Series 65 – Uniform Investment Adviser Law Exam Laws, Regulations, and Ethics 2

Question 1

What is 'front-running' as it applies to investment advisers?

Accepted Answer

Trading securities for the adviser's own account ahead of executing client orders to take advantage of anticipated price movements

Answer

Placing client orders before all paperwork is complete

Answer

Recommending securities before conducting due diligence

Answer

Soliciting clients before completing registration

Question 2

Under the Uniform Securities Act, which of the following is considered a 'security'?

Accepted Answer

A common stock

Answer

A fixed annuity

Answer

A collectible art piece

Answer

A commodity futures contract

Question 3

What is the 'anti-fraud' provision that applies to all investment advisers under the Investment Advisers Act?

Accepted Answer

Section 206

Answer

Section 12(a)

Answer

Rule 10b-5

Answer

Section 17(a)

Question 4

What is the statute of limitations for civil liability under the Uniform Securities Act for an investor who was sold a security using fraudulent means?

Accepted Answer

1 year from discovery, 3 years from the transaction

Answer

2 years from discovery, 3 years from the transaction

Answer

5 years from discovery or the transaction, whichever is sooner

Answer

No time limit for fraud claims

Question 5

Which of the following is an example of an unethical practice by an investment adviser?

Accepted Answer

Sharing in client profits and losses without written consent

Answer

Disclosing all material conflicts of interest to clients

Answer

Recommending suitable investments aligned with client goals

Answer

Charging a performance-based fee to a qualified client

Question 6

What is the 'de minimis' exemption under the Uniform Securities Act for investment adviser registration?

Accepted Answer

Advisers with no place of business in a state and fewer than 6 clients residing there are exempt from state registration

Answer

Advisers with fewer than 5 clients in a state are exempt from state registration

Answer

Advisers who charge no fees are exempt from registration

Answer

Advisers whose clients are all accredited investors are exempt