Online Access Free Series_63 Practice Test

Under the guidelines of the Bank Secrecy Act (BSA), the Treasury Department now requires
broker-dealers to obtain and keep certain information relating to clients that make or receive funds
transfers that involve

• A.$3,000 or more.
• B.$10,000 or more.
• C.$5,000 or more.
• D.$100,000 or more.

Which of the following scenarios does not meet the definition of "custody" under NASAA Model Rules?

• A.An investment adviser has general power of attorney for a client and is authorized to withdraw client
  funds or securities that are on deposit with a registered broker-dealer upon the investment adviser's
  request.
• B.An investment adviser keeps a client's securities in its safety deposit box.
• C.An investment adviser is mistakenly sent a client's securities, but returns them to the sender within
  three business days of receipt.
• D.An investment adviser receives a check from a client that is written to a mutual fund and forwards the
  check to the mutual fund within three business days of receipt.

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.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.
• C.All of the above describe prohibited practices.
• D.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.

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 in the mail before proceeding with
  the transaction.
• 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 provided before the transaction even takes
  place.
• 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 in the mail before proceeding with the
  transaction.
• 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 provided before the transaction
  even takes place.

A margin transaction refers to a transaction

• A.in which a registered agent makes trades on a customer's account without that customer's knowledge.
• B.Both A and C are true statements.
• C.that is illegal under the guidelines of the Uniform Securities Act.
• D.in which the client borrows some of the money that he is investing.