You are a registered agent with a large brokerage firm. Your client is a very busy woman. She is interested in purchasing 500 shares of Google, but she thinks this morning's opening price is too high. She's going to be in meetings and then on a transatlantic flight. She wants the purchase to take place today because she believes Google's price is just going to keep rising with only the occasional daily ups and downs. She wants you to use your discretion and try to get her the best price for the stock in today's trading session.
Which of the following statements are true?

• A. You tell her you can enter it for her as a "market not held" order.
• B. You tell her to have her secretary type up a discretionary authorization for her to sign and drop in the mail before she boards the plane. As long as the written authorization is in the mail, you can place the order.
• C. You tell her that you can do this for her, but only if you execute it as a margin transaction.
• D. You have to tell her that you can't do this without a signed discretionary authorization from her, and there's none on file.

Today's edition of the Wall Street Journal carried a front page story regarding a federal lawsuit that has been filed against a software manufacturer for monopolistic practices. The CFO of the company called his broker today and sold some of the shares he owns in the company.
Which of the following statements are true?
I. The CFO is guilty of illegal insider trading.
II. If the agent who effected the transaction for the CFO knew he was CFO of the software company, the agent is guilty of illegal insider trading.
III. The broker-dealer for whom the agent works may have its license suspended or revoked if its agent has knowingly executed this illegal insider trade for not having supervised the agent properly.

• A. I and II only
• B. None of the statements is true.
• C. I, II, and III
• D. I only

Which of the following statements about agents is (are) false?

• A. All of the above are false statements.
• B. If an agent files for bankruptcy, the Administrator may elect to terminate that agent's registration if the Administrator believes it is "in the public interest" to do so.
• C. An agent must demonstrate a specific minimum level of financial stability for his registration application to be accepted.
• D. When an agent has a change of address, both he and his broker-dealer affiliate must inform the Administrator.

An investment adviser representative with Capital Investment Advisors, Inc. advised his client to invest $5,000 in bonds of a firm that the adviser claimed was an investment "almost as risk-free as investing in U.S.
government bonds; maybe even more so, given the magnitude of the government deficit these days." The client paid a total of $200 for this advice. The bonds paid interest at the rate of 6%, with semiannual payments, and the client received $300 in interest payments before the firm went belly-up at the end of a year, and its bonds were deemed worthless. The client has filed suit, and its attorneys' fees and court costs are expected to be $1,000. When the investment is a bond, the state has recently been assessing an interest rate equal to the interest rate paid by the security as an equitable interest payment guideline in civil penalties.
The maximum the client can expect in civil penalties is

• A. $6,000.
• B. $5,200.
• C. $5,900.
• D. $6,200.