Chapter 1 Practice Questions

1. 1. All of the following are factors that are considered when determining if someone is an investment adviser except:
2. A. Receiving compensation
3. B. Assets under management
4. C. Providing advice
5. D. Job description
6. 2. Which of the following would most likely be considered an investment adviser?
7. A. A lawyer overseeing the management of a client’s trust
8. B. A college professor who teaches a class on investing
9. C. A personal finance author who focuses on planning for retirement
10. D. A publisher of a subscription-based online newsletter that includes an interactive component where investors can put in information and receive advice specific to their needs
11. 3. Which of the following are exceptions to the definition of an investment adviser subject to state registration?
12. I. An investment adviser representative
13. II. An investment adviser with $150 million in client assets under management
14. III. The publisher of a general interest business magazine
15. IV. A bank or savings institution
16. A. II only
17. B. II and III
18. C. I, II, and III
19. D. I, II, III, and IV
20. 4. All of the following would allow someone with no office in the state, but who otherwise is clearly defined as an investment adviser, to avoid state registration except:
21. A. The de minimis rule
22. B. The adviser’s only clients were institutional clients.
23. C. Their assets under management did not exceed $100 million.
24. D. The adviser had no more than five non-institutional clients.
25. 5. The net capital requirement for an adviser who has discretion, but not custody, over a client account is:
26. A. $0
27. B. $500
28. C. $10,000
29. D. $35,000
30. 6. According to the Uniform Securities Act, an investment adviser may be disciplined because of:
31. I. A felony from fifteen years ago
32. II. A non-material error on their registra