QUESTION: 89

Which of the following persons is not subject to the fingerprinting requirements of the Securities Exchange Act of 1934?

I). a registered transfer agent of a securities exchange
II). a firm that engages only in the sale of mutual fund shares
III). a receptionist at a brokerage firm who answers phones and directs calls to the agents employed by the firm
IV). a market maker in the over-the-counter market

I and III only
II and III only
II, III, and IV only
III only

Answer(s): B

Explanation:

Only Selections II and III are not subject to the fingerprinting requirements of the Securities Exchange Act of 1934. Firms that engage only in the sale of open-end investment company (mutual fund) shares, as described in Selection II, are exempt; and employees who do not engage in the sale of securities or activities involving any aspect of the securities or monies of a non -exempt firm are exempt, which is the case for the receptionist at the brokerage firm described in Selection III.

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QUESTION: 90

Dr. Floss has just earned his dental degree and wants to establish a private dental practice. He has had a bit of sticker shock at the price of all the equipment this will require him to purchase. Because he still has a large student loan to repay, he has been unable to borrow any money from his financial institution. To raise capital, he decides to sell fifty ownership interests of $1,000 each to interested investors and takes out a full page ad in a local newspaper to advertise this investment. In this scenario:

Dr. Floss has not violated any laws since the notes have a face value of only $1,000 and he is selling them to a maximum of 50 different investors.
Dr. Floss can be charged with criminal fraud under the provisions of the Securities Exchange Act of 1934.
Dr. Floss has violated the provisions of the Securities Act of 1933 and may face civil penalties.
Dr. Floss has not violated any laws since these ownership interests do not fall under the definition of a security.

Answer(s): C

Explanation:

If Dr. Floss offers fifty ownership interests of $1,000 each for sale to interested investors, he has violated the provisions of the Securities Act of 1933, which requires that new securities be registered unless they are exempt from registration, and may face civil penalties. There is no evidence that he has made any misrepresentations or otherwise attempted to defraud investors, so he is not subject to criminal fraud charges. The ownership interests do fall under the definition of a security.

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QUESTION: 91

Which of the following correctly describe differences between a profit-sharing plan and a money purchase plan?

I). An employer can elect to make no contribution to a profit-sharing plan in a bad year, but the employer must make contributions to a money purchase plan, regardless.
II). Only employers make contributions to profit-sharing plans whereas both employers and employees can contribute to a money purchase plan.
III). A profit-sharing plan is a defined benefit plan whereas a money purchase plan is a defined contribution plan.

I only
I and II only
I and III only
I, II, and III

Answer(s): B

Explanation:

Selections I and II correctly describe differences between a profit -sharing plan and a money purchase plan. Under a profit-sharing plan, an employer can elect to make no contribution in a bad year, but an employer must make contributions to a money purchase plan, regardless. Only employers make contributions to profit-sharing plans, but both employers and employees can contribute to a money purchase plan. Both profit-sharing plans and money purchase plans are defined contribution plans, so the statement made in Selection III is false.

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QUESTION: 92

A general decrease in price levels in the economy is referred to as:

disinflation.
stagflation.
recession.
deflation.

Answer(s): D

Explanation:

A general decrease in price levels in the economy is referred to as deflation. Disinflation refers to a decrease in the rate of inflation, but price levels in general are still rising. Stagflation refers to an economic condition characterized by high levels of inflation and high unemployment levels. A recession is a prolonged decline in the general economy, typically measured by a decline in the nation's gross domestic product (GDP).

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Free Series 6 Exam Braindumps (page: 23)

QUESTION: 89

Explanation:

QUESTION: 90

Explanation:

QUESTION: 91

Explanation:

QUESTION: 92

Explanation: