Securities & Investment Products Flashcards
6 cards from real Series 66 – Uniform Combined State Law Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Securities & Investment Products flashcards as text
Which of the following best describes a 'mutual fund' in the context of the Uniform Securities Act and federal securities law?
Answer: An open-end management investment company that continuously issues and redeems shares at NAV
A mutual fund is an open-end management investment company that continuously offers new shares and redeems shares at net asset value.
Under the Uniform Securities Act, which of the following is TRUE about options contracts?
Answer: Options on securities are considered securities and are subject to the USA
Options on securities are considered securities under the Uniform Securities Act and are subject to its provisions.
A client purchases shares in a real estate limited partnership. Under the Howey Test, this investment would most likely be considered a security because:
Answer: Investors rely on the efforts of the general partner to generate profits
A limited partnership interests meets the Howey Test because investors contribute money to a common enterprise and rely on the general partner's efforts for returns.
Under the Uniform Securities Act, which of the following statements about promissory notes is CORRECT?
Answer: Promissory notes with a maturity of 9 months or less are generally exempt from registration
Short-term commercial paper (promissory notes with a maturity of 9 months or less) is generally exempt from registration.
Which of the following best describes a 'stop order' that a state Administrator may issue regarding a security's registration?
Answer: An order suspending or revoking the effectiveness of a registration statement
A stop order suspends or revokes the effectiveness of a registration statement, preventing further sales of the security.
Under the Uniform Securities Act, what is the maximum statute of limitations for bringing a civil action for sale of an unregistered security?
Answer: 2 years from discovery, 3 years from sale
Under the USA, civil actions must be brought within 2 years of discovery or 3 years of the transaction, whichever comes first.
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