Uniform Securities Agent State Law Examination - Series

Question 1

A broker-dealer cannot legally be

A. A broker-dealer can be any of the above.

B. a partnership.

C. an individual.

D. a sole-proprietorship.

Correct Answer: A

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Question 2

Cassie Clueless has recommended that a client purchase shares of a mutual fund prior to its ex-dividend
date, so that the client will receive the dividends when they are distributed. In which of the following
situations might this recommendation be justifiable and not in violation of NASAA rules?
I. The investor has refused to provide Cassie any information regarding his investment goals.
II. The investor is a young professional with an investment goal of long-term capital appreciation.
III. The investor is a retiree in a low tax bracket and needs current income to augment her social security
check.

A. I and II only

B. It is always in violation of NASAA rules to recommend that a client purchase shares of a mutual fund
prior to its ex-dividend date.

C. I only

D. III only

Correct Answer: D

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Question 3

Once a person has filed an application with the Administrator, and in doing so has truthfully disclosed
every material fact, how long does the Administrator have after the effective date of the registration to
commence a proceeding to deny, suspend, or revoke that person's license based on those facts?

A. 90 days.

B. 60 days.

C. 30 days.

D. one year.

Correct Answer: A

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Question 4

A "notice filing" refers to

A. the right of an issuer to run tombstone ads in the newspapers and other publications upon filing a
registration application with the state Administrator.

B. the filing by a federal covered investment adviser of forms already filed with the SEC along with a
consent to service of process with the state Administrator.

C. notification to the public by the issuer or its underwriters that the issue is being sold on an "all or
nothing" basis.

D. a document that the issuer must file with the SEC informing the SEC that the firm has applied to the
state for registration of its new security.

Correct Answer: B

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Question 5

The 2003 NASAA Model Rule requires that investment advisers that are not federal covered maintain
their records for at least

A. seven years.

B. three years.

C. five years.

D. Investment advisers must maintain their records for as long as they remain registered with the state.

Correct Answer: C

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Question 6

MoeMoney Investment Advisers, LLC is registered in the state of Texas, and its three offices are all
located in the greater Dallas-Fort Worth area. Five of its clients-all individuals-have relocated to Colorado
and all have indicated a desire to retain the services of MoeMoney. In order for this to be possible,

A. MoeMoney will need to apply for and be granted registration as an investment adviser representative in the state of Colorado.

B. MoeMoney will need to apply for and be granted registration as an investment adviser in the state of Colorado.

C. Neither MoeMoney nor its clients need do anything.

D. each client will have to write a letter to the Administrator of the state of Colorado on MoeMoney's behalf.

Correct Answer: C

Question 7

Which of the following funds can an agent indicate is "no load?"

A. a fund with no front-end or back-end load that has 12b-1 fees equal to 0.25% of the average net assets
of the fund.

B. Both A and C can be advertised as "no load" funds.

C. a fund with no front-end load that has 12b-1 fees equal to 0.10% of the average net assets of the fund
and a rear-end load that varies depending on how long the investor has held the shares.

D. a fund with no front-end or back-end load that has 12b-1 fees equal to 0.30% of the average net assets
of the fund.

Correct Answer: A

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Question 8

Trevor is currently a registered agent in the state of Connecticut where he has been employed by Connect
& Company, a broker-dealer that is registered in Connecticut and has subsidiary operations in
Massachusetts, New Jersey, and New York. Trevor has moved to Massachusetts and is now associated
with one of Connect's subsidiaries, a broker-dealer registered in the state. Trevor has applied to the
Administrator of Massachusetts for registration as an agent. Can Trevor execute purchases and sales for
clients while his registration is still pending?

A. It depends. Trevor can execute some purchases and sales, but only for clients that he already had who
may have recently relocated to Massachusetts and only for sixty days while his registration is pending.

B. No. Until he is informed by the Administrator of Massachusetts that his application has been accepted,
Trevor may not effect any securities transactions in Massachusetts.

C. Yes. Because Trevor is a registered agent in another state and is affiliated with a broker-dealer that is
registered in the state of Massachusetts, he is not restricted from executing trades.

D. Yes. Trevor can execute trades for new clients he solicits, but only for sixty days while his registration
is pending.

Correct Answer: A

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Question 9

Which of the following describes an "exempt security," as defined by the Uniform Securities Act (USA)?

A. An exempt security is any security being sold as a private placement.

B. An exempt security is any security that is being sold by an institutional investor, such as a bank, to
another institutional investor, such as another bank or an insurance company.

C. An exempt security is any security that is being sold in an isolated non-issuer transaction.

D. An exempt security is one that need not be registered in the state in which it is sold.

Correct Answer: D

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FINRA Uniform Securities Agent State Law Examination - Series_63 Exam Practice Test

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