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Series 65 Practice Exam 3

Series 65 Practice Exams

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Series 65 Practice Exam 3

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Question 1 of 10

1. Question

A business enterprise featuring limited liability as well as pass-through tax consequences would include:

a general partnership
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an LLC
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a C corp.
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a sole proprietorship
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Question 2 of 10

2. Question

AML (Anti-money laundering) regulations when violated can lead to which of the following sanctions against a firm and/or any registered personnel who played any role in enabling the violative behavior?

criminal penalties including substantial prison sentences
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substantial six-figure and larger fines
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civil penalties
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all of the above
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Question 3 of 10

3. Question

In order to be held liable in an AML legal prosecution, an RR:

must have played an active role in aiding and abetting the money laundering.
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must have benefited from the money laundering.
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may only need to be shown to have turned a blind eye to the activity.
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must have initiated the activity.
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Question 4 of 10

4. Question

In order to be compliant with the rules regarding proper customer identification at the time a customer wishes to open a new account, which of the following statements are untrue:

broker/dealer records used to verify a customer’s identification must be retained no less than 5 years after the closing of the account.
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the name and address of the customer must be obtained.
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the customer’s taxpayer ID # or social security number must be obtained.
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none of the above
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Question 5 of 10

5. Question

In accordance with the Investment Adviser Act of 1940 and amendments thereto, which of the following activities would constitute a violation of the SEC policy regarding use of testimonials by an IA or an IAR?

a principal of the IA submits testimonial commentary about the IA or an IAR on an independent social media website.
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an IA or IAR compensating an individual to post commentary on an independent social media site.
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an IA drawing attention on its own website solely to favorable commentary about the IA at an independent social media site.
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all of the above
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Question 6 of 10

6. Question

When addressing the issue of cybersecurity, IAs and BDs must have procedures in place to maximize the safeguarding of sensitive private client information. Among those procedures would be included each of the below except:

employee training
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maintenance of the minimum required insurance coverage mandated by the regulatory bodies to cover cybersecurity breaches
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the use of appropriate anti-virus and anti-malware programs
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none of these are exceptions
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Question 7 of 10

7. Question

The term ‘dark pools’ is used in the securities markets to identify which of the following?

foreign investment interest in NYSE and NASDAQ stocks.
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after-hours and pre-market order activity.
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an alternative trading system used by institutional-sized traders seeking to move large blocks of stock not on the traditional exchanges.
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global events that are so significant they can dramatically move the stock market in either direction.
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Question 8 of 10

8. Question

HFT (high frequency trading) is best described as:

the investment behavior of those who engage in day trading.
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the investment behavior of those who do at least 5 trades per week on average.
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the use of powerful computers programmed with algorithms designed to automatically enter and exit stock positions within extremely short time frames.
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a type of trading which utilizes satellite technology to transmit orders to the exchanges from anywhere in the world.
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Question 9 of 10

9. Question

Measures of central tendency exclude:

median
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mode
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mean
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advance/decline ratio
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Question 10 of 10

10. Question

Inverse ETFs would be an appropriate recommendation to a client seeking:

to track the movement of the broad market or a particular underlying index.
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to invest in a portfolio designed to profit as the broad market or a specific index declines in value.
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to acquire an interest in a portfolio that purchases bonds at discounts which have been caused by the inverse relationship of rising interest rates and declining bond pricing.
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to trade mutual funds on margin.
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