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Master FINRA Series-63: Your Gateway to Securities Success
Question 1
Bob Gogetter is an agent with CanDo Broker-Dealers. One of Bob's clients is out of the country and cannot be contacted. The client holds some stock in a company that just released some information that should make its stock price soar. Bob knows that this client would probably want to increase his holdings, so Bob opens a margin account for his client and borrows the money to buy shares. As it happened, the stock price did soar, and Bob's client earned a sizeable profit.
Is Bob in violation of any securities acts?
Correct : C
Yes. When he opened a margin account for a client without the client's written authorization, Bob committed a securities violation. This is strictly prohibited regardless of whether the client profited or not.
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Question 2
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?
Correct : B
As long as the adviser forwards the check to the mutual fund within 24 hours, he will not be deemed to have taken custody of Ms. Fused funds. This assumes the mutual fund is in no way affiliated with the investment adviser.
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Question 3
Ms. Ding is an administrative assistant to the manager of a mutual fund. Most of her day is spent entering data onto a spreadsheet for her boss and answering phone calls. Some of the calls require her to provide information about the some of the fund's financial aspects, such as its closing net asset value on the previous day.
What type of registration does Ms. Ding require in order to perform her duties?
Correct : D
Since Ms. Ding is an administrative assistant who is merely providing some information about the fund and is not engaging in the purchase or sale of the fund shares, she does not need to apply for any type of registration. An employee who simply provides price and/or some other pertinent information to the public, but who does not engage in the purchase or sale of securities to the public and does not receive a commission based on the sale of securities is not considered to be an agent or an investment adviser.
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Question 4
The state official who has regulatory authority over the securities industry within the state is known as the
Correct : B
The state official who has regulatory authority over the securities industry within the state is the administrator.
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Question 5
The state of Massachusetts has issued a general obligation (G.O.) bond that pays 3% interest. As an agent selling this bond, you can legitimately tell the investor that
Correct : B
An agent selling a Massachusetts general obligation bond can legitimately tell the investor that the interest income he receives from the bond will be free from federal taxation. It is not, however, a risk-free investment. States may default on their bond issues, and bonds issued by states are not guaranteed by the federal government.
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- Exam Name: Uniform Securities State Law Examination
- Exam Code: Series-63
- Last Update: 07-Mar-2026
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