FINRA Uniform Securities Agent State Law Examination Sample Questions:

1. A "notice filing" refers to

A) the right of an issuer to run tombstone ads in the newspapers and other publications upon filing a
registration application with the state Administrator.
B) notification to the public by the issuer or its underwriters that the issue is being sold on an "all or
nothing" basis.
C) the filing by a federal covered investment adviser of forms already filed with the SEC along with a
consent to service of process with the state Administrator.
D) a document that the issuer must file with the SEC informing the SEC that the firm has applied to the
state for registration of its new security.

2. You are a registered agent with a large brokerage firm. Your client is a very busy woman. She is
interested in purchasing 500 shares of Google, but she thinks this morning's opening price is too high.
She's going to be in meetings and then on a transatlantic flight. She wants the purchase to take place
today because she believes Google's price is just going to keep rising with only the occasional daily ups
and downs. She wants you to use your discretion and try to get her the best price for the stock in today's
trading session. Which of the following statements are true?

A) You tell her that you can do this for her, but only if you execute it as a margin transaction.
B) You tell her to have her secretary type up a discretionary authorization for her to sign and drop in the
mail before she boards the plane. As long as the written authorization is in the mail, you can place the
order.
C) You tell her you can enter it for her as a "market not held" order.
D) You have to tell her that you can't do this without a signed discretionary authorization from her, and
there's none on file.

3. A hypothecation agreement refers to

A) a document signed by a client indicating that he or she understands that some of the charts and
examples presented in a broker-dealer's advertising literature are based on hypothetical trades.
B) an agreement wherein a client gives his broker-dealer discretion to purchase securities that the
broker-dealer deems appropriate in whatever quantity the broker-dealer feels appropriate and at a time
and price the broker-dealer believes is a good deal.
C) an agreement that a client must sign prior to executing any short sales with the broker-dealer.
D) an agreement signed by a client who is executing a margin transaction that allows the broker to hold
the margined securities in street name as collateral for the loan.

4. In which of the following scenarios would the Administrator of a state not have jurisdiction?
I. A monthly newspaper published by a resident of the state who is not a registered investment adviser
has a column in which the publisher makes specific investment recommendations for clients who write in
for advice. About 80% of the circulation of the publication is to out-of-state residents.
II. An internet blog posted by an out-of-state resident makes investment recommendations.
III. An out-of-state firm solicits buyers for its promissory notes within the state.

A) I only
B) I, II, and III
C) II only
D) I and II only

5. Ms. Connie Fused sent her investment adviser a check, payable to a mutual fund that he had
recommended to her. What must the adviser do in order to avoid being considered the custodian of this
account and, thereby, subject to some strict requirements, including a higher minimum net capital?

A) He needs to forward the check to the mutual fund within 3 days.
B) He needs to get a written statement from Ms. Fused, addressed to the state Administrator,indicating it
was her mistake.
C) He needs both to forward the check within 24 hours and to obtain a written statement from Ms. Fused.
D) He needs to forward the check to the mutual fund within 24 hours.

Solutions: