2023 Realistic Series63 Dumps are Available for Instant Access [Q145-Q160]

QUESTION 145
Goldie Locks is an agent with Bear Broker-Dealers. One of her clients is a single woman, Annie Spinster,
who is retired and needs income from her investment portfolio to meet her current needs for liquidity. In
addition to investing in mutual funds, Annie likes the thrill of investing in single stocks and asks Goldie for
recommendations. Goldie recommends Annie invest some of her money in Alcon (ACL), a medical
instrument and supplies company selling on the NYSE, based on the fact that it has a high dividend yield
and is paying a dividend of $2.21 a share, which is guaranteed to continue or even increase, Goldie
assures Annie. Has Goldie violated any laws or engaged in any prohibited practices?

Yes. At the very least, Goldie has committed fraud since she cannot guarantee that a firm’s dividend
will continue or increase.

Yes. As the agent of a broker-dealer, Goldie is not permitted to make recommendations for specific
investments. Only investment adviser representatives and investment advisers can do that.

No. Goldie merely responded to a recommendation request from a client, and the recommendation is
suitable since the client has a need for current income and the recommended stock pays a high dividend.

Both A and B are true.

QUESTION 146
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 small management 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.

QUESTION 147
Under the Uniform Securities Act, which of the following does not need to be included when filing to register a security issue with the state?

a copy of the firm’s articles of incorporation and bylaws, or the equivalent

copies of the underwriter agreements

a copy of any indenture applying to the security being registered

All of the above documents must be included when filing to register a security with the state.

QUESTION 148
An investment adviser representative with Capital Investment Advisors, Inc. advised his client to invest
$ 5,000 in bonds of a firm that the adviser claimed was an investment “almost as risk-free as investing in
U.S. government bonds; maybe even more so, given the magnitude of the government deficit these
days.” The client paid a total of $200 for this advice. The bonds paid interest at the rate of 6%, with
semiannual payments, and the client received $300 in interest payments before the firm went belly-up at
the end of a year, and its bonds were deemed worthless. The client has filed suit, and its attorneys’ fees
and court costs are expected to be $1,000. When the investment is a bond, the state has recently been
assessing an interest rate equal to the interest rate paid by the security as an equitable interest payment
guideline in civil penalties. The maximum the client can expect in civil penalties is

$5,900.

$6,200.

$5,200.

$6,000.

QUESTION 149
Noah Aull is an investment adviser representative with Canto Investment Advisers. A client has called and
told Noah that he heard about a firm that had recently completed an IPO at a party he had attended that
weekend and instructed Noah to purchase shares of the company, which was now trading on the OTC
Bulletin Board. Noah did some research and felt the company was far too risky an investment for this
client, so he did not execute the trade. This turned out to be fortunate for his client since the firm became
insolvent within six months of its IPO. Has Noah done anything wrong?

Yes. Noah is guilty of misappropriation and could have his license revoked.

No. Noah did what he is hired to do-manage his clients’ accounts to the best of his ability.

Yes. Noah is guilty of not following a client’s instructions and could have his license revoked.

Yes. Noah is guilty of making an unauthorized transaction and could have his license revoked.

QUESTION 150
Which of the following does not need to be included in an investment advisory contract?

the term of the contract

the total amount of money that the investment adviser currently has under management

the advisory fees and the formula used to compute them

a statement that the contract cannot be assigned to another party without the client’s consent

QUESTION 151
The Administrator of a state will deny the registration of a security if
I. the mandated filing fee has not been paid.
II. the compensation of the underwriters is excessive.
III. the registration statement is incomplete.
IV. the issuer is registering the security through the registration by coordination process and has not complied with all the stipulated requirements.

I, II, III, or IV

I or III only

III or IV only

I, III or IV only

QUESTION 152
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.

I only

I and II only

III only

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.

QUESTION 153
In accordance with the National Securities Markets Improvement Act of 1996, which of the following is a
federal covered adviser and, therefore, exempt from registering with the state Administrator?
I. An adviser who does business in 26 states.
II. An adviser who manages the portfolio of a mutual fund that is registered with the SEC.
III. An adviser with $35 million in assets under management

All of the selections meet the qualifications of a federal covered adviser.

I and II only

II and III only

I and III only

QUESTION 154
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 investment the 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.

QUESTION 155
Ari Gaunt is employed by a small state-registered broker-dealer and has recently received notification that his application to be a registered agent of the state has been accepted. Now that he is licensed to execute transactions for the firm’s clients, Ari has a batch of business cards printed up, with a picture of himself on the right-hand side of the card. Underneath the picture is the caption, “State-Approved Agent.” Will Ari be violating any securities laws if he distributes these business cards?

No. However, he may be violating company policy of the broker-dealer he works for by designing his own cards.

No. His registration with the Administrator of the state has been accepted, so he is entitled to call himself a “State-Approved Agent.”

Yes. Agents are not permitted to include a picture of themselves on their business cards.

Yes. It is a violation of a securities law to suggest that he has been approved by the state Administrator.

QUESTION 156
Which of the following constitutes a non-punitive order?

summary license suspension

registration cancellation

registration denial

All of the above are punitive orders.

QUESTION 157
Elizabeth is the owner of Lizbeth Investment Advisers, a small, state-registered investment advisory firm. She has decided that her firm needs a niche and has learned that a consulting group is coming to the area and offering a 3-day seminar on asset allocation for senior citizens offered by Advantage for Retirement Persons (ARP). The seminar will cost $1,000 per individual, but after attending the seminar, each attendee will receive a certificate verifying their involvement in the program. Elizabeth decides this is the niche she has been looking for and signs up herself and her three investment adviser representatives for the program. After attending the seminar and receiving their certificates, Elizabeth and her team can

represent themselves as certified senior citizen investment advisers.

have the words “Senior-Citizen Investment Specialists” printed on their business cards.

indicate that they are certified by the ARP program since money was paid for their attendance.

do none of the above.

QUESTION 158
An agent working for a broker-dealer mistakenly sends an investment adviser some bonds that the
adviser purchased on behalf of his client instead of directing the bonds to the financial institution that is
serving as the qualified custodian of the client’s funds. If the investment adviser wants to avoid being
considered custodian of this client’s account, what must the adviser do?

Record what securities were sent, when he received them, and when he forwarded them–which

Record what securities were sent, when he received them, and when he forwarded them–which must
be within three business days-to his client.

Record what securities were sent, when he received them, and when he forwarded them–which must
be within twenty-four hours-to his client.

Record what securities were sent, when he received them, and when he forwarded them–which must
be within twenty-four hours-to the qualified custodian of the client’s funds.

QUESTION 159
A hypothecation agreement refers to

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.

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

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.

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.

QUESTION 160
Jack is employed by NewCorp, which is engaging in an initial public offering (IPO). Jack will need to
register as a sales representative if he:

engages in transactions with the underwriters of the IPO for the purpose of taking the firm public.

represents NewCorp in any transactions with financial institutions.

participates in the selling of the new stock to individual investors.

Jack will need to register as a sales representative if he performs any one of the above activities.