Question 1

Registration by coordination is provided for by which of the following federal securities acts?

Options :

A : Securities Act of 1933

B : Securities and Exchange Act of 1934

C : Investment Advisers Act of 1940

D : Investment Company Act of 1940

Answer: A

Question 2

A hypothecation agreement refers to

Options :

A :

an agreement wherein a client gives his broker-dealer discretion to purchase securities that the broker-dealer deems appropriate in whatever quantity the broker-dealer feels appropriate and at a time and price the broker-dealer believes is a good deal.

B : an agreement that a client must sign prior to executing any short sales with the broker-dealer.

C :

an agreement signed by a client who is executing a margin transaction that allows the broker to hold the margined securities in street name as collateral for the loan.

D :

a document signed by a client indicating that he or she understands that some of the charts and examples presented in a broker-dealer’s advertising literature are based on hypothetical trades.

Answer: C

Question 3

Which of the following statements would not be in violation of NASAA rules regarding the sale of investment company shares? I. “Investing your money in shares of this money market mutual fund is identical to putting your money in a savings account at a bank, except the money market fund provides a higher return.” II. “Our U.S. government bond fund is invested only in government bonds issued by the U.S. government and is, therefore, a risk-free investment.” III. “You are investing $22,000 in this fund today. The fund has a 5% load at this investment level, but if you sign a letter of intent to invest another $3,000 within the next 13 months, your load will be reduced to 4%. If something comes up and you can’t invest the extra $3,000 within 13 months, you will only need to pay the difference in the two loads.”

Options :

A : I only

B : I and II only

C : III only

D : I, II, and III

Answer: C

Question 4

Which of the following securities would be exempt from state registration requirements, according to the Uniform Securities Act? I. a municipal bond issued by the Canadian province of Nova Scotia II. a bond issued by the county of Cork, Ireland III. a bond issued by Nationwide Insurance Company

Options :

A : All of the selections would be exempt from state registration requirements under the Uniform

B : Selection I only

C : Selection I and III only

D : Selection III only

Answer: C

Question 5

Under the NASAA Model Rules, which of the following must an investment adviser provide its clients with at least once a year?

Options :

A : the total number of agency cross transactions completed for the client during the period

B :

the total amount of commissions or other compensation that the investment adviser received or expects to receive in connection with agency cross transactions performed for the client during the period

C : the number of any complaints that each of its investment adviser representatives has received during the period

D : both A and B

Answer: D

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