Series 63 practice questioneasyThree-Prong Test
To be considered an investment adviser under the USA, a person must meet which of the following criteria?
- ABe an individual only
- BAdvise others about securities for compensation as part of a business✓ Correct answer
- COnly provide advice on commodities
- DAct only as a publisher of general financial information
Explanation
Why B — Advise others about securities for compensation as part of a business
The three-prong test (Section 401(c)) requires advising others about securities, being in the business, and receiving compensation. Advising on commodities and general publishing are excluded.
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