Chapter 4 Practice Questions

1. 1. One major difference between an agent and an investment adviser representative is that:
2. A. An agent cannot give investment advice.
3. B. Investment adviser representatives do not need to be affiliated with an actual firm to provide advice.
4. C. Agents receive compensation for effecting transactions.
5. D. Agents are not subject to post-registration requirements.
6. 2. All of the following individuals would be considered an agent except someone who:
7. A. Sells non-exempt securities to the public on behalf of an issuer for a commission
8. B. Sells exempt securities to the public on behalf of a broker-dealer for a commission
9. C. Takes orders from customers without providing any investment advice
10. D. Is an institutional investor buying and selling for/from their own account
11. 3. Which of the following are generally registration requirements for agents?
12. I. Passing required exams
13. II. Passing a background check
14. III. Working for an investment advisory firm
15. IV. Meeting net capital requirements
16. A. I and II
17. B. II and III
18. C. I, II, and III
19. D. I, II, III, and IV
20. 4. Agents do not likely need to register if:
21. A. They have five or fewer clients in a state
22. B. They are also registered as an investment adviser representative.
23. C. They receive a salary from an issuer for helping the issuer re-purchase their own securities and the issuer provides notice to the administrator of any such offer and the administrator doesn’t object.
24. D. They sell only securities of the federal government or mutual funds that invest only in government bonds.
25. 5. Which of the following best describes the limitations that an individual serving in a clerical or ministerial role at a broker-dealer must meet to be exempt from registration as an agent?
26. A. They do not have contact with customers