Q129. An individual who represents a broker-dealer in the buying and selling of securities is called a(n):

Q130. The trade confirmation must be received by the customer no later than

Q131. Broker-dealer Small & Associates has received a complaint about one of its agents, Mr. Ari Gaunt. Small
& Associates is required to

Q132. An investment adviser representative with Capital Investment Advisors, Inc. advised his client to invest
$ 5,000 in bonds of a firm that the adviser claimed was an investment “almost as risk-free as investing in
U.S. government bonds; maybe even more so, given the magnitude of the government deficit these
days.” The client paid a total of $200 for this advice. The bonds paid interest at the rate of 6%, with
semiannual payments, and the client received $300 in interest payments before the firm went belly-up at
the end of a year, and its bonds were deemed worthless. The client has filed suit, and its attorneys’ fees
and court costs are expected to be $1,000. When the investment is a bond, the state has recently been
assessing an interest rate equal to the interest rate paid by the security as an equitable interest payment
guideline in civil penalties. The maximum the client can expect in civil penalties is

Q133. A broker-dealer will be found guilty of churning an account if the account has a turnover ratio of

Q134. Once a broker-dealer has applied for and been granted state registration, the registration remains valid

Q135. Blue Sky Laws are designed to:

Q136. Trevor is currently a registered agent in the state of Connecticut where he has been employed by Connect
& Company, a broker-dealer that is registered in Connecticut and has subsidiary operations in
Massachusetts, New Jersey, and New York. Trevor has moved to Massachusetts and is now associated
with one of Connect’s subsidiaries, a broker-dealer registered in the state. Trevor has applied to the
Administrator of Massachusetts for registration as an agent. Can Trevor execute purchases and sales for
clients while his registration is still pending?

Q137. The trade confirmation must be received by the customer no later than

Q138. Broker-Dealer Wheeler has no offices in the state. Wheeler does, however, sell corporate bonds from his
portfolio to banks and insurance companies located in the state that purchase the bonds for their
investment portfolios. He executes about twelve of these transactions a year. Wheeler profits from the
price appreciation of the bonds during the time he held them, but receives no other form of compensation.
Based on these facts,

Q139. No: 93
The net worth of a broker-dealer has fallen below the minimum net capital requirement specified by the state in which the broker-dealer is registered. This broker-dealer must notify the Administrator of this fact

Q140. Which of the following is not considered to be a security, as defined by the Uniform Securities Act (USA)?

Q141. Under which of the following scenarios can a client legitimately sue a purported professional in the securities industry and expect an award for damages?
I. The securities were sold by an agent whose registration was not yet effective with the state, but who had already applied for registration.
II. The security was a variable annuity, and the sales representative neglected to reveal the details of the surrender clause to the client.
III. The security was the stock of a company, the stock had recently been registered with the state for sale, had been granted registration, and the selling agent had told his client that the security had been state-approved for sale.

Q142. Which of the following entities is subject to be accused of churning?
I. investment advisers
II. investment adviser representatives
III. broker-dealers
IV. agents

Q143. In which of the following scenarios will the investment adviser be subject to criminal fraud charges?

Q144. A-2-Z Associates is a full service brokerage and is also in the investment advisory industry, charging its
clients for investment advice for additional remuneration. Which of the following statements is true?

Q145. You are employed as an agent with CanDo Broker-Dealers. Your brother is software engineer with
VideoMagic. When you were talking to him on the phone the other day, he told you that he overheard a
conversation by some of the firm’s executives that indicated that VideoMagic was about to take over
another software company. Which of the following would violate insider trading rules?
I. The next day, you get an unsolicited call from a client requesting that you sell his shares in Video Magic,
and you execute the trade.
II. You buy stock in Video Magic’s target firm in anticipation that its stock price will rise when the
information becomes public.
III. You recommend the stock of Video Magic’s target firm to investors based on the fact that, on average,
the stock price of target firms increases.

Q146. Which of the following trades is illegal?

Q147. The current yield on a bond fund refers to

Q148. Which of the following would not appear on an order ticket?

Q149. A bond issue has recently been registered with the state Administrator.
Which of the following statements are true?

Q150. In its prospectus, the YourMoney Mutual Fund provides charts and tables of its average annual return
over the past year, three years, five years, and ten years. The fund’s return has indeed been phenomenal
over this time period, beating the S&P 500 Index by at least 15%. The prospectus states that this is
because the fund invests in securities that are riskier and that, therefore, an investor can expect the fund
to continue earning a return higher than the S&P 500 Index. Is YourMoney guilty of any security
violations?

Q151. If a person has had its license revoked by the Administrator of the state and has appealed the decision to a court of law, that person