Series63 PDF Exam Material 2024 Realistic Series63 Dumps Questions [Q18-Q42]

NEW QUESTION 18
Rich Quick is a broker-dealer licensed in the state of Massachusetts and has offices only within the state.
Two of Rich Quick’s clients regularly vacation in Florida during the winter months, and Rich Quick
executes trades for them when they call him from out-of-state. Based on these facts,
I. Rich Quick needs to register as a broker-dealer in the state of Florida as well.
II. Rich Quick needs to register only as an agent in the state of Florida.
III. Rich Quick needs to establish an office in the state of Florida in order to transact business.
IV. Rich Quick need not register in Florida.

Statements I and III are true.

Statements II and III are true.

Only Statement I is true.

Only Statement IV is true.

NEW QUESTION 19
Which of the following would not appear on an order ticket?

the stock symbol

the account number of the client buying or selling the security

the settlement date

the agent’s commission

NEW QUESTION 20
Which of the following is not a prohibited practice for broker-dealers under the NASAA Model Rules?

lending money to clients for them to invest

borrowing money from a client

charging commissions that are significantly higher than those charged by other broker-dealers

providing a client with a copy of their most recent balance sheet upon request

NEW QUESTION 21
Which of the following is not considered to be a person, as defined by the Uniform Securities Act?

a 16-year old cheerleader

a law firm that is organized as a partnership

a corporation

a school district

NEW QUESTION 22
In which of the following scenarios is an investment adviser representative required to disclose the fact
that someone other than the representative performed the research on which his advice to the client is
based?
I. The investment adviser representative recommends the same asset allocation for his client that a buddy
of his did after his buddy had done some research for a client with similar characteristics.
II. The investment adviser representative provides a recommendation for his client based on research
provided by a broker-dealer that provides the investment adviser with its analysts’ recommendations in
return for trades that the investment adviser executes using the services of the broker-dealer, as well as a
couple of other research sources he finds on the internet.
III. The investment adviser representative submitted his client’s information to a data base that provided a
recommendation for the asset allocation of the client’s investment monies that the adviser deemed was
sound and, therefore, recommended it to his client.

I only

II only

III only

I and III only

NEW QUESTION 23
You are an investment adviser to Mr. Crochety, an elderly man who lives solely on his social security income although he managed to accumulate an investment portfolio worth about $100,000 over the years. Mr.
Crochety recently got his hands on a business publication and read about the tax-free interest paid by municipal bonds. He calls you and instructs you to sell his other investments and invest all his money in a municipal bond portfolio, so that “the government doesn’t get any more of my hard-earned money.” You tell Mr. Crochety that you don’t believe this is a wise move because he’s in such a low tax bracket that municipal bonds are not a good investment for him, but he is insistent. Based on these facts, you should

ignore Mr. Crochety’s instruction since it is not in his best interest.

require Mr. Crochety to sign an affidavit of liability waiver, indicating that you will not be held responsible for any adverse consequences of this decision.

have Mr. Crochety sign a statement of investment policy that indicates that this transaction is being executed on the client’s instructions and that you have advised the client against it.

call Mr. Crochety’s relatives and suggest they have him examined for mental instability.

NEW QUESTION 24
Constance is an investment adviser representative. She told one of her clients that he should put at least
1 5% of his investment monies in a U.S. government bond mutual fund.
She explained that she believed that he required this percentage to meet his liquidity needs, and U.S.
government bond funds are risk-free. A few months later, the client needed to sell some of his fund shares
in order to pay some medical bills and was surprised to discover that he lost money on the sale because
the net asset value of the fund had dropped. Was Constance guilty of any securities violations?

Yes. Constance is guilty of fraud. She misled the client into thinking he couldn’t lose any money if he
invested the money in a U.S. government bond mutual fund.

Yes. Constance should never recommend that a client invest such a high percentage of his investment
monies in a U.S. government bond mutual fund.

No. U.S. government bonds are often referred to as risk-free investments, so Constance made no
misstatement of fact in telling her client this.

It depends. If Constance realized that the client could lose money in a U.S. government bond fund,
then she is guilty of fraud, but if she did not herself realize that, then she is merely misinformed.

NEW QUESTION 25
A-2-Z Associates advertises itself as a full service brokerage firm that will buy and sell securities for its clients, as well as provide investment advice to them. Its brochure provides a variety of plans to which a client can subscribe. The basic plan is the cheapest and allows the client a maximum number of trades per month for a specified fee. Another, slightly more expensive, plan provides the client with the same maximum number of trades per month, but the client also receives a personalized quarterly review of his portfolio along with advice for restructuring his portfolio based on such factors as current market conditions and specific industry or company information. The most expensive plan is one in which the client is assigned to an individual portfolio manager, who will take total responsibility for the asset allocation of the client’s portfolio and will provide the client with monthly reports. Based on the services A-2-Z provides, it must register with the state as:

a broker-dealer.

an investment adviser.

both a broker-dealer and an investment adviser.

an investment adviser representative.

NEW QUESTION 26
Once a person has filed an application with the Administrator, and in doing so has truthfully disclosed
every material fact, how long does the Administrator have after the effective date of the registration to
commence a proceeding to deny, suspend, or revoke that person’s license based on those facts?

30 days.

60 days.

90 days.

one year.

NEW QUESTION 27
Which of the following securities would be exempt from state registration requirements, according to the
Uniform Securities Act?
I. a municipal bond issued by the Canadian province of Nova Scotia
II. a bond issued by the county of Cork, Ireland
III. a bond issued by Nationwide Insurance Company

All of the selections would be exempt from state registration requirements under the Uniform

Selection I only

Selection I and III only

Selection III only

NEW QUESTION 28
Stu Pede is an agent with broker-dealer Cavalier. A customer calls with a request to establish a classic
IRA and asks for Stu’s advice regarding where the money in the IRA should be invested. Stu suggests a
municipal bond fund, explaining to his client that the interest income earned on it will be tax-free at the
federal level, and some of it may even be tax-free at the state and local levels. Has Stu engaged in any
prohibited practices?

Yes. Stu is an agent with a broker-dealer. He is not an investment adviser representative and is not
allowed to make recommendations regarding investments to the firm’s clients.

No. Although Stu has given investment advice, it was solicited by the client, and Stu received no
additional compensation for the advice.

Yes. Municipal bonds are not suitable investments for a classic IRA, and Stu can have his license
revoked or suspended.

No. Although municipal bonds are not suitable investments for a classic IRA, Stu obviously didn’t know
this and is merely guilty of stupidity.

NEW QUESTION 29
An agent working for a broker-dealer mistakenly sends an investment adviser some bonds that the
adviser purchased on behalf of his client instead of directing the bonds to the financial institution that is
serving as the qualified custodian of the client’s funds. If the investment adviser wants to avoid being
considered custodian of this client’s account, what must the adviser do?

Record what securities were sent, when he received them, and when he forwarded them–which

Record what securities were sent, when he received them, and when he forwarded them–which must
be within three business days-to his client.

Record what securities were sent, when he received them, and when he forwarded them–which must
be within twenty-four hours-to his client.

Record what securities were sent, when he received them, and when he forwarded them–which must
be within twenty-four hours-to the qualified custodian of the client’s funds.

NEW QUESTION 30
A broker-dealer is required to keep his records for how long?

at least three years

at least five years

at least seven years

broker-dealer is required to keep his records for as long as he is registered in the state.

NEW QUESTION 31
Which of the following scenarios describes activities that are disallowed under the NASAA Model Rules?
I. Broker-dealer Anon observes that a client placed a stop loss order to sell her 1,500 shares of Amazon.com stock for $131 when the stock was selling for $134. Anon sold the stock for $133 when it started to fall during the day and credited the client’s account with $131 per share when stock dropped further to $129 a share.
II. Penny is an agent with Broker-dealer Anon. She recently recommended that a client buy a stock that Penny thought would do well. As it turned out, Penny was wrong, and she offers to refund the commission that the client paid her.
III. Broker-dealer Anon is part of the selling group of a hot new IPO. As such, the firm purchases 50% of the shares for its own portfolio and sells the remainder to the public.

I only

I and II only

I and III only

I, II, and III

NEW QUESTION 32
A limited power-of-attorney gives the designated person the right to
I. order the sale of an asset owned by the account holder and have a check written to the account holder for the amount of the proceeds.
II. obtain account statements, including tax statements, on behalf of the account holder.
III. order the purchase of an asset for the account holder’s account.

I, II, and III

I and II only

II and III only

I and III only

NEW QUESTION 33
Mr. Bigwig, CEO of HiGrowth Corporation, meets with the president of BigFee Investment Bankers and arranges for BigFee to underwrite an Initial Public Offering (IPO) for the firm.
When the IPO comes to market, GetErDone Broker-Dealers is part of the selling group, which handles the sale of the stock to the public. In this scenario, which party is the issuer?

HiGrowth Corporation

Mr. Bigwig

BigFee Investment Bankers

GetErDone Broker-Dealers

NEW QUESTION 34
uestion No: 124
Jack and Jill are a newly married couple in their mid-20s. They are determined to retire by the time they are 50 and have arranged a meeting with a representative of Professional Investment Advisers to structure a financial plan that will allow them to achieve this goal.
The representative, Mr. Hill, advises them to invest at least 60% of their money in bond funds to minimize the risk of loss on the way to their goal. Mr. Hill has

made an unsuitable recommendation for these clients and is subject to license suspension or revocation.

advised Jack and Jill well with a conservative allocation of their money to preserve principal.

committed fraud in indicating that bonds are less risky than stocks.

has committed fraud in promoting their delusion that they can possibly expect to retire by the time they turn 50, regardless of their investment strategy.

NEW QUESTION 35
The current yield on a bond fund refers to

the percentage increase in the fund’s net asset value.

the return that the fund earned because of the capital appreciation of the securities in the fund.

the total return that the fund has earned over the most recent 12-month period.

the return that the fund earned based only on the interest income it received

NEW QUESTION 36
Which of the following does not describe a prohibited practice for broker-dealers under the NASAA Model Rules?
I. SecureMoney Broker-Dealers has received a request from a client who wants SecureMoney to “identify a few solid firms in the Asian market and invest up to $20,000 in them.” SecureMoney executes the purchases and receives the requisite signed discretionary authorization from the client before the settlement date.
II. CanDo Broker-Dealers executes a margin transaction for a client, promptly receiving a signed, written margin agreement from the client after the transaction takes place.
III. GetErDone Broker-Dealers receives a call from a client who wants to purchase some securities on margin.
GetErDone has the client come into the office to sign a properly executed margin agreement prior to effecting the transaction.

None of the selections are prohibited practices.

I and III only

II and III only

III only

NEW QUESTION 37
A hypothecation agreement refers to

an agreement wherein a client gives his broker-dealer discretion to purchase securities that the
broker-dealer deems appropriate in whatever quantity the broker-dealer feels appropriate and at a time
and price the broker-dealer believes is a good deal.

an agreement that a client must sign prior to executing any short sales with the broker-dealer.

an agreement signed by a client who is executing a margin transaction that allows the broker to hold
the margined securities in street name as collateral for the loan.

a document signed by a client indicating that he or she understands that some of the charts and
examples presented in a broker-dealer’s advertising literature are based on hypothetical trades.

NEW QUESTION 38
Desi Genuos is an agent with Broker-Dealer CanDo. A client has asked Desi to recommend a mutual fund that does not have a sales charge. Desi recommends a fund that has no front-end load although it does have a deferred sales load if the investor redeems his shares within the first three years of ownership, but the client has informed Desi that he is looking at this as a long-term investment. Based on these facts, Desi

is in violation of NASAA rules regarding investment company shares.

is not in violation of any rules since the fund has no front-end load and the deferred sales load will not apply to this client, given his indication that this is meant to be a long-term investment.

will not be in violation of any NASAA rules as long as he has his client sign a “letter of intent.”

is not in violation of any rules because he is an agent of a broker-dealer and is not affiliated with the fund he has recommended in any manner.

NEW QUESTION 39
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

NEW QUESTION 40
Which of the following orders can an Administrator issue without providing prior notice?

license suspension

license revocation

cease and desist

license denial

NEW QUESTION 41
In which of the following cases is an investment adviser allowed to be compensated with a share of the
capital gains of the client’s portfolio?
I. The client is a mutual fund.
II. The client is a credit union.
III. The client is a private client whose minimum net worth is $1 million or more.
IV. The client is a private client who has at least $750,000 invested through the investment adviser.

I and II only

I, II, and III only

I, II, and IV only

none of the above. An investment adviser is never allowed to share in the capital gains earned on

NEW QUESTION 42
Finn Nance has recently passed his CFP exam and is now a certified financial planner. He has new business cards printed that have the words “Certified Financial Planner” printed under his picture. In doing so,

Finn has not violated any laws or engaged in any prohibited practices.

Finn has violated a securities law. The Uniform Securities Act prohibits anyone from using the word
“certified” on any advertisement for services.

Finn has possibly violated a state securities regulation. The Administrator in many states prohibits the use of the word “certified” on any advertisement for services.

Finn is not in violation of any laws as long as he has notified the state Administrator of his new designation and his new logo.