) Representing a BD in the sale of US government securities
, IV) Private placement transactions correct answers I, II and IV
I) Transactions with a trust company
II) trades in Canadian government securities
IV) Private placement transactions
A CPA for CYZ Corp knew in advance that XYZ would report a quarterly earnings loss. Based
on this knowledge and proir to the release of the company's quarterly earnings report, the CPA
sold short a large block of XYZ stock which drove down the price of the stock. ANother investor
who had entered an order to sell XYZ at the market around the same time sold at a very low
price due to CPAs block trade. What legal recourse does the investor have against this CPA?
correct answers A) File a lawsuit for damages. THis is an example of contemporaneous trading;
investors who are harmed by insider trading can sue the violator for damanges.
A customer's right to be indemnified if defrauded in a securities transaction is known as the right
of correct answers Recission
When an entity makes a market in a particular security, it is deemed to be acting as correct
answers A principal
An agent hears a rumor concerning an investment and uses the information to influence a
customer who has hesitated to make a purchase. Which of the following statements is true?
correct answers Under no circumstance would this be allowed. The use of information that has
no basis in fact is strictly prohibited. The use of rumors is a misrepresentation and a violation of
the USA.
Which of the following are true regarding investigations conducted by the Administrator under
the USA?
I) Information regarding violations must be kept confidential.
II) Investigations may be conducted across state lines
III ) the administrator may obtain a court order to have a receiver appointed over a violator's
assets. correct answers II & III
II) Investigations may be conducted across state lines
III ) the administrator may obtain a court order to have a receiver appointed over a violator's
assets.
Under the USA, which of the following is/are true about agents sharing profits in a customer's
account?
I) It is prohibited.
II) It is permitted if both the customer and the BD approve.
III) Sharing must be in proportion to the agent's personal contributions.
IV) Sharing agreements must be agreed upon when the account is opened. correct answers II
only-
An agent may establish a joint account with a customer as long as both the customer and the
agent's employing BD agree.
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