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FINRA Series 65 Practice Exam & Test Questions - Free Test


Our free Series 65 Uniform Registered Investment Adviser Law Exam (Series65) Practice Test was created by experienced educators who designed them to align with the official Financial Industry Regulatory Authority content guidelines. They were built to accurately mirror the real exam's structure, coverage of topics, difficulty, and types of questions.

Upon completing your free practice test, it will be instantly reviewed to give you an idea of your score and potential performance on the actual test. Carefully study your feedback to each question to assess whether your responses were correct or incorrect. This is an effective way to highlight your strengths and weaknesses across different content areas, guiding you on where to concentrate your study efforts for improvement on future tests. Our detailed explanations will provide the information you need to enhance your understanding of the exam content and help you build your knowledge base leading you to better test results.

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Series 65 Uniform Registered Investment Adviser Law Exam - Free Test Sample Questions

A certificate that cannot be read for the name of the issue or the issuer, or for the detail necessary for identification and transfer, or for the exercise of the holder's rights is which of the following?

Correct Answer:
mutilated security


the correct answer to this question is a "mutilated security." a mutilated security refers to a financial certificate or document that has sustained physical damage to such an extent that crucial information on it cannot be deciphered. this includes details necessary for identifying the issue, the issuer, and other essential information required for the transfer of ownership or the exercise of the holder's rights associated with the security.

mutilation can occur due to various reasons such as tearing, burning, water damage, or other forms of degradation that render part or all of the certificate unreadable. when a security is mutilated, it poses significant risks related to fraud and misrepresentation. as a result, such securities typically cannot be transferred as their authenticity and validity are questionable.

in order to transfer ownership of a mutilated security, a third party, usually a transfer agent, must intervene. the transfer agent acts as a custodian and is responsible for maintaining accurate records of securities' ownership. before a mutilated security can be transferred, the transfer agent must provide a legal guarantee affirming the legitimacy of the certificate. this guarantee helps in preventing fraudulent activities and ensures that the new owner's rights are protected.

thus, mutilated securities require special handling and verification by trusted financial institutions to maintain the integrity of financial transactions and uphold the confidence in the securities market.