FINRA Series-63 Exam Questions Answers

FINRA Series-63 Study Questions for Exam 2026

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Uniform Securities State Law Examination Exam Series-63 Questions and Answers

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Page: 1 / 51
Total Questions: 251

Questions & Answers PDF

• Question 1

  

  Alter Advisers & Associates is a small investment adviser partnership registered only in a single state. One of the partners has died, and the surviving spouse has sold that partnership interest to the surviving partners.Which of the following statements are true?

  • . Alter Advisers must inform the state Administrator of this event.
  • . Alter Advisers must inform the SEC of this event.
  • . Alter Advisers must notify the firm’s clients of this event.
  • I only
  • I and II only
  • I and III only
  • I, II, and III

  Reveal Answer Answer: C Next Question

• Question 2

  

  Mr. and Mrs. Cleaver are nearing retirement and have made an appointment with Mr. Eddie, an investment adviser representative who works for Haskell Investment Advisers, to get advice on how they can better structure their investments to meet their retirement goals. Their son, Theodore, who has recently graduated college and has a great job as a software writer for a video game company, accompanies them. Mr. Eddie explains that the main goal of any plan is diversification and recommends that Mr. and Mrs. Cleaver spread their investment monies equally among six load mutual funds that Mr. Eddie can sell them. He suggests that Theodore follow suit and invest any monies he has equally among the same ten funds.Has Mr. Eddie done anything wrong?

  • Yes. Mr. Eddie has advised his clients to invest in load funds when no load funds are clearly better investments.
  • No. Diversification should, in fact, be the goal, and he has advised a well-diversified plan for his clients.
  • Yes. Clients who are ready to retire have different investment needs than a client who is just entering the work force. The recommendation that both Theodore and his parents have the same asset allocation is clearly unsuitable.
  • Yes. Mr. Eddie is guilty of misappropriation, a prohibited practice.

  Reveal Answer Answer: C Next Question

• Question 3

  

  Under NASAA Model Rules, it is permissible for the registered representative of a broker-dealer to split his or her commission with

  • . a client.
  • . the broker-dealer with which the registered representative is affiliated.
  • . another registered representative working for the same broker-dealer.
  • . the administrative assistant who directs calls to the registered representative and provides other services for the agent.
  • I, II, III, and IV
  • I, II, and III only
  • II, III, and IV only
  • II and III only

  Reveal Answer Answer: D Next Question

• Question 4

  

  Registration by coordination is provided for by which of the following federal securities acts?

  • Securities Act of 1933
  • Securities and Exchange Act of 1934
  • Investment Advisers Act of 1940
  • Investment Company Act of 1940

  Reveal Answer Answer: A Next Question

• Question 5

  

  Which of the following constitutes a non-punitive order?

  • summary license suspension
  • registration cancellation
  • registration denial
  • All of the above are punitive orders.

  Reveal Answer Answer: B Next Question

• Question 6

  

  An agent working for a broker-dealer mistakenly sends an investment adviser some bonds that theadviser purchased on behalf of his client instead of directing the bonds to the financial institution that is serving as the qualified custodian of the client’s funds.If the investment adviser wants to avoid being considered custodian of this client’s account, what must the adviser do?

  • Record what securities were sent, when he received them, and when he forwarded them--which
  • Record what securities were sent, when he received them, and when he forwarded them--which must be within three business days-to his client.
  • Record what securities were sent, when he received them, and when he forwarded them--which must be within twenty-four hours-to his client.
  • Record what securities were sent, when he received them, and when he forwarded them--which must be within twenty-four hours-to the qualified custodian of the client’s funds.

  Reveal Answer Answer: C Next Question

• Question 7

  

  In which of the following scenarios is an investment adviser representative required to disclose the fact that someone other than the representative performed the research on which his advice to the client is based?

  • . The investment adviser representative recommends the same asset allocation for his client that a buddy of his did after his buddy had done some research for a client with similar characteristics.
  • . The investment adviser representative provides a recommendation for his client based on research provided by a broker-dealer that provides the investment adviser with its analysts’ recommendations in return for trades that the investment adviser executes using the services of the broker-dealer, as well as a couple of other research sources he finds on the internet.
  • . The investment adviser representative submitted his client’s information to a data base that provided a recommendation for the asset allocation of the client’s investment monies that the adviser deemed was sound and, therefore, recommended it to his client.
  • I only
  • II only
  • III only
  • I and III only

  Reveal Answer Answer: D Next Question

• Question 8

  

  Sam Shade had his agent’s license revoked by the state of Washington for repeatedly making misleading claims about various investment to investors. He had it with all the rain anyway and decided to move to the sunshine state of Florid

  • His brother-in-law was a computer whiz who made money on the side (more than his day job provided, in fact) by supplying illegal immigrants with official-looking documentation, including social security numbers. Sam Shade became Ian Creed in a few clicks of the mouse. As Ian Creed, Sam was hired by Sunny Investment Advisers, an investment adviser firm located in the Florida Keys, in a clerical role. As such, Sam/Ian had access to the confidential information of the firm’s clients, which he and his brother-in-law utilized for the purpose of identity theft. Under the Uniform Securities Act guidelines, when Sam and his brother-in-law are caught in their illegal activities,
  • Sunny Investment Advisers will not be held liable if it can prove that there was no way it could have or should have known of the revocation of Sam Shade’s (aka Ian Creed) license.
  • Sunny Investment Advisers will be subject to criminal prosecution for employing an individual whose license had been revoked by the Administrator of another state since it obviously did not use due diligence in hiring Ian Creed, aka Sam Shade.
  • Sunny Investment Advisers will be subject to civil penalties for employing an individual whose license had been revoked by the Administrator of another state.
  • Sunny Investment Advisers will be subject to both criminal prosecution and civil penalties for employing an individual whose license had been revoked by the Administrator of another state since it obviously did not use due diligence in hiring Ian Creed, aka Sam Shade.

  Reveal Answer Answer: A Next Question

• Question 9

  

  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?

  • . Because Nat was as surprised as they were, he is guiltless.
  • . Nat is subject to civil liability payments.
  • . Nat will be subject to the criminal penalties for fraud and may spend time in prison.
  • I only
  • II only
  • II and III only
  • III only

  Reveal Answer Answer: B Next Question

• Question 10

  

  : 65Which of the following would meet the requirements for an “exempt security?”

  • a $500,000 promissory note that matures in two years
  • commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors
  • a $25,000 promissory note that matures in three months
  • commercial paper with a $200,000 face value and a maturity of three months that is rated BB by Standard and Poors

  Reveal Answer Answer: B Next Question

Page: 1 / 51
Total Questions: 251

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