SERIES-63 practice question 15 of 35

An investment adviser representative with Capital Investment Advisors, Inc. advised his client to invest $5,000 in bonds of a firm that the adviser…

Choose your answer, then check it against the explanation.

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
Answer options
Question 15 of 35

Keep practicing

Take the free SERIES-63 practice test

Ten exam-style questions with answers and explanations, plus the exam facts and study guides.

Start the free practice test

More questions

Other SERIES-63 practice questions

Scroll to Top