Series 63 Practice Exam


The Uniform Securities Agent State Law Examination is known more commonly as the Series 63 Exam. This test covers state securities regulations under the Uniform Securities Act, and you must pass it in order to qualify as a securities agent. The exams developed by NASAA and administered by FINRA. Here is our free Series 63 practice exam to help you determine if you are prepared.

Series 63 Exam Questions

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Question 1
Mr. Smith has pressured his client into making frequent trades in order to generate more commissions.  What is the name of this prohibited practice?
A
Skimming.
B
Finagling.
C
Churning.
D
Commingling.
Question 1 Explanation: 
Regulators will look at the account's turnover rate for evidence of churning. Frequent trading is not a suitable strategy for most investors.
Question 2
Which of the following is NOT a security?
A
Investment Contract.
B
Fixed Annuity.
C
Bond.
D
Treasury Stock.
Question 2 Explanation: 
The definition of a security is determined by the Uniform Securties Act. Fixed Annuities are considered to be insurance products, not securities.
Question 3
Which of the following are true statements regarding registration for persons in the securities industry?  I. Registrations expire on December 31st each year, unless they are renewed.  II. Registration fees are never pro-rated.  III. There is no fee for renewing your license unless the license has been expired for over 21 days.  IV. Licenses expire on the anniversary date of the initial registration.
A
I, II
B
II, IV
C
I
D
IV
Question 3 Explanation: 
All registrations expire on December 31st and initial registration fees are never pro-rated. All that is necessary for renewal is to pay the required fee.
Question 4
When a principal or agent leaves a firm, which form is the broker-dealer required to file with FINRA?
A
U3
B
U4
C
U5
D
U6
Question 4 Explanation: 
Agents are registered with Form U4 and are terminated with Form U5.
Question 5
A security offering has been registered and the underwriter has entered the cooling off period.  Which of the following is permitted during this cooling off period?
A
A tombstone advertisement.
B
Advertising of the security in trade publications.
C
Sales of the security to accredited investors.
D
None of these are permitted.
Question 5 Explanation: 
No sales or advertising are allowed during the cooling off period. A tombstone advertisement is permitted because it is simply a statement of basic facts about the offer.
Question 6
The Uniform Securities Act gives the Administrator authority to take which of the following actions? I. Issue Rules.  II. Issue judicial injunctions.  III. Issue subpoenas for documents.  IV. Administer oaths.
A
I, III
B
II, IV
C
I, III, IV
D
I, II, III, IV
Question 6 Explanation: 
Only a court can issue a judicial injunction. However, the Administrator can petition the court for an injunction.
Question 7
An Investment Advisor may NOT run advertising that:
A
Provides client testimonials.
B
Lists all stock picks made in the last 2 years.
C
Shows investment returns over a 12-month period.
D
States that past performance does not guarantee future results.
Question 7 Explanation: 
Client testimonials are never permitted in ads. Stock picks can be listed, as long as all picks are shown over the same time period. Investment returns must be over a period of at least one year.
Question 8
Who of the following would be considered to be a "person" under the Uniform Securities Act?
A
A 3-year old.
B
An 18-year old college student.
C
Someone deceased for less than 1 month.
D
Someone mentally incompetent.
Question 8 Explanation: 
"Persons" do not include anyone under age 18, anyone who is deceased, or anyone who is mentally incompetent.
Question 9
Selling Away is a prohibited practice that consists of:
A
Recommending securities which are not suitable for the client.
B
Making unauthorized transactions in a client's account.
C
Selling securities which are not approved for sale by the firm.
D
Accepting orders from an unauthorized third party.
Question 9 Explanation: 
Brokers may only sell securities that are on their firm’s approved product list. This list specifies the types of securities and investments that the brokerage has decided to offer, and that have gone through the firm's due diligence process.
Question 10
Which of the following security types is NOT exempt from registration requirements?
A
Government securities.
B
Insurance company securities.
C
Commercial paper.
D
All of the above are exempt.
Question 10 Explanation: 
Exempt securities include all of the above as well as financial institution securities, public utility securities, stock exchange listed securities, not-for-profit securities, options, and warrants.
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About the Series 63 Exam:
There are 60 questions and candidates have 1 hour and 15 minutes to complete the exam. A score of 72% is required to pass. The exam is challenging, so make sure you work through our Series 63 sample questions along with plenty of additional Series 63 practice questions.