Series 63 practice questioneasyExempt Securities — Government/Municipal Securities
On a final review set, the question is presented in this context. Assume the administrator is testing the cleanest state-law answer. Which of the following securities is EXEMPT from registration under the Uniform Securities Act?
- AShares of a technology startup
- BA bond issued by the City of Chicago✓ Correct answer
- CStock in a foreign private company
- DShares in a limited partnership investing in real estate
Explanation
Why B — A bond issued by the City of Chicago
Under USA Section 401, securities issued by any state, political subdivision, or municipality of the United States are exempt from registration. Municipal bonds such as those issued by the City of Chicago fall squarely within this exemption because they are backed by a governmental entity. The exam trick is the framing, not the underlying Uniform Securities Act rule.
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