Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Which of the following would meet the requirements for an “exempt security?”
  1. a $500,000 promissory note that matures in two years
  2. commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors
  3. a $25,000 promissory note that matures in three months
  4. commercial paper with a $200,000 face value and a maturity of three months that is rated BB by Standard and Poors
Explanation
Answer: B - An issue of commercial paper with a $100,000 denomination and a maturity of five months with an AA rating from Standard and Poors meets the requirements for an “exempt security.” A short-term security, with no more than 270 days to maturity, that has a denomination of at least $50,000, and has a rating of AAA, AA, or A from a recognized rating agency is exempt from registration with the state Administrator.
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