semplr.

Exams · Certifications · Licensing

NASAA Series 65 Uniform Investment Adviser Law Exam

4. Laws, Regulations and Guidelines, incl. Prohibition on Unethical Business Practices: practice questions

Our Series 65 bank has 137 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

Start the free mock exam

Question 1

Under an adviser's code of ethics required by SEC Rule 204A-1, an access person must get pre-approval before buying:

  1. Shares in an IPO or a private placement
  2. A home
  3. Shares of an unaffiliated money market fund
  4. U.S. Treasury bills
Show the answer

A. Shares in an IPO or a private placement — Pre-clearance is required for IPOs and limited offerings because they create opportunities to put personal interests ahead of clients'.

Question 2

Whose accounts are covered by the NASAA Model Act on financial exploitation of vulnerable adults?

  1. Anyone 65 or older, or a person covered by the state's adult protective services law
  2. Only persons over 80
  3. Only persons declared incompetent by a court
  4. Any client of any age with an account worth more than $1 million
Show the answer

A. Anyone 65 or older, or a person covered by the state's adult protective services law — The Model Act's definition covers anyone 65 or older and others covered by the state's APS law.

Question 3

A client asks her adviser for a short-term personal loan. Under NASAA's model rule, the adviser may make the loan only if:

  1. The loan is under $1,000 and is repaid within one year
  2. The client signs a promissory note
  3. The adviser is a lending institution, or the client is an affiliate
  4. The client is an accredited investor
Show the answer

C. The adviser is a lending institution, or the client is an affiliate — Rule 102(a)(4)-1(g).

Question 4

The Administrator may not deny an adviser's registration solely because the applicant:

  1. Filed an application containing a materially false statement
  2. Willfully violated the Act
  3. Is insolvent
  4. Lacks experience, if the applicant is qualified by training or knowledge
Show the answer

D. Lacks experience, if the applicant is qualified by training or knowledge — Section 204(b) bars denial on the basis of lack of experience alone if the applicant is qualified by training or knowledge or both.

Question 5

The 'three-part test' the SEC uses to decide whether someone is an investment adviser asks whether the person:

  1. Gives advice about securities, is in the business of doing so, and is compensated
  2. Holds a securities license, has clients in two states, and charges more than $1,000
  3. Is a member of FINRA, files Form ADV, and has custody
  4. Manages more than $100 million, has an office, and employs staff
Show the answer

A. Gives advice about securities, is in the business of doing so, and is compensated — Advice about securities + in the business + compensation (any economic benefit) makes a person an investment adviser unless an exclusion applies.

More Series 65 topics