Series 63

Series 63 practice questions, page 8 of 10, with answer review and explanations.

Question 36

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,

  1. MoeMoney will need to apply for and be granted registration as an investment adviser in the state of Colorado.
  2. each client will have to write a letter to the Administrator of the state of Colorado on MoeMoney's behalf.
  3. MoeMoney will need to apply for and be granted registration as an investment adviser representative in the state of Colorado.
  4. Neither MoeMoney nor its clients need do anything.

Question 37

Sam Shade had his agent's license revoked by the state of Washington for repeatedly making misleading claims about various investment to investors. He had had it with all the rain anyway and decided to move to the sunshine state of Florida. His brother-in-law was a computer whiz who made money on the side (more than his day job provided, in fact) by supplying illegal immigrants with official-looking documentation, including social security numbers. Sam Shade became Ian Creed in a few clicks of the mouse. As Ian Creed, Sam was hired by Sunny Investment Advisers, an investment adviser firm located in the Florida Keys, in a clerical role. As such, Sam/Ian had access to the confidential information of the firm's clients, which he and his brother-in-law utilized for the purpose of identity theft. Under the Uniform Securities Act guidelines, when Sam and his brother-in-law are caught in their illegal activities,

  1. Sunny Investment Advisers will not be held liable if it can prove that there was no way it could have or should have known of the revocation of Sam Shade's (aka Ian Creed) license.
  2. Sunny Investment Advisers will be subject to criminal prosecution for employing an individual whose license had been revoked by the Administrator of another state since it obviously did not use due diligence in hiring Ian Creed, aka Sam Shade.
  3. Sunny Investment Advisers will be subject to civil penalties for employing an individual whose license had been revoked by the Administrator of another state.
  4. Sunny Investment Advisers will be subject to both criminal prosecution and civil penalties for employing an individual whose license had been revoked by the Administrator of another state since it obviously did not use due diligence in hiring Ian Creed, aka Sam Shade.

Question 38

Which of the following statements regarding an investment adviser representative who has an office in the state is true?

  1. If the investment adviser is registered with the SEC, then neither the investment adviser nor any of its affiliated investment adviser representative needs to be registered with the state.
  2. Regardless of whether the investment adviser is registered with the SEC or is registered with the state, all investment adviser representatives of the firm must be registered with the state if they have offices in the state.
  3. If the investment adviser that the investment adviser representative is affiliated with is itself registered with the state, then the investment adviser representative does not need to apply for a separate registration, regardless of whether the investment adviser representative has an office in the state.
  4. If an investment adviser representative is registered with the SEC, he or she need not obtain state registration, regardless of whether the investment adviser representative has an office in the state.

Question 39

A variable annuity is:

  1. not a security and, therefore, does not have to be registered with the state.
  2. not a security, but is still required to be registered with the state before it can be offered for sale.
  3. a security and, therefore, has to be registered with the state before it can be offered for sale.
  4. a security, but is exempt from state registration.

Question 40

Which of the following is not a security, as defined by the Uniform Securities Act? I. an option contract - II. a futures contract on gold - III. a 401K plan - IV. a variable annuity -

  1. None of the selections listed are securities.
  2. Only Selection III is not a security.
  3. Only Selections II and III are not securities.
  4. Selections II, III and IV are not securities.