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Series 66 Exam 10 Missed Questions
Terms in this set (52)
Is a savings institution, bank, or trust company
Is in a profession such as accounting or law, where the performance of this service is incidental
According to the Uniform Securities Act, persons providing investment advice are NOT required to register as investment advisers if the adviser:
the investor is considered to have a securities portfolio.
When securities represent a majority of an investor's total assets,
Form ADV Part 1.
The amount of assets under management are disclosed by the IA in
Discounted cash flow (DCF) analysis
does not offer relief from reinvestment risk when investing in fixed-income securities
present value of each coupon payment and the repayment of a bond's principal at a present value, based on a rate of return. This makes it possible to evaluate a bond's value against current rates of return.
A discounted cash flow evaluates the
After occurrence of the event for which a filing is required, when must a Form 8-K be filed?
is required by the SEC to announce certain significant changes in a public company, such as a merger or acquisition, a name or address change, bankruptcy, change of auditor or accountant, or any other information that may be reasonable for a potential investor to know
(1) they are shown as they originally appeared on an independent third party social media site,
(2) are unedited, and
(3) the IA or IAR has no direct or indirect influence or control over the independent site.
An IA or IAR is permitted to publish testimonials if
A firm that provides advice on fixed annuities
Which of the following investment advisers would most likely NOT be required to register with the Administrator?
plans are retirement plans for non-governmental employers and there are restrictions regarding participant eligibility.
may include members of a union, hospital workers, and employees of charitable organizations.
the law requires it (subpoena)
It is considered unethical for an investment adviser to disclose the identity, affairs, or investments of any client unless the client consents, or unless
it is exempt from registration in that state
According to the Uniform Securities Act, if a firm has five or fewer clients in a state (during a 12-month period) in which it has no office,
The firm would not be required to register as an investment adviser if it did not lease an office in the state in which it is not registered
An investment adviser is registered in 10 states. The firm wants to transact business with three clients in a state in which it is not registered. According to the Uniform Securities Act, which of the following statements is TRUE?
it collects prepaid fees of more than $1,200, six months or more in advance of providing advisory services
According to the Investment Advisers Act of 1940 (federal law) an adviser is required to provide clients with an audited balance sheet if
1) the firm collects/solicits prepaid fees of more than $500, six months or more in advance of the service, or
2) the firm maintains custody or discretionary control of clients' assets
according to the Uniform Securities Act (state law), an adviser is required to provide clients with an audited balance sheet if
not recorded on the books and records of the broker-dealer
It is considered an unacceptable practice for an agent to effect securities transactions that are
Any nonissuer transaction of a security registered under the Securities Exchange Act, Investment Company Act, or an isolated nonissuer transaction would be considered
Any offer, but not sale,
of a security filed with both the Administrator and SEC would be considered an exempt transaction.
tamper-evident (write once read many)
Records may be preserved on microfilm, microfiche, or any similar device. They may also be kept on various electronic storage media such as CD-ROMs, provided the disks are
excluded from the investment adviser definition
According to the Investment Advisers Act of 1940, any adviser that limits its advice to U.S. government securities is
investment adviser at the state level and is required to register with the appropriate state Administrator
the Uniform Securities Act an adviser that provides advice only about U.S. government securities is defined as an
He fails to renew his registration by December 31
Under the Uniform Securities Act, an agent's registration will expire if:
addresses only federal covered securities
According to the Uniform Securities Act, all advertising used by a broker-dealer must be supervised and checked for errors. They are also required to keep a file that is subject to audit by the Administrator. However, the Administrator does not regulate advertising that
foreign securities regulator's disciplinary action, within the past five years
Under Sec. 204(H.1) of the USA, the Administrator may, by order, deny, suspend, revoke, cancel, or withdraw the registration of any registrant (i.e., broker-dealer, agent, investment adviser, investment adviser representative) that has been the subject of a
hedge against inflation
When an adviser recommends that clients invest in tangible assets, such as precious metals (gold) and real estate, its general purpose is to help them
Money Purchase Plan
is a type of defined contribution plan to which an employer makes mandatory contributions, regardless of the company's profitability. For tax purposes, the employer is able to deduct the contributions
Alimony payments are taxable to the payer.
Alimony payments are not taxable to the payee.
How is alimony treated for tax purposes?
Contributions to a Coverdell Education Savings Account (CESA)
are limited to $2,000 annually and are never tax-deductible. Additionally, contributions are not allowed if the contributor's income exceeds a certain amount. Withdrawals from the account are tax-free if used for qualified educational expenses.
An independent accountant within 120 days after the completion of an audit
If an adviser has custody of customer funds and securities, the submission of Form ADV-E must be performed by:
For a person interested in establishing a small company that will carry few liabilities, the simplest business form is a
of auditors are typically considered the best, since they're issued without reservation
is issued when an auditor questions at least one part of a company's finances (e.g., unusual expense)
are issued when an auditor doesn't believe that a company's finances represent the true results
present a conflict of interest
Investment advisers and investment adviser representatives must disclose all relevant facts so their clients can make informed decisions regarding potential conflicts of interest. If an adviser acts in more than one capacity when dealing with a client, this may
receiving additional compensation.
Mark should inform his client that he will be acting in more than one capacity (IAR when creating the plan and RR/agent when implementing the plan) and will be
Like a corporation, LLCs provide investors with limited liability.
The income flows through to investors and is taxed like a partnership.
A client creates a limited liability company (LLC). Which TWO of the following statements are TRUE?
The earnings in the subaccounts are added to the guaranteed minimum death benefit every year
In what way does variable life insurance provide for a death benefit that can keep up with inflation?
going to state court to ask for an injunction.
The Administrator may take more severe action if a broker-dealer does not comply with a cease-and-desist order to stop selling unregistered securities in the Administrator's state. This would entail the Administrator
All the general partners have the authority to bind the partnership
Which of the following statements is TRUE regarding general partnerships?
If it was held for less than one year, the annualized rate of return would be greater than the holding period return
If an investment increases in value, which of the following statements would be TRUE?
holding period rate of return
states how much an investor earns over the period an investment is held
annualized rate of return
states how much an investor makes over a one-year period.
Options strategies may be appropriate as part of a conservative portfolio
An investment adviser representative manages a portfolio for a client on a discretionary basis. The client's objective is conservative growth. According to prudent investor standards, which of the following statements is TRUE regarding the inclusion of options in his portfolio?
Prudent investor standards
are applied to the client's total portfolio, not on an investment-by-investment basis. Rather than restricting individual investments, many securities may be appropriate as part of a portfolio if the investment helps the portfolio achieve specific objectives.
payment of a filing fee.
license renewal is accomplished by the
the donor's cost basis or the stock's current market value, whichever is less.
When a person receives a gift of stock, the recipient's cost basis is
When an investment adviser analyzes the market by first evaluating individual companies, it is considered a
when an adviser begins by analyzing the performance of a sector as a whole, it is considered a
involves the purchase of an interest in an insurance policy covering the life of an individual
Anyone with a minimum net worth of $150,000 and gross income last year of at least $100,000, or a minimum net worth of $250,000 and
An accredited investor under regulation D
Sales of viatical investments can only be made to suitable investors. Which TWO of the following are considered suitable?
A company's stock experiences wild fluctuations due to unsubstantiated rumors about its products. After further analysis, the company's earnings and sales are better than average. The wild price swings may be described as:
contract is in force
Investment advisers are allowed to charge a prorated fee for the time that a
THIS SET IS OFTEN IN FOLDERS WITH...
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STC Series 66 Exam 1 Missed
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