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Series 65(questions with verified solutions)graded A+
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Series 65(questions with verified solutions)graded A+
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Series 65Who is an Investment Advisor - correct answer ✔✔The Uniform Securities Act defines any individuals
associated with an investment adviser as investment adviser representatives if they manage accounts or
portfolios, determine securities recommendations, or supervise personnel engaged in the above
activities, including any partner, officer, or director who offers advice concerning securities. Persons who
manage client accounts or portfolios, determine securities recommendations, or supervise personnel
engaged in the above activities are investment adviser representatives.
Matched Orders - correct answer ✔✔Matched orders violate trading rules because they create the
illusion of trading volume where such volume would not otherwise occur.
Prospectus - correct answer ✔✔-Tombstone advertisements are excluded
-must be in writing (ie email, etc)
-radio or television are prospectus
Tombstone Advertisements - correct answer ✔✔-Particular type of advertisement appearing in
newspaper or magazine. Typically unadorned text (usually black on white)
Security without a "fixed" maturity date - correct answer ✔✔Collateralized Mortgage Obligations
(CMO's). often paid off ahead of the scheduled maturity so the maturity date remains uncertain. The
operative word is "fixed"; as opposed to "scheduled".
Primary vs Secondary - correct answer ✔✔A primary issue is a new offering of securities by an issuer
sold to investors. Transactions between two investors in the over-the-counter market refer to secondary
transactions (the market between investors). A sale between investors of securities traded on the New
York Stock Exchange is another example of a secondary transaction.
Discretionary Authority - correct answer ✔✔Discretionary authority must be in written form. The only
exception is when the discretion relates to time and/or price because, under the law, that is not
considered to be discretion.
, Closed End Investment Company - correct answer ✔✔A) it sells at the market price plus a commission.
B) it differs from a mutual fund.
C) it is a type of management company.
D) it may not redeem its own shares.
Closed-end funds can, and often do, trade below their net asset value, thus subjecting the customer's
principal to risk.
Ginnie Maes - correct answer ✔✔Direct obligation of US Gov't. Backed by full faith and credit of gov't.
Only GNMA n0t FNMA
OTC Market - meaning - correct answer ✔✔The term "over the counter" means a trading location
anywhere other than on an exchange.
Security Exemptions from USA Registration - correct answer ✔✔Bank securities are exempt from state
registration, but those of nonexempt bank holding companies are not. Securities issued by an insurance
company authorized to do business in the state are exempt, even if not listed on a national stock
exchange. Securities listed on the NYSE, the AMEX, and the Nasdaq Stock Market, whether stocks or
bonds, are exempt as federal covered securities. City of Winnipeg bonds are municipal issues and are
exempt from registration.
Customer inadvertently mails stock certificates to IA - correct answer ✔✔NASAA's custody rules require
that an investment adviser who does NOT maintain custody must return certificates that are mistakenly
sent within 3 business days. When it comes to checks, it depends on how the check is drawn. If made
out to the investment adviser, it must be returned; if made out to a third party (usually the executing
broker/dealer), it must be forwarded to that third party. In either case, the time limit is 3 business days
(might be shown as 72 hours on the exam).
USA - Securities Transactions - correct answer ✔✔Options on foreign currencies are considered
securities under USA. The foreign currency itself is not considered a security under USA.
Administrators right to deny registration - correct answer ✔✔An Administrator may deny an agent's
registration if the order is in the public interest and the agent filed an incomplete application in a
material respect. An Administrator must have grounds to restrict or deny a registration. One such ground
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