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Unit 8 questions and answers certified 2024
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Unit 8 questions and answers certified 2024
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Unit 8.6 The Securities Exchange Act of1934 (Series 65)
Which of the following statements regarding discretionary accounts is TRUE?
A) A branch manager must approve discretionary orders before entry.
B) A principal must approve discretionary orders before entry.
C) An order in which an investor designates the security's name, the number
of shares, and whether to buy or sell and gives the agent discretion as to time
and price only is not considered discretionary.
D) The rules regarding churning of accounts do not apply to discretionary
accounts. - correct answer ✔Answer: C
An order is discretionary only if an agent selects the size of the trade, the
security, or whether to buy or sell. Selecting only price and/or time does not
constitute discretion. Churning rules apply to discretionary accounts, and a
principal must approve order tickets after the trades, not before.
Reference: 8.6.2.15 in the License Exam Manual.
The Securities Exchange Act of 1934 regulates or mandates each of the
following EXCEPT:
A) creation of the SEC.
B) manipulation of the secondary market.
C) extension of credit to customers.
D) full and fair disclosure on new offerings. - correct answer ✔Answer: D
,The Securities Exchange Act of 1934 created the SEC and regulates the
secondary market. The Securities Exchange Act of 1934 does not address full
and fair disclosure issues; the Securities Act of 1933 addresses such issues.
Reference: 8.6 in the License Exam Manual.
Which of the following acts requires publicly traded corporations to issue
annual reports?
A) Investment Company Act of 1940.
B) Securities Exchange Act of 1934.
C) Securities Act of 1933.
D) Trust Indenture Act of 1939. - correct answer ✔Answer: D
The Securities Exchange Act of 1934 mandates that public issuers file annual
and quarterly reports with the SEC.
Reference: 8.6 in the License Exam Manual.
The Securities Exchange Act of 1934 covers all of the following EXCEPT:
A) issuance of financial reports by corporations.
,B) issuance of corporate securities.
C) trading on exchanges.
D) trading of corporate securities. - correct answer ✔Answer: B
The Securities Exchange Act of 1934 regulates secondary trading or trading
markets, including reporting requirements. The Securities Act of 1933
regulates the issuance of new, nonexempt securities.
Reference: 8.6 in the License Exam Manual.
Under federal law, which act regulates the activities of broker/dealers and
associated persons?
A) Uniform Securities Act.
B) Securities Exchange Act of 1934.
C) Investment Company Act of 1940.
D) Trust Indenture Act of 1939. - correct answer ✔Answer: B
The Securities Exchange Act of 1934 regulates the secondary market and its
employees and firms.
Reference: 8.6 in the License Exam Manual.
, Which of the following is regulated by the Securities Exchange Act of 1934?
A) Exemptions of new issues from registration requirements.
B) Requirements for the provisions of a prospectus.
C) Registration of new issues of stock.
D) Regulation of exchanges. - correct answer ✔Answer: D
The purpose of the Securities Exchange Act of 1934 is to regulate secondary
market trading of securities that have already been issued. It created the SEC
and requires that all securities exchanges and firms register with the SEC if
they are involved in interstate commerce. It was the Securities Act of 1933
that dealt with registration and exemption from registration of new issues and
prospectus delivery requirements.
Reference: 8.6 in the License Exam Manual.
What is the purpose of the Securities Exchange Act of 1934?
A) It regulates the persons involved in the secondary market.
B) It provides requirements relating to new issues.
C) It provides policies relating to unethical business practices.
D) It provides standards among the states. - correct answer ✔Answer: A
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