Explanation:
Rich will not have to register as an investment adviser since he is publishing a legitimate financial
newsletter that will be distributed to the general public. The definition of the term "investment adviser"
excludes publishers of bona fide business or financial publications that are published regularly and have
general circulation.

QUESTION: 10
Erin is a registered agent who works for SecureMoney Brokers-dealers. One of her clients, Mrs. McTurk,
is a recently-widowed woman who relies on Erin for advice about her investment portfolio. Mrs. McTurk
reminds Erin of her own grandmother, and she is happy to provide guidance within the sphere of her own
knowledge. Based on these facts, which of the following statements is true?

A. SecureMoney Broker-dealers must register as an investment adviser since one of its employees is
providing investment advice.
B. Erin must register as an investment adviser since she is providing investment advice.
C. SecureMoney Broker-dealers must register as an investment adviser since one of its employees is
providing investment advice, and Erin must register as an investment adviser representative as the firm's
employee.
D. Neither SecureMoney Broker-dealers nor Erin must register as an investment adviser based on the
facts provided.

Answer(s): D

Explanation:
Neither SecureMoney Broker-dealers nor Erin must register as an investment adviser based on the facts
provided since neither the broker-dealer nor Erin is receiving any compensation for the advice Erin is
giving Mrs. McTurk. In this instance, the advice provided is considered incidental to the broker-dealer
business.

QUESTION: 11
Which of the following would not fall under the classification of "institutional investor"?

A. Prudential Insurance
B. Chase Bank
C. Neuring Investment Advisers
D. Franklin Templeton Mutual Funds

Answer(s): C

Explanation:
Nuering Investment Advisers would not fal under the classification of "institutional investor." Institutional
investors are defined as banks, insurance companies, mutual funds, some pension plans, and broker-
dealers registered under the Securities Exchange Act of 1934. Investment advisers are not part of this
group.

QUESTION: 12
Which of the following is an example of a non-issuer transaction?

A. IBM sel s a new issue of bonds to an insurance company.
B. Jose purchases a 10-year bond issued by Progress Energy when it has 6 years remaining to maturity.
C. Google offers more shares of its stock for sale to the public.
D. NewCorp, which has been a privately held company, is engaging in an initial public offering (IPO) of its
stock.

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