Series 65 final Exam prep * || with Complete Solutions.
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Course
Series 65
Institution
Series 65
Which of the following items does NOT fall within the Section 28(e) safe harbor?
A)
Software used to analyze client's portfolios
B)
Research reports prepared by a third party other than the broker-dealer
C)
Proprietary research reports analyzing the performance of a specific industry
D)
Sof...
Series 65 final Exam prep * || with Complete Solutions.
Which of the following items does NOT fall within the Section 28(e) safe harbor?
A)
Software used to analyze client's portfolios
B)
Research reports prepared by a third party other than the broker-dealer
C)
Proprietary research reports analyzing the performance of a specific industry
D)
Software used to simplify the investment adviser's preparation of its tax returns correct answers d
(Research reports, whether prepared by the firm or by a third party, fall within the safe harbor
provisions of Section 28(e). Software used to analyze securities is also permissible since that
benefits the client. Tax preparation software benefits the adviser, but not the client.)
An investor concerned about liquidity would be least likely to invest in
A)
cumulative preferred stock
B)
stock subject to Rule 144
C)
common stock listed on the New York Stock Exchange
D)
ADRs correct answers b
(In most cases, stock subject to Rule 144 is stock that cannot be immediately resold. That is why
it is known as restricted stock.)
In order to make a quantitative evaluation using the present value computation, which of the
following is NOT needed?
A)
Account value at the beginning of the period
B)
Account value at the end of the period
C)
Time period involved
D)
Anticipated rate of return of the portfolio correct answers a
(Present value is calculated to determine the amount required now to have a specified value at
some time in the future. It is what we are looking for so we don't have it now.)
As specified in the Dodd-Frank Act of 2010, which of the following would NOT qualify for the
private fund exemption?
A)
,An investment adviser who limits its advisory services to private funds with less than $150
million in assets under management in the United States
B)
A non-U.S. based investment adviser with no place of business in the United States and less than
$25 million in assets under management belonging to U.S. clients
C)
An investment adviser who limits its advisory services to venture capital funds
D)
An investment adviser who limits its advisory services to insurance companies correct answers d
(The Dodd-Frank Act tells us that we're referring to federal law. Although investment advisers
dealing solely with insurance companies are exempt from registration, that is not the private fund
exemption the question is asking about.)
A U.S. Treasury bond's price has moved from 96.18 to 96.22. An investor's account holding 10
of these bonds would show an increase of
A)
$4.00
B)
$1.25
C)
$.40
D)
$12.50 correct answers d
(U.S. Treasury bonds are quoted in 32nds, where the difference between 96.22 and 96.18
represents an increase of 4/32nds per bond. That is one-eighth, or $1.25, times 10 bonds, or
$12.50)
Individuals who pass the Series 65 exam will be able to tell prospects that
A)
their investments will be offered protection by the anti-fraud statutes of the Uniform Securities
Act
B)
this indicates the regulatory bodies consider them qualified to manage money
C)
they passed a 130-question examination in order to qualify as an IAR
D)
by passing the exam, they are now registered as investment adviser representatives with the SEC
correct answers c
(Passing the exam allows you make no claims other than that it was a requirement for licensure.
And you're not registered with the SEC, only with the state(s).)
The discounted rate that equates a bond's cash flow to its current price is known as the bond's
A)
, duration
B)
coupon rate
C)
current yield
D)
yield to maturity correct answers d
(The yield to maturity of a bond considers the accretion of any discount or amortization of any
premium as well as the annual coupon rate, taking into consideration the time value of money.)
in which of the following cases does exercise not involve the issuer of the underlying asset?
A)
A warrant
B)
A right
C)
An option
D)
A convertible bond correct answers c
(When an option is exercised, the seller (writer) of the option is the one who must deliver (call)
or purchase (put). In all of the other choices, the issuer is the one who delivers the stock.)
Which of the following would probably be the best indicator of where the economy is headed?
A)
Average duration of unemployment
B)
Average prime rate
C)
Permits for construction of new housing units
D)
Industrial production correct answers c
(The question is looking for a leading indicator and, of the list, only new building permits fits.
Industrial production is a coincident indicator, while the other two choices are lagging.)
On the basis of IRS guidelines, which of the following is most likely eligible to contribute to a
Keogh plan?
A)
A public school teacher who gets paid during her summer vacation to give motivational speeches
to training directors at major brokerage firms
B)
While employed full time for a major department store, a clerk who won $10,000 playing the
state lottery
C)
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