Chapter Three Practice Question Answers
1. Answer: A. A municipal securities firm must pay an initial registration fee of $1,000 and an annual registration fee of $1,000.
2. Answer: D. Failure to pay the annual fee may result in a $25 monthly late fee, as well as an additional fee on the unpaid balance. The annual fee must be paid by October 31. Form A-12 must be affirmed during the period beginning Jan 1 and ending 17 business days later, and must be updated within 30 days of becoming inaccurate.
3. Answer: C. Municipal advisors must maintain copies of their WSPs for five years.
4. Answer: D. The position Brad is running for would not give him the ability to influence the state’s decisions about the hiring of a municipal advisor for municipal advisory business. Thus, the pay to play rule does not apply to this contribution.
5. Answer: A. MAPs are allowed to make contributions to candidates whom they could vote for, up to $250 per election. Contributions to State B candidates who have the authority to direct business to Sam’s firm may result in a ban on municipal advisory business for his firm.
6. Answer: B. In order to avoid a ban on engaging in municipal advisory business with State A, the representative must contribute no more than $250 per election to each official of the state.
7. Answer: B. Advisors prohibited from engaging in municipal advisory business under this rule may qualify for an automatic exemption from the rule if three requirements are met. Automatic exemptions are only available where (1) the advisor discovered the political contribution that prohibited the advisor from engaging in municipal advisory business within four months after the date of the contribution, (2) the contribution did not exceed $250, and (3) the person who made the contribution obtains its return within 60 days of the discovery of the contribution by the advisor. An advisor is entitled to only two automatic exemptions per 12-month period and may only e