A "market not held" order is

A. an order in which the client tells the broker to use his own discretion in timing a purchase or sale in an attempt to get a better price.

B. a prohibited activity in which an agent engages in the purchase or sale of securities that are not offered by his broker-dealer.

C. an order to buy or sell a stock at a specified price, which differs from the current market price.

D. an order to sell securities that the investor owns if the stock decreases by a certain amount from the current price.

An agent cannot tell a client that a mutual fund is "no load" if the fund has

I. a front-end load

II. a contingent deferred sales load

III.

12b-1 fees

A.

I, II or III

B.

I or II only

C.

I only

D.

I or III only

Stu Pede is an agent with broker-dealer Cavalier. A customer calls with a request to establish a classic IRA and asks for Stu's advice regarding where the money in the IRA should be invested. Stu suggests a municipal bond fund, explaining to his client that the interest income earned on it will be tax-free at the federal level, and some of it may even be tax-free at the state and local levels.

Has Stu engaged in any prohibited practices?

A. Yes. Stu is an agent with a broker-dealer. He is not an investment adviser representative and is not allowed to make recommendations regarding investments to the firm's clients.

B. No. Although Stu has given investment advice, it was solicited by the client, and Stu received no additional compensation for the advice.

C. Yes. Municipal bonds are not suitable investments for a classic IRA, and Stu can have his license revoked or suspended.

D. No. Although municipal bonds are not suitable investments for a classic IRA, Stu obviously didn't know this and is merely guilty of stupidity.

Which of the following statements regarding "registration by qualification" is true?

A. Registration by qualification refers to the fact that certain categories of securities are exempt from state registration requirements.

B. Registration by qualification is the preferred method used by issuers since it requires the least amount of paperwork.

C. In its simplest form, registration by qualification requires the issuer to supply voluminous amounts of information about both the firm and its directors, officers, and major shareholders.

D. Registration by qualification refers to the fact that the highest quality bonds, i.e., those with a AAA rating, are exempt from registration with the state.

Which of the following does not describe a prohibited practice for broker-dealers under the NASAA Model Rules?

I. SecureMoney Broker-Dealers has received a request from a client who wants SecureMoney to "identify a few solid firms in the Asian market and invest up to $20,000 in them." SecureMoney executes the purchases and receives the requisite signed discretionary authorization from the client before the settlement date.

II. CanDo Broker-Dealers executes a margin transaction for a client, promptly receiving a signed, written margin agreement from the client after the transaction takes place.

III.

GetErDone Broker-Dealers receives a call from a client who wants to purchase some securities on margin. GetErDone has the client come into the office to sign a properly executed margin agreement prior to effecting the transaction.

A.

None of the selections are prohibited practices.

B.

I and III only

C.

II and III only

D.

III only

Assuming there is not a stop order or a proceeding pending, under the registration by coordination process a security's registration with the state becomes effective:

A. only when it is approved by the state Administrator, regardless of whether it has been approved by the SEC.

B. immediately after approval by the SEC as long as the registration statement has been on file for at least 20 days or the Uniform Securities Act has provided an exemption to this waiting period.

C. immediately subsequent to approval by the SEC, regardless of how long the registration statement has been on file.

D. only when it is approved by the state Administrator, who will review the registration documentation upon notification that SEC approval has been granted.

Jack Bean is employed by Giant Investment Advisers, LLC. His job duties include advising clients on the asset allocations of their portfolios. Jack Bean is

A. an investment adviser representative.

B. an investment adviser.

C. an administrative assistant.

D. an agent.

Which of the following scenarios would not be considered a "sale," as defined by the Uniform Securities Act (USA)?

I. Yoshito owned shares of Minnow Corporation and received shares of Whale Corporation from Whale when it merged with Minnow.

II. Olivia's uncle, an agent with SecureMoney Brokers, sold Olivia ten call options on the stock of Microsoft.

III. Hans purchased a bond of Indebted Corporation that had detachable warrants and subsequently sold the warrants.

IV.

Tom pledged some shares of stock he owned personally to secure a business loan for his company.

A.

Neither I nor II would be considered sales.

B.

Neither II nor III would be considered sales.

C.

Neither I nor IV would be considered sales.

D.

Neither III nor IV would be considered sales.

An investment adviser or its representative may

A. only exercise any discretionary power in the purchase or sale of securities for a client's account after receiving written authority prior to the execution of the transactions.

B. exercise discretionary power in the purchase or sale of securities for a client's account as long as it receives written discretionary authority over the account within 10 business days of the first discretionary transaction placed, assuming oral authority has already been given.

C. exercise discretionary power in the purchase or sale of securities for a client's account as long as.

D. exercise discretionary power in the purchase or sale of securities for a client's account only after.

In accordance with the National Securities Markets Improvement Act of 1996, which of the following is a federal covered adviser and, therefore, exempt from registering with the state Administrator?

I. An adviser who does business in 26 states.

II. An adviser who manages the portfolio of a mutual fund that is registered with the SEC.

III.

An adviser with $35 million in assets under management

A.

All of the selections meet the qualifications of a federal covered adviser.

B.

I and II only

C.

II and III only

D.

I and III only