Unit 4

Question 1

If an adviser inadvertently receives client funds and/or securities, it can avoid the implication that it is maintaining custody of the assets by returning them to the sender within:

Answer 1

3 business days

Question 2

Under the Investment Advisers Act, the form that is filed annually with the SEC and determines an adviser’s continued eligibility for federal registration is called:

Answer 2

Annual Updating Amendment

Question 3

According to the Investment Advisers Act of 1940, when is an investment adviser required to provide an audited balance sheet to its clients?
When the adviser requires the prepayment of a fee that is greater than ______, __ months or more in advance of providing services.

Answer 3

$1,200; 6

Question 4

An advisory fee that increases and decreases proportionately with the investment record of an appropriate securities index is called a ____________

Answer 4

fulcrum fee

Question 5

Every year, IARs must complete __credits of Regulatory and Ethics continuing education (CE). __ of these credits must specifically cover ethics.

Answer 5

6; 3

Question 6

Every year, IARs who are not dually registered with FINRA as a registered representative must complete __ credits of Products and Practices CE.

Answer 6

6

Question 7

A brochure is not required for contracts with registered investment companies or when impersonal advisory service is being provided that costs less than $___ per year.

Answer 7

$500

Question 8

Form ADV is filed with the SEC within 90 days of a federal covered adviser’s ______ year end, or with the state Administrator(s) within 90 days of the ______ year end.

Answer 8

fiscal; calendar