Unit 1

Question 1

Under USA what’s are the Maximum penalties for a securities related felony

Answer 1

$5000 3 years in prison

Question 2

Order ticket includes

Answer 2

1. Account number
2. Agents name
3. Broker dealers name
4. Number of shares, limit

Not included:
Market price

Question 3

Investment companies must send reports to shareholders.

Answer 3

Semi annually

Question 4

Entanglement

Answer 4

BD explicitly or implicitly endorses or approves the content of a third party

Question 5

Exempt security

Answer 5

Securities that are exempt from state registration.

Ex:

• US and Canadian government and municipal securities
• foreign government securities
• depository institutions
• insurance company securities
• public utility securities
• federal covered securities
• securities issued by nonprofit organizations
• securities issued by nonprofit cooperatives
• securities of employee benefit plan
• commercial paper, bankers acceptances

Question 6

Exempt transaction

Answer 6

Exempt from regulatory control of the state administrator.

Question 7

Business continuity and succession plan

Answer 7

Every investment advisor shall establish, implement, and maintain written procedures relating to a business continuity plan.

Question 8

What are not securities?

Answer 8

• Insurance that isn’t variable
• interest in a retirement plan
• collectables
• commodities
• condominiums
• currency

Question 9

A Sale includes

Question 10

Offer to sale or offer is

Answer 10

• any security delivered with, or as a bonus of an account of, a purchase of securities or anything else(car, jewlary)
• a purported gift of assessable stock.
• sale or offer of a warrant

Question 11

What 3 expenses involving brokerage accounts are not included in the fee disclosure template?

Answer 11

1. Commissions
2. Mark ups or downs
3. Advisory fees

Question 12

What is found on an order ticket?

Answer 12

• Account number
• Execution price
• Time of entry and execution
• terms and conditions of the order (limit, market, stop)

Question 13

Technical analyst

Answer 13

Attempts to identify trends so they can predict market changes.
They review past performance using charts and graphs.

Question 14

Fundamental analyst

Answer 14

Attempts to value a stock by examining a company’s financial condition and growth potential.

Question 15

Fees not included in disclosure agreement

Answer 15

1. Commissions
2. Mark up and markdowns
3. Advisory fees

Question 16

Assessable stock

Answer 16

Stock issued below par value