FINRA-Investment Company and Variable Contracts Products Representative Qualification Examination Set 3

1.

Under the Uniform Securities Act (USA), the term "investment adviser" does not apply to
I. an investment advisory firm owned and operated by a sole proprietor.
II. a bank or savings institution.
III. an investment adviser representative.
IV. a broker-dealer or its agents if the advice is incidental to the business although there is a nominal charge for any specific investment advice given.

I, II, III, or IV. I, II, and III only. II and III only. II, III and IV only.

2.

Which of the following statements regarding the registration of broker-dealers and investment advisers is true?

Investment advisers are required to register with both the state and the SEC, while broker-dealers may be registered with only one or the other. Investment advisers must always be registered with the SEC to conduct business; broker-dealers may be registered with either an individual state or the SEC orboth. Investment advisers are required either to be registered with a state or with the SEC, while broker-dealers must be registered both with the SEC and the state. Both investment advisers and broker-dealers must be registered with the SEC and with the states in which they have offices.

3.

Under the Uniform Securities Act (USA), which of the following statements would be disallowed?

The government of the U.S. guarantees a 3% interest rate, to be paid semiannually, on a new 5-year Treasury note. A sales representative of GetErDone Broker-Dealers guarantees that a client can expect an average annual rate of return of 2% on a mutual fund investmentthe sales representative is selling, pointing to the fact that the fund has returned an average annual rate of return of 6% over the past ten years. An insurance company guarantees a fixed payment of $300 a month for life on an annuity it is selling. Neither the statements in Selections B or C would be allowed under the guidelines of the Uniform Securities Act.

4.

Which of the following would meet the requirements for an "exempt security?"

a $500,000 promissory note that matures in two years commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors a $25,000 promissory note that matures in three months commercial paper with a $200,000 face value and a maturity of three months that is rated BB by Standard and Poors

5.

Which of the following describes an investment adviser that is not required to register with the state Administrator?

MoeMoney Investment Advisers, LLC has an office in the state with a client base of fifty individuals. Financial Freedom Investment Advisers has no offices in the state although it does advise six wealthy individuals who are residents of the state. CanDo Broker-Dealers is a state-registered broker-dealer. It has begun to offer asset management services to a few of its wealthier clients for a smallmanagement fee equal to 0.1% of the assets under management. Buckeye Investment Advisers has no offices in the state, but it provides portfolio management services to an insurance company located in the state.

FINRA-Investment Company and Variable Contracts Products Representative Qualification Examination Set 3

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FINRA-Investment Company and Variable Contracts Products Representative Qualification Examination Set 3

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