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Finra Series-63 Exam - Topic 5 Question 9 Discussion

: 65Which of the following would meet the requirements for an ''exempt security?''
B) commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors
A) a $500,000 promissory note that matures in two years
C) a $25,000 promissory note that matures in three months
D) commercial paper with a $200,000 face value and a maturity of three months that is rated BB by Standard and Poors

Finra Series-63 Exam - Topic 5 Question 9 Discussion

Actual exam question for Finra's Series-63 exam
Question #: 9
Topic #: 5
[All Series-63 Questions]

: 65

Which of the following would meet the requirements for an ''exempt security?''

Show Suggested Answer Hide Answer
Suggested 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.


by Malcom at May 02, 2025, 12:30 PM

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Elza
7 months ago
Surprised that a BB rating might not qualify for exemption.
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Azzie
7 months ago
I think commercial paper is usually exempt if it meets the criteria!
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Cherry
7 months ago
A $500,000 promissory note is not exempt.
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Gail
7 months ago
Not sure about that $25,000 note being exempt either.
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Loreta
7 months ago
Commercial paper with a short maturity can be exempt if rated high enough.
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Ettie
8 months ago
I recall that commercial paper usually needs to be rated at least A-1 or equivalent to be exempt. So, I’m leaning towards option B being the right choice.
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Deeann
8 months ago
I practiced a similar question where the maturity was key. I wonder if the three-month maturity for option D makes it exempt, but the rating might be an issue.
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Naomi
8 months ago
I'm not entirely sure, but I feel like the $500,000 promissory note might not qualify because of its size and maturity period.
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Ashlee
8 months ago
I think I remember that commercial paper can be considered an exempt security if it meets certain criteria, like maturity and rating.
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Stephania
9 months ago
I think I've got a good strategy here. I'll focus on the maturity dates first, since that seems to be a key requirement. Then I'll double-check the credit ratings to see which one best fits the "exempt security" criteria.
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Gregoria
9 months ago
Hmm, I'm a bit confused. Do the maturity dates and credit ratings matter equally, or is one more important than the other? I want to make sure I don't miss any important details.
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Amber
9 months ago
I've got this! The promissory note in option A is too large and long-term to be exempt. Option B looks good with the short maturity and high credit rating. I'll go with that one.
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Taryn
9 months ago
Okay, let me think this through. The key seems to be the maturity date and the credit rating of the commercial paper. I'll need to review those details carefully.
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Maryanne
9 months ago
This question seems straightforward, but I want to make sure I understand the requirements for an "exempt security" correctly before answering.
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Stephaine
1 year ago
Because a security must be rated investment grade to be considered exempt, and BB is considered investment grade.
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Tegan
1 year ago
Why do you think that?
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Sharee
1 year ago
Ha! Trick question. The only 'exempt security' here is the one that doesn't exist - a $1 million bill that matures in 10 years. Now that's what I call 'exempt'!
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Trinidad
1 year ago
C) a $25,000 promissory note that matures in three months
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Millie
1 year ago
B) commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors
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Art
1 year ago
A) a $500,000 promissory note that matures in two years
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Stephaine
1 year ago
I disagree, I believe the answer is D.
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Sabra
1 year ago
Hmm, I'm not so sure. Isn't an 'exempt security' something that doesn't need to be registered with the SEC? I'd go with D, just to be safe.
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Wilson
1 year ago
Let's go with D then, it seems to be the most likely choice.
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Renato
1 year ago
I'm not sure, but D does seem to match the criteria for an exempt security.
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Nilsa
1 year ago
I agree, D is the one that fits the definition of an exempt security.
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Sharee
1 year ago
I think you're right, D seems like the safest option.
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Tegan
1 year ago
I think the answer is B.
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Shannan
1 year ago
C seems like the correct answer to me. A $25,000 promissory note that matures in three months would be considered an 'exempt security'.
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Buck
1 year ago
User 3: Yeah, that makes sense. It meets the requirements for an exempt security.
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Adolph
1 year ago
User 2: I agree, a $25,000 promissory note that matures in three months would be considered an 'exempt security'.
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Brittani
1 year ago
User 1: I think C is the correct answer.
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Annelle
1 year ago
I think the answer is B. Commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors meets the requirements for an 'exempt security'.
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Georgiana
1 year ago
User 3: Yes, that option meets the requirements for an exempt security.
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Long
1 year ago
User 2: I agree, commercial paper with a $100,000 face value and a maturity of five months that is rated AA by Standard and Poors is an exempt security.
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Aja
1 year ago
User 1: I think the answer is B.
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