Try FINRA : Series63 valid & accurate questions and answers

A broker-dealer of commodity futures contracts has been profiting by trading for its own account either before or after executing a client's trade on the same commodity, depending on which will be most advantageous.
Under the Uniform Securities Act, the broker-dealer is guilty of

• A. unauthorized transactions.
• B. churning.
• C. nothing. The Uniform Securities Act (USA) deals only with securities, and a commodity futures contract is not a security.
• D. fraud.

Elizabeth is the owner of Lizbeth Investment Advisers, a small, state-registered investment advisory firm. She has decided that her firm needs a niche and has learned that a consulting group is coming to the area and offering a 3-day seminar on asset allocation for senior citizens offered by Advantage for Retirement Persons (ARP). The seminar will cost $1,000 per individual, but after attending the seminar, each attendee will receive a certificate verifying their involvement in the program. Elizabeth decides this is the niche she has been looking for and signs up herself and her three investment adviser representatives for the program. After attending the seminar and receiving their certificates, Elizabeth and her team can

• A. have the words "Senior-Citizen Investment Specialists" printed on their business cards.
• B. indicate that they are certified by the ARP program since money was paid for their attendance.
• C. represent themselves as certified senior citizen investment advisers.
• D. do none of the above.

Price pegging refers to

• A. the unethical practice of investment advisers who issue "buy" recommendations for stocks that they own themselves without disclosing the fact.
• B. the practice of buying large amounts of a security to drive its price up artificially.
• C. the prohibited practice of excessively trading on a client's account that is used by some broker-dealers and/or their agents to generate more commissions for themselves.
• D. the illegal activity of a group of investors who buy and sell a security among themselves to create an artificially high volume of trading in hopes of luring investors to buy the security.

A client calls CanDo Broker-Dealers with a market-not-held order to buy 5,000 shares of China Security and Surveillance Technology, Inc. (CSR), which sells on the NYSE, "at a good price today." The stock had opened at $5.13, traded as high as $5.36 during the day, and closed at $5.10. CanDo executed the purchase at a price of $5.31, so at market close, the client had lost $1,050. The client can

• A. refuse to pay CanDo commissions for the purchase.
• B. refuse to pay for the stock on the settlement date.
• C. do nothing about it.
• D. sue CanDo for not getting him the best price of the day-or anything close to it.

A-2-Z Associates is a full service brokerage and is also in the investment advisory industry, charging its clients for investment advice for additional remuneration.
Which of the following statements is true?

• A. A-2-Z can charge the client both an advisory fee for its advice and a commission on any trade the client makes based on the advice. This is all laid out in the advertising brochures full service brokerage firms like A-2-Z provide their prospective clients.
• B. A-2-Z can charge the client only an advisory fee when it is serving as an investment adviser; no commissions may be collected.
• C. A-2-Z can charge the client both an advisory fee for its advice and a commission for the execution of a trade based on that advice, but it must inform the client of its potential conflict of interest in doing so and get the client's written consent.
• D. A-2-Z can charge an individual client an advisory fee for its advice or a commission when it executes a trade that the client makes based on that advice, but not both.