[UPDATED 2023] Read Series63 Study Guide Cover to Cover as Literally [Q76-Q90]

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[UPDATED 2023] Read Series63 Study Guide Cover to Cover as Literally

100% Real & Accurate Series63 Questions and Answers with Free and Fast Updates

QUESTION 76
Which of the following trades is illegal?

a short sale

a margin transaction

a market-not-held order

the sale of a mutual fund if the purchaser hasn’t received a prospectus

QUESTION 77
You are an investment adviser representative. Your client, Mr. I. M. Pulse, calls you with what he thinks is exciting news. He just passed a restaurant and saw Microsoft’s Bill Gates having lunch with a local entrepreneur who owns a small firm in the computer software industry that trades on the OTC pink sheets. He is sure that this means Microsoft is negotiating a purchase of the smaller company and instructs you to take the cash balance in his account and buy shares of the local company. You should

tell Mr. I.M. Pulse that this would be an illegal insider trade and that you are unable to fulfill his request.

call your supervisor and alert him immediately of Mr. Pulse’s attempt to have you place an illegal order on his behalf in case Mr. Pulse decides to place the order elsewhere.

advise Mr. Pulse that he may be jumping the gun, but place the order if he insists.

do both A and B.

QUESTION 78
A tombstone advertisement is

an offer to sell a new security.

the announcement of a new security that may become available for purchase.

the only type of advertisement that an investment advisory firm is allowed to use.

an offer to sell a new security that is being issued by an Arizona firm.

QUESTION 79
A broker-dealer of commodity futures contracts has been profiting by trading for its own account either before or after executing a client’s trade on the same commodity, depending on which will be most advantageous.
Under the Uniform Securities Act, the broker-dealer is guilty of

fraud.

churning.

unauthorized transactions.

nothing. The Uniform Securities Act (USA) deals only with securities, and a commodity futures contract is not a security.

QUESTION 80
Once a broker-dealer has applied for and been granted state registration, the registration remains valid

until December 31st.

for twelve months.

for three years.

for five years.

QUESTION 81
Ms. Muffet is employed by Spyder Broker-Dealers. Her job duties include providing price quotes and executing purchases and sales for the firm’s clients. She is paid a salary plus commission. Ms. Muffet is

a broker-dealer.

an agent.

an investment adviser.

an investment adviser representative.

QUESTION 82
An agent cannot tell a client that a mutual fund is “no load” if the fund has
I. a front-end load
II. a contingent deferred sales load
III. 12b-1 fees

I, II or III

I or II only

I only

I or III only

QUESTION 83
Mr. Noah Scruples is a registered representative with CanDo Broker-Dealers. A client calls and wants
Noah to purchase shares of a mutual fund the client has read about. CanDo is not authorized by this
particular fund to effect purchases or sales of the fund shares. Can Noah execute the order anyway?

No. This would be considered money laundering, which is highly illegal.

No. This is a prohibited practice known as selling away.

No. This is a prohibited practice known as front running.

Yes. Since this is an unsolicited trade, Noah can execute the transaction on behalf of his client.

QUESTION 84
Which of the following statements regarding an open-end investment company is not true?

Its shares are bought and sold through the company.

Its securities are federal covered.

Its shares may sell for either net asset value or greater than net asset value, but not below

Its shares are bought and sold on exchange floors.

QUESTION 85
Which of the following statements best explains the difference between an agent and a broker-dealer?

An agent is an individual who represents a broker-dealer or an issuer and buys and sells securities he
does not own in return for a commission on the transactions he executes. A broker-dealer may also buy
and sell securities for his own portfolio, in which case the broker-dealer enjoys any price appreciation on
those securities.

A broker-dealer must be licensed in the state in which he conducts business, but there are no separate
licensing requirements for agents.

Agents are engaged exclusively in the purchase and sale of stocks whereas broker-dealers also buy
and sell bonds and option contracts.

Agents conduct their business exclusively in the secondary market, while broker-dealers also operate
in the primary market.

QUESTION 86
Mr. Teche is an agent with broker-dealer CanDo, and his only compensation is the commissions he earns
on trades he executes. He has applied for and been granted an adjunct teaching position with a local
university that will allow him to earn money while he is establishing himself. Which of the following
statements are true?

As an agent with broker-dealer CanDo, Mr. Teche must notify CanDo in writing of this position prior to
accepting it.

CanDo can deny Mr. Teche permission to accept the adjunct teaching position.

Mr. Teche is, in essence, an independent contractor with broker-dealer CanDo and can engage in any
other business activity at will.

Both A and B are true.

QUESTION 87
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 88
Which of the following persons falls under the definition of “broker-dealer,” as defined by the Uniform Securities Act (USA)?

Marge is a loan officer at Treadwater Bank and Trust.

Juan 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.

Michaela is employed by GetErDone broker-dealers and sells both exempt and non-exempt securities to GetErDone’s clients.

MyTrades is a sole proprietorship owned by Nathan Newmoney, who has established the firm solely to make trades on his own account, thereby avoiding the commissions he would have to pay a middleman.

QUESTION 89
Newbie Corporation is considering the possibility of an interstate initial public offering (IPO) of its stock. In
the initial meetings with BigFee Investment Bankers, Newbie has learned that the underwriting spread will
be 15%. Although the actual offering price won’t be set until Newbie’s registration statement is approved
by the SEC, BigFee has indicated that the offer price will probably be between $3 and $4 a share and that
the stock will initially be listed on the OTC Bulletin Board. What methods for state registration does
Newbie have available?
I. registration by coordination
II. registration by notification
III. registration by qualification

Newbie may elect to register by any one of the above methods although registration by qualification
would be the most burdensome choice.

Method I only

Methods I and III only

Method II only

QUESTION 90
Barring no irregularities (such as a license revocation by another state last year), after you have filed for registration as an agent, your license will be granted within

10 business days.

14 business days.

30 days.

45 days.