C. agent
D. administrator

Answer(s): C

Explanation:
An individual who represents a broker-dealer in buying and sel ing securities is called an agent or a
registered representative. An agent may also work for an issuer, which refers to the entity that is selling
securities to raise money for itself. An underwriter is the entity that aids the issuer in bringing the new
securities to market. Administrator is the title many states use to refer to the official in charge of enforcing
the state's securities regulations.

QUESTION: 8
Which of the following statements best explains the difference between an agent and a broker-dealer?

A. An agent is an individual who represents a broker-dealer or an issuer and buys and sel s securities he
does not own in return for a commission on the transactions he executes. A broker-dealer may also buy
and sel securities for his own portfolio, in which case the broker-dealer enjoys any price appreciation on
those securities.
B. A broker-dealer must be licensed in the state in which he conducts business, but there are no separate
licensing requirements for agents.
C. Agents are engaged exclusively in the purchase and sale of stocks whereas broker-dealers also buy
and sel bonds and option contracts.
D. Agents conduct their business exclusively in the secondary market, while broker-dealers also operate
in the primary market.

Answer(s): A

Explanation:
The main difference between an agent and a broker-dealer is that an agent represents either a broker-
dealer or an issuer and buys and sel s securities he doesn't own, receiving a commission for the trades
he executes. A broker-dealer, when functioning as a dealer, is buying and selling for his own portfolio,
thereby profiting from any price appreciation in the assets in his portfolio. Both agents and broker-dealers
must meet state licensing requirements; both engage in the purchase and sale of stocks, bonds, and
option contracts; and both operate in both the primary and secondary markets.

QUESTION: 9
Rich Writewell wants to begin publishing an independent weekly financial newsletter that wil provide
investment recommendations as well as other financial news items to the general public. Rich hopes that
his newsletter wil achieve nationwide circulation within a few months. Which of the following statements
is true?

A. Rich will have to register as an investment adviser since his publication wil include investment
recommendations
B. Rich will have to register as an investment adviser only if he sel s this newsletter to the public.If the
publication is to be distributed free of charge, he will not have to register.
C. Rich may be exempt from registering as an investment adviser if he is a lawyer,accountant, engineer,
or teacher. Otherwise, he will have to register.
D. Rich wil not have to register as an investment adviser since he is publishing a legitimate financial
newsletter for distribution to the general public.

Answer(s): D

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