The SMC Capital, Inc. No-Action Letter (September 5, 1995) states that trade allocations may occur:
A. Only on a rotational basis
B. On a pro rata basis but other allocation methods can be used without violating the
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The SMC Capital, Inc. No-Action Letter (September 5, 1995) states that trade allocations may occur:
A. Only on a rotational basis
B. On a pro rata basis but other allocation methods can be used without violating the Advisers Act
C. Only on a pro rata basis
D. Based on the trader's good faith discretion Correct Answer B. On a pro rata basis but other allocation methods can be used without violating the Advisers Act
Which of the following should NOT be a factor when evaluating best execution?
A. Price
B. Transaction costs
C. Availability of affiliated brokerage services
D. Service and execution capability Correct Answer C. Availability of affiliated brokerage services
Under the safe harbor provided by Section 28(e) of the Securities and Exchange Act of 1934, a "mixed use" product/service, purchased with soft dollars, most likely refers to which of the following:
A. A research newsletter used by analysts
B. A computer terminal used only to place client trades
C. Portfolio management software used to calculate client returns
D. A junket to Pebble Beach for golf Correct Answer C. Portfolio management software used to calculate client returns
An adviser's valuation procedures should, practically speaking, be prepared with the LEAST attention to:
A. Large cap stocks
B. Illiquid investments
C. Foreign issues
D. Micro cap stocks Correct Answer A. Large cap stocks
Agency cross transactions do NOT require:
A. Annual disclosure to advisory clients of the number of agency cross transactions
B. Annual disclosure of the total remuneration received by the adviser through agency cross transactions
C. Consent from at least two advisory clients
D. Disclosures that written consent may be revoked at any time Correct Answer C. Consent from at least two advisory clients
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