FINRA Uniform Securities Agent State Law Examination Sample Questions:

1. Which of the following entities must sign a "consent to service of process," thereby allowing the
Administrator to receive legal documents that are meant to be served to the entity in place of that entity?
I. agents
II. investment advisers
III. investment adviser representatives
IV. broker-dealers

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

2. Newbie Corporation is considering the possibility of an interstate initial public offering (IPO) of its stock. In
the initial meetings with BigFee Investment Bankers, Newbie has learned that the underwriting spread will
be 15%. Although the actual offering price won't be set until Newbie's registration statement is approved
by the SEC, BigFee has indicated that the offer price will probably be between $3 and $4 a share and that
the stock will initially be listed on the OTC Bulletin Board. What methods for state registration does
Newbie have available?
I. registration by coordination
II. registration by notification
III. registration by qualification

A) Newbie may elect to register by any one of the above methods although registration by qualification
would be the most burdensome choice.
B) Method II only
C) Methods I and III only
D) Method I only

3. Which of the following is not in itself a reason for the Administrator to deny, suspend, or revoke the license
of a person?

A) The person has been convicted of check kiting within the past ten years.
B) Some of the information supplied on the registration application was found to be false.
C) The applicant has never before worked in the securities industry although he has received the requisite
training.
D) The person is a broker-dealer whose agents have repeatedly been accused of churning and burning,
according to written client complaints.

4. Under the Uniform Securities Act, which of the following does not need to be included when filing to
register a security issue with the state?

A) All of the above documents must be included when filing to register a security with the state.
B) copies of the underwriter agreements
C) a copy of any indenture applying to the security being registered
D) a copy of the firm's articles of incorporation and bylaws, or the equivalent

5. Nat Smart was employed as an investment adviser representative and sold many of his clients on a
municipal bond fund of which he was fond, telling his clients that the returns earned on it were completely
free from federal taxation. Unfortunately, he had some unhappy clients when, at the end of the year, they
discovered that they had to pay federal tax on the capital gains earned by the fund when it sold some of
the bonds it held. Nat was as surprised as they were. Based on these facts, which of the following
statements is necessarily true?
I. Because Nat was as surprised as they were, he is guiltless.
II. Nat is subject to civil liability payments.
III. Nat will be subject to the criminal penalties for fraud and may spend time in prison.

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

Solutions: