Question 1

Mina is a new agent with SecureMoney Broker-Dealers and is struggling to make ends meet. She gets a job as a receptionist at a fitness club on the weekends to generate more income. Which of the following is true?

Options :

A : Mina should have notified SecureMoney in writing before signing on to work at the fitness club.

B :

Because the job as a receptionist at a fitness club has nothing to do with the world of finance, Mina has done nothing inappropriate.

C : Mina simply needs to tell her immediate supervisor at SecureMoney about her new job.

D : Mina needs to send notice to the state Administrator informing him of her extracurricular activity.

Answer: A

Question 2

While on vacation in Colorado, Mr. Moneybags became interested in the stock of a company called SafeAway, which designs and installs customized high-tech security systems in the multimillion dollar mansions located in Colorado’s pricier ski resort areas, such as Vail and Aspen. Upon returning to his home in Boston, he calls his broker-dealer with an order to purchase 10,000 shares of the stock, which he learned trades in the over-the-counter market. Fast Eddie, a registered agent with his broker-dealer, discovers that SafeAway’s stock is registered only in the states of Colorado and Wyoming. Neither Fast Eddie nor his broker-dealer are registered to do business in either of those states. Under these circumstances,

Options :

A :

Fast Eddie cannot effect Mr. Moneybags purchase of SafeAway stock since neither he nor his broker are registered to do business in Colorado or Wyoming, and SafeAway stock is not registered for sale in the state of Massachusetts.

B :

Fast Eddie can execute the trade for Mr. Moneybags since this would be considered an exempt transaction because it is a private placement.

C :

Fast Eddie should contact a broker-dealer that is registered in either Colorado or Wyoming and negotiate a finder’s fee for referring Mr. Moneybags to them.

D :

Fast Eddie can execute the trade for Mr. Moneybags since this would be considered an exempt transaction because it is an unsolicited transaction.

Answer: D

Question 3

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 4

White and Associates is an investment adviser registered in the state of Kentucky and, as such, is meeting Kentucky’s minimum net capital requirement for investment advisers. The firm recently registered with the state of Virginia and has opened an office there. Virginia has a significantly higher net capital requirement for its investment advisers. Which of the following statements is true?

Options :

A : According to the Uniform Securities Act, S. White will have to meet Virginia’s higher requirement.

B :

According to the Investment Advisers Act of 1940, S. White needs only to meet the net capital requirement of Kentucky.

C :

According to the Securities Exchange Act of 1934, S. White needs to meet at least the minimum net capital requirement specified by that Act since it is now operating in multiple states.

D :

According to the Investment Advisers Act of 1940, S. White will have to maintain a minimum net capital equal to the average of the net capital requirements of the two states.

Answer: B

Question 5

Investment Adviser Foo Lish, LLC has begun serving as a custodian of its clients’ assets. Foo Lish, LLC must now I. file a new U-5 form with the Administrator. II. meet higher net capital requirements than before. III. file an updated Form ADV with the Administrator. IV. pay a CPA to do an annual unannounced audit of the firm.

Options :

A : I, II, III, and IV

B : II, III, and IV only

C : II and III only

D : I and II only

Answer: B

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