Series 63 practice questionmediumStock Options
Which of the following best describes a stock option under the Uniform Securities Act?
- AA security, because it represents an investment and expectation of profit✓ Correct answer
- BNot a security, unless issued by a public company
- CNot a security, because it does not pay interest or dividends
- DA security only if actively traded on an exchange
Explanation
Why A — A security, because it represents an investment and expectation of profit
Stock options are listed as securities under the USA Section 401(l), regardless of issuer or exchange status. The payment of income is not a requirement for securities status.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,051+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Regulation of Securities & Issuers questions
- A client purchases an endowment policy from a life insurance company. Under the USA, this policy is:
- Which insurance product is generally excluded from the Uniform Securities Act definition of a security?
- Which of the following is an example of an investment contract under the Howey Test and therefore a security under the…
- Which of the following situations would NOT meet the Howey Test for an investment contract under the USA?
- Which of the following is NOT a security under Section 401(l) of the USA?
- A bank issues a 6-month promissory note to raise short-term funds. Under Section 401(l) of the USA, is this note a…
- Registration by notification (filing) is available to issuers that:
- Under USA Section 401(l), which of the following is NOT a security?