Series 63 sample questions

Question 1

Joe Treader is the owner of a small, state-registered investment advisory firm that is on the verge of becoming insolvent. One of his clients who has become like a mother to him is aware of his financial difficulties and has offered to sell off some of the assets that he manages for her and loan him the money to get him through this period of economic uncertainty until he is able to get on his feet again.

Can Joe take her up on her offer?

Accepted Answer

No. As the client’s investment adviser, he has a fiduciary relationship with the client. Entering a loan agreement with this client could lead to conflicts of interest.

Answer

Yes. Based on the facts presented, it is an unsolicited offer and, as such, Joe can (and should) accept it.

Answer

Yes, but only if Joe draws up a formal loan agreement with a fair interest rate, based on the going market rates, stated in the agreement as well as a firm date for principal repayment.

Answer

Both A and B are true.

Question 2

Which of the following orders can an Administrator issue without providing prior notice?

Accepted Answer

cease and desist

Answer

license suspension

Answer

license revocation

Answer

license denial

Question 3

Don is a state-registered agent with GetErDone Broker-Dealers. He has three other friends who are licensed agents-Huey, Dewey, and Louie. Huey is also an agent with GetErDone Broker-Dealers.
Dewey is an agent with a different firm in the same city, CanDo Broker-Dealers. Louie works for a Broker-Dealer with an office just across the state line.

Don can enter a commission-splitting agreement with

Accepted Answer

Huey only

Answer

either Huey or Dewey or both

Answer

Dewey only

Answer

Either Huey, Dewey, or Louie or any combination of the three

Question 4

According to the NASAA Model Rules, a broker-dealer is not permitted to allow a customer to engage in margin transactions unless

Accepted Answer

the broker-dealer receives a margin agreement signed by the client promptly after the client’s first margin transaction.

Answer

the broker-dealer already has a margin agreement signed by the client in hand.

Answer

the client has a net worth of at least $500,000.

Answer

the client has been a customer of the firm for at least 6 months.

Question 5

Which of the following would fall under the definition of “agent,” as defined by the Uniform Securities Act (USA)?

Accepted Answer

None of the above would fall under the definition of “agent,” as defined by the Uniform Securities Act (USA.)

Answer

Joe works as an administrative assistant for broker-dealer GetErDone, doing data entry, filing client forms that contain confidential information, and directing calls to registered representatives of the firm.

Answer

Freedom broker-dealers executes the purchase and sale of securities for its customers.

Answer

TrustUs Bank has a subsidiary operation that sells mutual funds to the publi

Question 6

Which of the following entities would be required to register with the state as a broker-dealer under the guidelines of the Uniform Securities Act (USA)?

Accepted Answer

None of the above entities would be required to register with the state as a broker-dealer under the guidelines of the Uniform Securities Act.

Answer

an underwriter with no offices in the state that is helping a firm that is incorporated within the state with the sale of its new bond issue to insurance companies.

Answer

a credit union that operates within the state and provides loans to its members.

Answer

an agent who executes the purchase and sale of stocks and bonds for his clients.

Question 7

Which of the following is a security as defined by the Uniform Securities Act (USA)?

Accepted Answer

Both A and B are securities as defined by the Uniform Securities Act.

Answer

a debenture

Answer

a futures option contract on wheat

Answer

a term life insurance policy

Question 8

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

Accepted Answer

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

Answer

fraud.

Answer

churning.

Answer

churning.

Free Series 63 sample questions

Which of the following orders can an Administrator issue without providing prior notice?

According to the NASAA Model Rules, a broker-dealer is not permitted to allow a customer to engage in margin transactions unless

Which of the following would fall under the definition of “agent,” as defined by the Uniform Securities Act (USA)?

Which of the following entities would be required to register with the state as a broker-dealer under the guidelines of the Uniform Securities Act (USA)?

Alice Wonder called her broker on Tuesday, August 10th, with a market order to buy 10 calls on the stock of Abbott Laboratories. Under normal conditions, Alice will have to pay for the calls on

Which of the following is a security as defined by the Uniform Securities Act (USA)?

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

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