Free FINRA Series_63 Practice Test & Real Exam Questions, Page 4

Question #34

Price pegging refers to

A. the practice of buying large amounts of a security to drive its price up artificially.

B. the unethical practice of investment advisers who issue "buy" recommendations for stocks that they
own themselves without disclosing the fact.

C. the illegal activity of a group of investors who buy and sell a security among themselves to create an
artificially high volume of trading in hopes of luring investors to buy the security.

D. the prohibited practice of excessively trading on a client's account that is used by some broker-dealers
and/or their agents to generate more commissions for themselves.

Discussion 0

Correct Answer: A Vote an answer

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Question #35

Which of the following persons would not be required to register with the state as an agent under the
guidelines of the Uniform Securities Act (USA)?

A. Stefan is a sales representative for SecureMoney Broker-Dealers and sells only mutual fund shares.

B. John is employed by TrustUs Corporation to sell shares of the firm's stock to the firm's employees and
receives a commission on the shares he sells.

C. Keith is a salaried employee of Middlesex County in Massachusetts who sells revenue bonds issued by
the county to the public.

D. Preetham is part-owner of SecureMoney Broker-Dealers and executes the purchase and sale of
securities for the firm's customers.

Discussion 0

Correct Answer: C Vote an answer

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Question #36

Which of the following is an example of a non-issuer transaction?

A. Jose purchases a 10-year bond issued by Progress Energy when it has 6 years remaining to maturity.

B. NewCorp, which has been a privately held company, is engaging in an initial public offering (IPO) of its
stock.

C. Google offers more shares of its stock for sale to the public.

D. IBM sells a new issue of bonds to an insurance company.

Discussion 0

Correct Answer: A Vote an answer

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Question #37

When a customer files a complaint with a broker-dealer,
I. the broker-dealer must submit the complaint to the firm's compliance department.
II. the broker-dealer must provide a prompt written response to the complainant.
III. the broker-dealer must temporarily suspend the activities of any agent named in the complaint.

A. I and III only

B. I, II and III

C. I and II only

D. II and III only

Discussion 0

Correct Answer: C Vote an answer

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Question #38

"Federal covered securities" were defined and exempted from state registration requirements by the:

A. National Securities Markets Improvement Act of 1996 (NSMI)

B. National Conference of Commissioners on Uniform State Laws (NCCUSL.)

C. Uniform Securities Act (USA.)

D. Gramm-Leach-Bliley Act of 1999 (GLBA.)

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Question #39

Noah Scruples, an agent with CanDo Broker-Dealers, just got a copy of the most recent report on a
certain stock. The report was generated by CanDo's analyst department and is hot off the presses. It has
not yet even been put on the firm's website for the firm's clients.
The analyst department has just changed its recommendation on the stock from "Hold" to "Strong Buy"
based on new information that it has obtained on the company. Can Noah
rush to his office to buy shares of the stock before the analysts release their reports to CanDo's clients?

A. No. It is unethical for him to trade based on this information before the firm's clients have received the
information.

B. Yes. The firm's analysts used publicly available information to assess the stock and make its
recommendation, so Noah can buy the stock now on his own account.

C. Both B and C are true statements.

D. No. This is a prohibited activity referred to as "painting the tape."

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Question #40

The discretionary powers over a clients' accounts differ between broker-dealers and investment advisers
in that

A. An investment adviser can execute a discretionary transaction for a client upon receiving only verbal
authority initially, followed up by written authority to be received within 10 days of the order, whereas a
broker-dealer must require that written authority for the transaction is provided before the transaction
even takes place.

B. A broker-dealer can execute a discretionary transaction for a client upon receiving only verbal authority
initially, followed up by written authority to be received within 10 days of the order, whereas an investment
adviser must require that written authority for the transaction is in the mail before proceeding with the
transaction.

C. A broker-dealer can execute a discretionary transaction for a client upon receiving only verbal authority
initially, followed up by written authority to be received within 10 days of the order, whereas an investment
adviser must require that written authority for the transaction is provided before the transaction even takes
place.

D. An investment adviser can execute a discretionary transaction for a client upon receiving only verbal
authority initially, followed up by written authority to be received within 10 days of the order, whereas a
broker-dealer must require that written authority for the transaction is in the mail before proceeding with
the transaction.

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Question #41

You have passed the necessary exams (congratulations!) and are applying for registration as a securities
agent. It is already the end of September. Therefore, you must pay

A. one-fourth of the annual fee required since only one quarter of the year remains.

B. the full annual fee, and your license will expire on December 31st this year.

C. the full annual fee, and your license will expire on September 30th next year.

D. the full annual fee, and your license will expire on December 31st next year.

Discussion 0

Correct Answer: B Vote an answer

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Question #42

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

B. a copy of any indenture applying to the security being registered

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

D. copies of the underwriter agreements

Discussion 0

Correct Answer: C Vote an answer

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Question #43

Which of the following does not describe a prohibited activity by investment advisers and their
representatives, according to NASAA Model Rules?

A. A new client comes to Simon LaGree for investment advice. The client has $25,000 to invest.Simon
tells the client that it will cost the client $5,000 to have a customized financial plan developed for him, but
after that the client needs to pay only 5% of the total value of the assets under management each quarter.

B. The agreement that Simon LaGree has his clients sign indicates that LaGree uses SecureMoney
Broker-Dealers in executing trades for his clients and that, in return, LaGree receives software from the
broker-dealer that allows LaGree to perform some fundamental and technical analysis.

C. All of the above describe prohibited practices.

D. A 72-year-old retired social worker comes to Simon LaGree for investment advice. She has $50,000 to
invest. Simon recommends she invest half of it in an international growth mutual fund and half in a
variable annuity.

Discussion 0

Correct Answer: B Vote an answer

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Question #44

Which of the following conditions is necessary for an act involving securities fraud to be considered
criminal and subject to criminal penalties?

A. The victim(s) lost a combined total of at least $25,000 because of the act.

B. The perpetrator willfully committed the fraudulent act.

C. The Administrator decides to send the case to criminal court.

D. The act extended across state lines.

Discussion 0

Correct Answer: B Vote an answer

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