EXAMFX ACTUAL TEST | ALL QUESTIONS AND
CORRECT ANSWERS WITH EXPLANATIONS |
GRADED A+ | VERIFIED ANSWERS | JUST
RELEASED
Which of the following would be included in the definition of an investment
adviser?
A. An attorney who makes works with his client on a Chapter 11 re-
organization
B. A business professor who teaches a class in portfolio management
C. A broker/dealer who charges a fee for analyzing client portfolios
D. An individual who publishes a quarterly newsletter with a model portfolio
that includes buy/sell recommendations ---------CORRECT ANSWER---------
--------C.
The MSRB's anti-money laundering rules require that municipal
broker/dealer's procedures contain I. An employee training program. II. A
designated independent party to test the procedures. III. Perpetrator
forfeiture rules. IV. SRO reporting procedures. ---------CORRECT
ANSWER-----------------I and II.
In addition, the procedures must contain features to detect
suspicious activity and money laundering activity as well as customer
identification procedures.
If a CPA also provides investment advice to his clients for a fee, the CPA is
considered a/an ---------CORRECT ANSWER-----------------Investment
adviser
,Which of the following is excluded from the definition from the definition of
investment adviser?
A. An economics professor who occasionally advises other faculty
members on their portfolios
B. An accountant who charges a client for constructing a financial portfolio
C. A lawyer whose investment advice is central to their practice
D. A publisher of a newsletter rendering advice about specific investment
situations of individual clients ---------CORRECT ANSWER-----------------A.
Government securities regular settlement is ---------CORRECT ANSWER---
--------------Next day
When broker/dealers effect trades for the accounts of others, they are
acting in what capacity? ---------CORRECT ANSWER-----------------Agency
When a firm trades for the account of others, they are acting in an
agency capacity. In this capacity they are also known as the broker.
If a member resigns from an SRO, when will the resignation take effect? ---
------CORRECT ANSWER-----------------30 days after receipt of formal
resignation by the SRO
A natural person may be considered an accredited investor if, in each of
the past 2 years, his or her income exceeded ---------CORRECT ANSWER-
----------------$200,000
,Which of the following describes a market maker?
A. A broker/dealer that assumes the risk of holding an inventory of shares
of stock in order to facilitate the trading of that security
B. A person who may accept payment from the issuer of a security when
acting in a market maker capacity
C. Anyone who earns a commission for their efforts
D. A person who buys or sells securities on behalf of the broker/dealer and
its customers, but carries no inventory ---------CORRECT ANSWER-----------
------A.
A customer who failed to complete payment in 4 business days applied for
an extension but was denied. What action should be taken? ---------
CORRECT ANSWER-----------------Close out the transaction
All the following are considered self-regulatory organizations for the
regulation of securities offerings and trading EXCEPT:
A. SEC
B. MSRB
C. FINRA
D. CBOE ---------CORRECT ANSWER-----------------SEC
According to MSRB rules, under which of the following conditions may a
municipal dealer share in the losses of a customer's account? ---------
CORRECT ANSWER-----------------Under no circumstances
, Dealers may not share in profits or losses of customer accounts.
XYZ Corporation is planning an add-on offering. XYZ currently has
outstanding shares and is now raising additional capital to build a new
manufacturing plant. The quiet period in which no research may be
published on XYZ will last for how many days? ---------CORRECT
ANSWER-----------------3 days from the effective date
An issuer that currently has $150 million in outstanding capitalization and
has an average daily trading volume of $1 million would have a restriction
period for their add-on offering of ---------CORRECT ANSWER-----------------
0 days
Issuers offering additional shares with an average daily trading
volume of at least $150 million outstanding capitalization with an
average daily trading volume of $1 million would have no restrictions
prior to the effective date. Issuers offering additional shares that
currently have an average daily trading volume of at least $100,000
are subject to a restricted period of 1 day before the effective date.
Tier 3 companies - companies that do not qualify for Tier 1 or Tier 2 -
have a 5-day restricted period
All of the following are true regarding Electron Communications Networks
(ECNs) EXCEPT
A. They are used for Forth Market trades
B. They facilitate trades between institutions
C. Transactions are executed without the broker
D. ECN's cannot execute mutual fund trades ---------CORRECT ANSWER--
---------------ECNs cannot execute mutual fund trades
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