[Jul 01, 2024] New FINRA Series63 Dumps with Test Engine and PDF (New Questions) [Q108-Q127]

QUESTION 108
Kevin has a pair of season tickets to the Boston Red Sox games. He and his wife can’t attend all the
games themselves, so Kevin has created “packages” of eight games each that he is listing for sale on
Craig’s List. Do these “packages” meet the definition of securities, and, if so, does Kevin need to register
them with the state before offering them for sale?

If Kevin will be profiting from the sale of the packages, the packages are defined to be securities, but
since he’s selling the packages to only a few people, he will not have to register them with the state.
(Kevin may, however, be guilty of violating ticket scalping laws.)

Only if Kevin will be selling the packages at or below cost are the packages not considered to be
securities, in which case Kevin will not have to register them with the state.

The packages are not considered to be securities since each package is merely a purchase and sale
agreement between Kevin and another person. There is no third party involved. Because they do not
meet the definition of securities, Kevin does not need to register them with the state.

Statements A and B are both true statements.

QUESTION 109
S. White and Associates is an investment adviser registered in the state of Kentucky and, as such, is
meeting Kentucky’s minimum net capital requirement for investment advisers. The firm recently registered
with the state of Virginia and has opened an office there. Virginia has a significantly higher net capital
requirement for its investment advisers. Which of the following statements is true?

According to the Uniform Securities Act, S. White will have to meet Virginia’s higher requirement.

According to the Investment Advisers Act of 1940, S. White needs only to meet the net capital
requirement of Kentucky.

According to the Securities Exchange Act of 1934, S. White needs to meet at least the minimum net
capital requirement specified by that Act since it is now operating in multiple states.

According to the Investment Advisers Act of 1940, S. White will have to maintain a minimum net capital
equal to the average of the net capital requirements of the two states.

QUESTION 110
Which of the following would be considered an “issuer” transaction?

Jacob calls his broker and places an order to purchase 100 shares of Hasbro, Inc. on the open market.

Maria purchases 500 shares of Dodge and Cox’s International Fund, a mutual fund investing in foreign securities.

Kim sells an AT&T bond she holds that still has three years remaining to maturity.

None of the above is an “issuer” transaction.

QUESTION 111
Which of the following compensation arrangements between an investment adviser and an individual client with a net worth of $600,000 would be disallowed?

The client agrees to pay the investment adviser an hourly fee of $60.00.

The investment adviser will receive 0.1% of the total value of the client’s assets under management as of the end of each month.

The investment adviser will receive 0.1% of the gross capital gains earned on the portfolio each quarter.

All of the above are legitimate compensation arrangements between and investment adviser and an individual client with a net worth of $600,000.

QUESTION 112
A “notice filing” refers to

the right of an issuer to run tombstone ads in the newspapers and other publications upon filing a
registration application with the state Administrator.

the filing by a federal covered investment adviser of forms already filed with the SEC along with a
consent to service of process with the state Administrator.

a document that the issuer must file with the SEC informing the SEC that the firm has applied to the
state for registration of its new security.

notification to the public by the issuer or its underwriters that the issue is being sold on an “all or
nothing” basis.

QUESTION 113
Noah Scruples, an agent with CanDo Broker-Dealers, just got a copy of the most recent report on a certain stock. The report was generated by CanDo’s analyst department and is hot off the presses. It has not yet even been put on the firm’s website for the firm’s clients.
The analyst department has just changed its recommendation on the stock from “Hold” to “Strong Buy” based on new information that it has obtained on the company.
Can Noah rush to his office to buy shares of the stock before the analysts release their reports to CanDo’s clients?

Yes. The firm’s analysts used publicly available information to assess the stock and make its recommendation, so Noah can buy the stock now on his own account.

No. It is unethical for him to trade based on this information before the firm’s clients have received the information.

No. This is a prohibited activity referred to as “painting the tape.”

Both B and C are true statements.

QUESTION 114
Which of the following statements about agents is (are) false?

If an agent files for bankruptcy, the Administrator may elect to terminate that agent’s registration if the
Administrator believes it is “in the public interest” to do so.

When an agent has a change of address, both he and his broker-dealer affiliate must inform the
Administrator.

An agent must demonstrate a specific minimum level of financial stability for his registration application
to be accepted.

All of the above are false statements.

QUESTION 115
Which of the following entities is subject to be accused of churning?
I. investment advisers
II. investment adviser representatives
III. broker-dealers
IV. agents

II and IV only

I and III only

II, III, and IV only

I, II, III, and IV

QUESTION 116
Which of the following orders can an Administrator issue without providing prior notice?

license suspension

license revocation

cease and desist

license denial

QUESTION 117
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.

QUESTION 118
The Administrator may not introduce a stop order to deny, revoke, or suspend the effective registration of
a security based on facts that were disclosed during the registration process unless he does so within

30 days.

45 days.

60 days.

1 year.

QUESTION 119
BigCash Broker-Dealers is registered in the state and is in the process of purchasing a smaller broker-dealer, Target Investments, as a subsidiary. Target Investments is also registered in the state.
After completing the purchase, what actions must BigCash take regarding registration of its new subsidiary?

BigCash need do nothing since Target Investments was already duly registered with the state as a broker-dealer.

BigCash must file a new application with the state to register its new subsidiary, but will be able to utilize the remainder of any annual filing fees that Target Investments had paid for the year.

BigCash must file a new application with the state to register its new subsidiary and must also pay the annual filing fees required by the Administrator.

BigCash will need to pay the annual filing fees required by the Administrator, but will not need to file a new registration application.

QUESTION 120
An individual who represents a broker-dealer in the buying and selling of securities is called a(n):

underwriter

issuer

agent

administrator

QUESTION 121
BondsRUs is a broker-dealer that (unsurprisingly) specializes in bonds. The firm has found that it is able
to sell Treasury bonds that it buys for $90 per $100 of par value for $99 per $100 of par value to some of
its more naive clients, who never pay attention to the confirmation statements BondsRUs sends them.
BondsRUs is guilty of

nothing. It is acting as a dealer in bonds and, as such, can charge its clients whatever the clients are
willing to pay.

overcharging its clients by unreasonable markups. A $9 dealer’s spread on Treasury bonds is
unwarranted.

fraud.

both B and C.

QUESTION 122
Which of the following are accurate statements regarding the minimum financial requirements for investment advisers according to the NASAA Model Rules?
I. Any investment adviser who has discretionary authority over a client’s assets, but who does not have actual custody of client funds or securities, is required to maintain a minimum net worth of $10,000 at all times.
II. An investment adviser who requires that a fee of more than $500 from his clients be paid six months or more in advance must maintain a positive net worth at all times.
III. Only an investment adviser who has actual custody of client assets is subject to a minimum net worth requirement, which the NASAA Model Rules specifies is $10,000.

I only

I and II only

II and III only

III only

QUESTION 123
The settlement date refers to

the date the order to purchase or sell the security is sent to the market.

the date the buyer must pay for the securities purchased.

the date the order to purchase or sell a security is actually executed. This may differ from the date that the order is sent to the market in the cases of limit or stop orders.

the latest date on which broker-dealers can file their quarterly financial statements with the Administrator of the state.

QUESTION 124
Vious and Associates is a small broker-dealer trying to generate more business. To this end, the firm had a professional four-color brochure printed that provides the years of industry experience of its management along with other information. The firm’s founder, Ms. D. Vious, is listed as having over 30 years of experience in the industry. Ms. D. Vious has worked for broker-dealers for over 30 years, but for 20 of those 30 years, she was a secretary.
Has D. Vious violated any securities laws?

No. Technically, Ms. D. Vious does have over 30 years of experience in the industry, even though it was not in the capacity of an agent or a broker-dealer.

No. Ms. D. Vious’ years of experience is not a material fact that would affect an investor’s investment decision.

Yes. The broker-dealer is making a misleading statement in an advertising brochure in order to convince investors to do business with the firm.

No. Advertising brochures are not securities.

QUESTION 125
For how long after the effective date is a security’s registration valid?

three months

six months

one year

two years

QUESTION 126
Layered Corporation wants to issue a bond that will have warrants attached. Each warrant gives the
holder the right to buy 5 shares of Layered’s common stock at a price stipulated on the warrant. In this
instance, Layered must file to register which of the following securities with the state?
I. the bonds
II. the warrants
III. the common stock

I only

I and III only

I and II only

I, II, and III

QUESTION 127
Which of the following conditions is necessary for an act involving securities fraud to be considered
criminal and subject to criminal penalties?

The act extended across state lines.

The perpetrator willfully committed the fraudulent act.

The victim(s) lost a combined total of at least $25,000 because of the act.

The Administrator decides to send the case to criminal court.