FINRA Series 63 Exam Dumps (V8.02) with Expert-Reviewed Questions and Answers – Check Series 63 Free Dumps (Part 1, Q1-Q40) First

1. George Geek is a computer programmer who tired of working for others and started his own company. He convinced forty investors that he could design software that would rival Microsoft, and sold them each a 10% partnership interest in his firm for $25,000. He designed and printed up the partnership certificates himself. George told the investors that he had a product that was on the verge of being marketable and that when it did-within the next two months-revenues would pour into the company, and he would begin paying dividends. He told them they could expect a 20% return on their money this year, with even higher returns in the years to come. As it turned out, George wasn’t quite the programmer he thought he was, and he wasn’t able to get all the bugs out of the program to make it marketable within the promised two months.

Within a year, George had tired of the project and was too busy picking up chicks in his new Corvette when he wasn’t on the island of St. Bart overseeing the construction of his new beach mansion-and picking up chicks. His activities, of course, were financed by the extremely generous “salary” he paid himself from the investors’ monies.

Under the Uniform Securities Act, do the investors have any civil claims against George?

2. Which of the following statements best explains the difference between an agent and a broker-dealer?

3. MoeMoney Investment Advisers, LLC is registered in the state of Texas, and its three offices are all located in the greater Dallas-Fort Worth area. Five of its clients-all individuals-have relocated to Colorado and all have indicated a desire to retain the services of MoeMoney. In order for this to be possible,

4. 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?

5. Which of the following is not considered to be a security, as defined by the Uniform Securities Act (USA)?

6. You have passed the necessary exams (congratulations!) and are applying for registration as a securities agent. It is already the end of September. Therefore, you must pay

7. 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?

8. A variable annuity is:

9. The net worth of a broker-dealer has fallen below the minimum net capital requirement specified by the state in which the broker-dealer is registered. This broker-dealer must notify the Administrator of this fact

10. Julia Hasty has recently applied with the Administrator to be a registered investment adviser in the state. Eager to open her new business, she has business cards printed that indicate that she is a “state-registered” investment adviser and visits some local businesses, asking them for permission to put some of her cards in their waiting rooms.

Has Julia violated any of the provisions of the Uniform Securities Act by distributing her business cards?

11. 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?

12. Until yesterday Maddie was a registered agent employed by the broker-dealer, QuikDeals. Yesterday afternoon, issues that had been brewing between her and another employee of the firm came to a head, and Maddie impulsively quit her job.

At this point,

13. The 2003 NASAA Model Rule requires that investment advisers that are not federal covered maintain their records for at least

14. Which of the following describes an investment adviser that is not required to register with the state Administrator?

15. Which of the following would fall under the definition of “agent,” as defined by the Uniform Securities Act (USA)?

16. Which of the following describes an “exempt security,” as defined by the Uniform Securities Act (USA)?

17. A broker-dealer is required to keep his records for how long?

18. Which of the following actions is the Administrator of a state empowered to take?

19. 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

20. Which of the following statements regarding the registration of broker-dealers and investment advisers is true?

21. Sam Shade had his agent’s license revoked by the state of Washington for repeatedly making misleading claims about various investment to investors. He had had it with all the rain anyway and decided to move to the sunshine state of Florid

a. His brother-in-law was a computer whiz who made money on the side (more than his day job provided, in fact) by supplying illegal immigrants with official-looking documentation, including social security numbers. Sam Shade became Ian Creed in a few clicks of the mouse. As Ian Creed, Sam was hired by Sunny Investment Advisers, an investment adviser firm located in the Florida Keys, in a clerical role. As such, Sam/Ian had access to the confidential information of the firm’s clients, which he and his brother-in-law utilized for the purpose of identity theft. Under the Uniform Securities Act guidelines, when Sam and his brother-in-law are caught in their illegal activities,

22. Which of the following statements regarding an investment adviser representative who has an office in the state is true?

23. Jeremy Sly considered himself somewhat of an inventor. The only problem was that his day job interfered with his opportunity to exercise his creativity. He came up with a plan to get outside investors to support his inventive activities. To this end, he produced and distributed a brochure advertising partnership interests with a guaranteed return on investment of at least 15% after the first 12 months, based on what he had allegedly generated from his other (non-existent) inventions.

Given these facts, is Jeremy guilty of any security violations under the Uniform Securities Act (USA)?

24. After passing the necessary exams, you must submit which of the following to the state Administrator when applying for registration as an agent?

25. Once you have passed the Series 63 examination, which entity must then approve your application to sell securities?

26. Which of the following is not one of the criteria for a security to be eligible for registration by notification?

27. Erin is a registered agent who works for SecureMoney Brokers-dealers. One of her clients, Mrs. McTurk, is a recently-widowed woman who relies on Erin for advice about her investment portfolio. Mrs. McTurk reminds Erin of her own grandmother, and she is happy to provide guidance within the sphere of her own knowledge.

Based on these facts, which of the following statements is true?

28. Which of the following entities would be required to register with the state as a broker-dealer under the guidelines of the Uniform Securities Act (USA)?

29. While on vacation in Colorado, Mr. Moneybags became interested in the stock of a company called SafeAway, which designs and installs customized high-tech security systems in the multimillion dollar mansions located in Colorado’s pricier ski resort areas, such as Vail and Aspen. Upon returning to his home in Boston, he calls his broker-dealer with an order to purchase 10,000 shares of the stock, which he learned trades in the over-the-counter market. Fast Eddie, a registered agent with his broker-dealer, discovers that SafeAway’s stock is registered only in the states of Colorado and Wyoming. Neither Fast Eddie nor his broker-dealer are registered to do business in either of those states. Under these circumstances,

30. Most individual state securities laws today are based on:

31. The Uniform Securities Act (USA) is

32. Bootstraps, Inc. is a family-owned business that has experienced enormous growth in the last couple of years. The business needs more cash to support this growth and has decided to issue some promissory notes, each with a face value of $5,000, for sale to the general public. The firm plans to hire three individuals to help them sell these notes. These individuals will earn a commission based on the notes they sell.

Given these facts, which of the following is true?

33. Ms. Naiveté gave Mr. Smooth, owner of Smooth Construction, $40,000 in return for a promissory note that promised to pay interest at the rate of 8% a quarter, with a repayment of principal at the end of two years. The money would be used by Mr. Smooth to rehab a few beach condo units that had been severely hurricane-damaged and that Mr. Smooth had been able to purchase for “pennies on the dollar,” or so he said. The first units would be completed within a month, and the rents would be used to make the interest payments. The investment was almost as risk-free as U.S. government bonds, Mr. Smooth claimed. By the end of the second year, Ms. Naiveté had received a lot of fast talk and only one of the promised interest payments.

Have there been any violation of securities laws in this instance?

34. Which of the following statements is false?

35. Joe Romeo is a broker-dealer registered with the state. He has recently hired Betty Buxom as his administrative assistant. As part of her duties, he has given her the responsibility for effecting the purchases and sales of securities for some of his firm’s smaller accounts. Ms. Buxom has never applied for nor been granted registration as a broker-dealer or agent. Based on these facts,

36. It has come to the attention of the Administrator of the state that Samuel Shyster provided false information on his application to become a registered investment adviser with the state. Prior to revoking Samuel’s license, the Administrator will provide Samuel with which of the following?

I. prior notice

II. an opportunity to fill out a new registration statement

III. an opportunity for a hearing

IV. a written statement regarding the facts and the legal consequences

37. Which of the following would meet the requirements for an “exempt security?”

38. The state official who has regulatory authority over the securities industry within the state is known as the

39. Under the Uniform Securities Act (USA), the term “investment adviser” does not apply to

I. an investment advisory firm owned and operated by a sole proprietor.

II. a bank or savings institution.

III. an investment adviser representative.

IV. a broker-dealer or its agents if the advice is incidental to the business although there is a nominal charge for any specific investment advice given.

40. An investment adviser suggests that his client, Arnold, a 74-year old gentleman, should consider a reallocation of the assets in his portfolio. The adviser tells Arnold that he has far too much invested in bonds, which don’t earn as much as stocks. He advises Arnold to take 80% of the money he has in bonds and invest it in an aggressive growth mutual fund that has provided an average annual return of 40% over the past three years. Arnold is impressed and follows this advice. Shortly thereafter, there is a steep drop in the market in general, and the net asset value of the aggressive growth mutual fund falls 85%.

Does Arnold have any remedies available to him?