Which of the following actions by an agent would be an unethical practice under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents?
A)
Recommending securities that result in major losses in the customer's account
B)
Telling a customer that th...
Series 65 - Pt 2 || very Flawless.
Which of the following actions by an agent would be an unethical practice under the NASAA
Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents?
A)
Recommending securities that result in major losses in the customer's account
B)
Telling a customer that the investment being recommended will be sold from the inventory of the
broker-dealer and indicating on the trade confirmation that the firm acted in a principal capacity
C)
Splitting commissions with a customer service representative who is not registered but works for
the same firm
D)
An agent with discretionary authority enters a buy order for a security when its price is rising
correct answers C
On the basis of IRS guidelines, which of the following is most likely eligible to contribute to a
Keogh plan?
A)
While employed full time for a major department store, a clerk who won $10,000 playing the
state lottery
B)
A doctor who has formed a professional corporation with three other physicians
C)
A public school teacher who gets paid during her summer vacation to give motivational speeches
to training directors at major brokerage firms
D)
The CEO of a listed corporation who receives a large bonus after an outstanding year correct
answers C - Keogh plans are for self employed individuals
An investor purchased a 2x leveraged ETF at a price of $100 per share. On the first day, the
index was up 10%. On the next day, it was down 10%. The investor's share value is now
A)
$96.
B)
$99.
C)
$101.
D)
$100. correct answers A - On the first day, the value increased by twice the 10% the ETF gained
(20% × 100 = 20). That makes the share value $120. On the second day, the value decreased by
twice the 10% the ETF lost, (20% × 120 = 24). That makes the current value $96.
With regard to an SEC-registered investment adviser employing the services of a promoter to
solicit on its behalf, it would be correct to state that
A)
,cash referral fees may be paid pursuant to a written or oral agreement to which the investment
adviser is a party.
B)
referral fees may be paid only if the promoter is also registered with the SEC.
C)
delivery of the solicitor's brochure must take place within five days after the entry into the
advisory contract.
D)
the investment adviser may not compensate a solicitor who is subject to a statutory
disqualification. correct answers D
Investors seeking current income would benefit from
A)
buying LEAPS
B)
buying U.S. Treasury STRIPS
C)
selling call options
D)
buying periodic payment variable annuities correct answers C
What is the current yield on ABC common stock selling for $60 per share with a semiannual
dividend of $.75 per share?
A)
2.50%
B)
7.50%
C)
5%
D)
1.25% correct answers A - (0.75 x 2) / 60
An investor contacts you somewhat puzzled over the fact that she saw a newspaper listing for the
KAPLOW Fund where the net asset value per share was $10.27 and the asking price was $14.14
per share. She wants to know why the difference between the two is so great. You would
respond, saying
A)
there is probably a misprint in the paper and, more than likely, the asking price is $11.22, making
the sales charge 8.5%
B)
the KAPLOW Fund is being investigated by the SEC for being sold with a sales charge in excess
of the 8.5% maximum limit
C)
the KAPLOW Fund is a closed-end company whose selling price is not based upon NAV, as is
the case with an open-end fund
D)
,that this is probably an unregistered hedge fund not subject to SEC rules correct answers C
Richard, Tim, Sam, and Fred have a regular golf foursome every weekend. During one of their
outings, they decide it is time they did something constructive with their money by opening an
account with a brokerage firm. If the account is opened tenants in common, suitability
information would be required on
A)
whichever person has been designated by the group as its spokesman
B)
only that individual with the authorization to trade the account
C)
each of the four individuals
D)
each of the individuals, and if married, their spouses correct answers C
If the executor of an estate containing a substantial stock portfolio is of the opinion that the
economy is about to enter a down cycle, estate taxes could be reduced by
A)
using the alternative valuation date
B)
asking for an extension to file the return
C)
reallocating the assets to less risky securities
D)
liquidating the portfolio in advance of the market downturn correct answers A - The executor of
an estate has the option of valuing the assets either as of the date of death or six months later (the
alternative valuation date)
Under NASAA's Model Rule dealing with Unethical Business Practices of Investment Advisers,
Investment Adviser Representatives, and Federal Covered Advisers, an investment adviser
would have to disclose that the firm was acting in a principal capacity when
A)
engaging in an agency cross transaction
B)
directing a securities transaction to an affiliated broker-dealer
C)
selling shares from its proprietary account to an advisory client
D)
the trade was being executed by an officer or partner of the firm correct answers C
A support level is the price range at which a technical analyst would expect the
A)
supply of a stock to increase substantially
B)
demand for a stock to remain constant
C)
, demand for a stock to decrease substantially
D)
demand for a stock to increase substantially correct answers D
A life insurance policy with benefits tied to the performance of a separate account that allows the
policyholder to skip premium payments is called
A)
a universal life insurance policy
B)
a flexible premium variable life insurance policy
C)
a scheduled premium variable life insurance policy
D)
a fixed premium variable life insurance policy correct answers B
One of your customers purchased a TIPS bond three years ago. The bond's nominal yield is 4%
and inflation has averaged 6% over the holding period. The interest payment at the end of the
three years would be closest to
A)
$33.78
B)
$23.88
C)
$47.76
D)
$23.60 correct answers B - ((.06 x 1000) + 1000) X .02 = 23.06 and pick the next highest number
Gerald has been a client of yours for more than a decade. Over that period, the relationship
expanded from a business one to one of a social nature, including attending events with your
respective spouses. One afternoon, Gerald's wife calls explaining that she just got off the phone
with Gerald. Before hanging up, he asked her to contact you with a sell order in his account.
Having had extensive social contact, you recognize her voice and know that their marriage is on
strong footing. You should
A)
explain that you cannot accept an order from anyone other than the account holder without
having written trading authorization
B)
accept the order because you know the wife and understand that this is something that would be
fine with Gerald
C)
email a copy of the trading authorization form and ask her to electronically sign for Gerald and
return it so that you can place the order.
D)
contact your compliance department, ex correct answers A
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller FullyFocus. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £10.82. You're not tied to anything after your purchase.
