Chapter 2 Practice Questions

1. 1. All of the following would likely be considered an investment adviser representative except a(n):
2. A. Customer service rep who is paid bonuses based on how clients rate his service
3. B. Stockbroker who receives an agreed-upon dollar fee for giving advice to each client
4. C. Wealth manager who receives a fee equal to a percentage of the assets she manages
5. D. Investment professional whose firm pays him a salary regardless of how many clients he advises
6. 2. Which of the following is the key distinguishing feature between an investment adviser and an IAR?
7. A. The adviser works for the IAR
8. B. The IAR works for the adviser
9. C. The IAR must meet a net capital requirement
10. D. Only the investment adviser, not the IAR, can make recommendations to clients
11. 3. Which of the following would not need to register as an Investment Adviser Representative?
12. I. Someone who performs only clerical duties
13. II. Someone who serves no more than five non-institutional clients per year in a state besides their home state
14. III. An IAR who receives less than $500 in annual fees
15. IV. Someone who is working as an agent for a broker-dealer and only gives incidental advice
16. A. I and III only
17. B. I, II, III, and IV
18. C. I, II, and III
19. D. I, II, and IV
20. 4. An investment adviser representative will typically be required to meet all of the following registration and post-registration requirements except:
21. A. Exam or evidence of qualification
22. B. Have a sponsoring firm
23. C. Background check
24. D. Net capital requirements
25. 5. An investment adviser representative’s registration must typically be renewed by:
26. A. December 31st of each year
27. B. One year from the original registration
28. C. Two years from the original registration
29. D. 30 days after his or her firm renews their