Series 65 Practice
Series 65 Practice Quiz
Test your knowledge and prepare for your Series 65 exam with this comprehensive practice quiz designed for aspiring investment advisers. Each question covers essential regulations and best practices, helping you understand key concepts in the investment advisory industry.
- Multiple choice format
- Focus on investment adviser regulations
- Performance tracking for improvement
All of the following represent prohibited activities of investment advisers except
Exercising any discretionary power in placing an order to purchase or sell securities for a client after receiving verbal authorization
Revealing client affairs, transactions, account balances, etc. In the absence of a court order
Trading opposite of recommendations given to clients without disclosure
Placing all client transactions through a broker-dealer that compensates the adviser with commissions without disclosing this arrangement to clients
Investment advisers are expressly prohibited from engaging in all the following activities except
Recommending tax-exempt revenue bonds to high-net-worth clients
Recommending agency cross transactions to both sides of the transaction
Inducing clients to engage in transactions that are excessive in size given the client’s financial resources and risk tolerance
Inducing clients to trade frequently
Maria Hernandez is a sole practitioner set up as an investment adviser. Maria studies financial statements, focusing primarily on target companies’ cash flow, earnings acceleration, and revenue generation metrics. Which of the following is the most accurate way for Maria to describe her approach to rendering investment advice?
I use fundamental analysis to determine which companies represent strong investment opportunities
I am certified by the state securities Administrator to perform fundamental analysis in rendering advice/recommendations
I use the technicals of a company from a fundamenta list approach
I use the technicals of a company from a technical analysis approach
Which of the following is a true statement concerning reports and recommendations in the investment advisory business?
An adviser may not present a client with an investment recommendation prepared by someone else without disclosing the source to the client
An adviser may not use published reports and/or statistical analyses provided by other sources when rendering investment advice without disclosing the source to clients
An adviser may not use published reports and/or statistical analyses provided by other sources when rendering investment advice
An adviser may provide clients with reports prepared by outside sources without disclosure for discretionary clients
John Jacobs is an investment adviser who happens to hold 1,000,000 warrants on XYZ common stock. Whenever large numbers of purchase orders on XYZ hit the market, John notices that the stock tends to rise sharply. Therefore, John
Must refrain from recommending XYZ
Must refrain from recommending XYZ to non-institutional clients
Must provide disclosure to clients potential conflict of interest
May recommend XYZ freely, provided he rebates a reasonable percentage of the commissions to his clients
In order to improve sales and customer satisfaction, QRZ Advisers have implemented a policy whereby clients are rebated 85% of their advisory fees whenever their accounts lose to the S & P 500 by more than 2 percentage points. What is true of this arrangement?
It is fraudulent
It is prohibited
It is allowable for clients with more than $25,000 under management
It is permissible with prior approval from a principal
All of the following statements are true of investment advisory contracts except
They must be in writing
They must state that no assignment contract can occur without client consent
They must explain the basis for compensation
They must disclose the results of the most recent inspection performed by the state
Noting that advisory clients are increasingly demanding results, XYZ Advisers has drafted an agreement that allows clients to compensate the firm as a basis of capital appreciation above the rate of quarterly S&P 500 index appreciation. This type of waiver
Is fraudulent
Is prohibited
Is permissible for clients with $10,000 or more under management
Is a prohibited practice known as “selling away”
Which of the following persons must register as an investment adviser representative?
A lawyer who sells reports on small cap stocks to pension funds
A firm that receives compensation for advising clients as to the value of their securities portfolios and makes recommendations for a fee
A person who sells the services of an investment advisory firm
A person who works as a receptionist and performs general office work for an investment adviser
In order to qualify for special tax treatment, a mutual fund must distribute
At Least 90% of capital gains to its investors
At Least 90% of investment income to its BOD
At Least 90% of investment income to its shareholders
At least 95% of net investment income to shareholders
A letter of intent
May be backdated 90 days to cover a previous purchase
Is a non-binding agreement
Covers a period of 13 months
All of the above
In order to reach a breakpoint new money is counted the same was as account value appreciation under
Exchange privilege
Rights of accumulation
Breakpoint act of 1915
Combination privilege
For a mutual fund with a POP of 10,000 the maximum sales load is
85 cents
$1
50 cents
25 cents
Mutual funds redeem their shares
Immediately on demand
Next business day
Within 7 calendar days
Whenever convenient to investment advisor
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