Series 65 Securities, Agents & Administrator Practice Questions
Securities, Agents & Administrator makes up 4 of every 50 questions on a Tigertest Series 65 practice test. Here are 10 of the 16 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on NASAA's Series 65 test specifications. Original questions; 50 per test, weighted like the real 130-question exam. Not affiliated with NASAA or FINRA.
1. A client pledges stock as collateral for a bona fide bank loan. Under the Uniform Securities Act, the pledge is:
- A.An exempt sale
- B.Not a sale
- C.A sale by the client
- D.An offer to the bank
Answer: B. The Act says a bona fide pledge or loan is not a sale or offer, so no registration questions arise. Selling the stock to repay the loan would be a sale.
2. A company gives shareholders a stock dividend for which they pay nothing. Under the Uniform Securities Act, this is:
- A.An exempt offer
- B.A taxable offer
- C.A sale of new stock
- D.Not a sale
Answer: D. A stock dividend with nothing of value given by the shareholder is not a sale or offer. A dividend that required shareholders to pay something would be.
3. A shareholder gives away assessable stock, on which the company may levy more payments. Under the Act, the gift is:
- A.Treated as a sale
- B.A pledge
- C.Never a securities matter
- D.An exempt transaction
Answer: A. The Uniform Securities Act treats a gift of assessable stock as a sale and offer, because the recipient takes on a duty to pay future assessments.
4. A company sells shares to residents of a state under Rule 506 of Regulation D. A state that requires a Form D notice filing generally wants it:
- A.Within 90 days of the first sale
- B.Only after the offering closes
- C.Within 15 days of the first sale there
- D.Before any offer in the state
Answer: C. Rule 506 securities are federal covered, so states cannot require registration, only a notice filing. NASAA states generally ask for the Form D, a fee and consent to service of process no later than 15 days after the first sale in the state.
5. An investor sells older shares of a company to another investor through a broker. This is:
- A.A primary offering
- B.A private placement
- C.A nonissuer transaction
- D.An issuer transaction
Answer: C. In a nonissuer transaction the proceeds do not go to the issuer, as in ordinary secondary trading. An issuer transaction raises money for the company.
6. Many states exempt nonissuer trades in a security whose issuer's information appears in a recognized securities manual. This is called the:
- A.Manual exemption
- B.Coordination exemption
- C.Federal covered exemption
- D.Isolated trade exemption
Answer: A. The manual exemption covers secondary trades in securities of issuers whose basic financial information is published in a recognized securities manual.
7. A company offers new shares only to its existing shareholders, and no commission is paid for soliciting them. Under the Act, this is generally:
- A.A sale needing qualification
- B.A nonissuer sale
- C.An exempt security
- D.An exempt transaction
Answer: D. Offers to existing security holders, including holders of convertible securities, are an exempt transaction when no commission is paid for the solicitation.
8. Under the Uniform Securities Act, which of these is NOT a security?
- A.A profit-sharing agreement interest
- B.A fixed annuity contract
- C.A variable annuity contract
- D.A collateral trust certificate
Answer: B. The Act's definition excludes insurance, endowment and annuity contracts under which an insurer promises a fixed sum. Variable annuities, collateral trust certificates and profit-sharing interests are all securities.
9. For a state-registered adviser with custody of client funds or discretion, the Administrator may require:
- A.A FINRA membership
- B.A minimum net worth or bond
- C.A guaranteed client return
- D.SEC registration instead
Answer: B. The Act lets the Administrator set minimum financial requirements, such as net worth or a surety bond, for advisers, often higher for those with custody or discretion.
10. Before entering a final order suspending an adviser's registration, the Administrator must give:
- A.A jury trial
- B.Nothing, if the facts are clear
- C.Only an SEC referral
- D.Notice, a hearing chance, findings
Answer: D. A final order to deny, suspend or revoke a registration requires appropriate notice, an opportunity for a hearing, and written findings of fact and conclusions of law.
Practice all 16 securities, agents & administrator questions, and the rest of the 200-question bank, in the free Series 65 training sets. Questions you miss come back until you have mastered them.
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