CA State Test Questions

CA State Test
1.What is the exception for existing real estate licensees from appearing for the 20 hours of NMLS approved pre-license education? a) All applicants must authorize a credit report through NMLS by 12/31/2010. b) Existing real estate licensees will not need 20 hours of NMLS approved pre-license education if all other MLO requirements are met by 12/31/2010. c) All new applicants must pass the National & State component of the SAFE MLO test by 5/28/2010. d) All applicants must submit fingerprints through NMLS for a criminal background check by 5/28/2010.

Existing licensees are expected to have sufficient knowledge. So they are exempted from the training.
Correct Answer:

b) Existing real estate licensees will not need 20 hours of NMLS approved pre-license education if all other MLO requirements are met by 12/31/2010.

CA State Test
2.What is the fee for a licensed sales persons original application? a) b) c) d) $50 $60 $75 $80

CA State Test
The fee is 60 for an original examination in California.

Correct Answer:
b) $60

CA State Test
3.Are the fees refundable for a cancelled examination?

a) b) c) d)

Yes, always Yes, under some circumstances Maybe, if petition is filed by deadline No

CA State Test
No, the fees are nonrefundable under Business and Professionals code section 10207

Correct Answer:
d) No

CA State Test
4.Which of the following statements are true?

a) Income includes receipt of anything of value b) A broker is a person, including an agent appointed pursuant to Insurance Code section 1704, who represents, purports to represent, or allows a client reasonably to assume he or she represents, a client in an insurance transaction. c) A client is an insured or prospective insured with whom a broker transacts or may transact insurance. d) All of the above

CA State Test
All of the above are true.

Correct Answer:
d) All of the above

CA State Test
5.What does the California Finance Lenders Law Chapter 1 Article 2 deal with?
a) b) c) d) Exemptions Licensing Definition Loan Regulation

CA State Test
California Finance Lenders Law Chapter 1 Article 2 deals with exemptions.

Correct Answer:
a) Exemptions

CA State Test
6.Under CFR, is a bridge loan considered a consumer loan? a) b) c) d) Yes, always No Sometimes, but there are many exceptions Sometimes, limited with exceptions

CA State Test
"Consumer loan" does not include a reverse mortgage, an open line of credit as defined in Part 226 of Title 12 of the Code of Federal Regulations (Regulation Z), or a consumer credit transaction that is secured by rental property or second homes. "Consumer loan" does not include a bridge loan.

Correct Answer:
b) No

CA State Test
7.HFDA is also known as? a) b) c) d) Housing Act Civil Rights Act Holden Act Banking Regulation Act

CA State Test
The Unruh Act, the Housing Financial Discrimination Act, is also known as the Holden Act (HFDA). Correct Answer: c). Holden Act

CA State Test
8.An applicant who fails to disclose their social security number will be? a) Reported to the Federal Bureau of Investigation. b) Reported to the Franchise Tax Board and may have to pay a $100 penalty. c) Subjected to a search warrant. d) None of the above because it is not mandatory to disclose the Social Security Number

CA State Test
If an applicant fails to disclosure their SSN, they will be reported to the Franchise Tax Board (FTB), and may be accessed a $100 penalty by the FTB. Correct Answer: b). Reported to the Franchise Tax Board and may have to pay a $100 penalty.

CA State Test
9.Which of the following is NOT a major reason for license suspensions?
a) Your workers compensation company cancels your policy. b) Your surety company cancels one or more of your required bonds. c) You fail to resolve a civil court judgment within 90 days from the date of the notice to resolve the judgment. d) You fail to submit the appropriate proof of resolution to CSLB within 30 days of notification of an outstanding liability.

CA State Test
Failing to submit the appropriate proof of resolution to CSLB within 30 days of notification of an outstanding liability is not a major reason for license suspension. (But failing to do so within 60 days is)

Correct Answer:
d). You fail to submit the appropriate proof of resolution to CSLB within 30 days of notification of an outstanding liability.

CA State Test
10.An Accusation is verified based on? a) b) c) d) Information and belief Decision of agency Charges Language

CA State Test
The verification may be on information and belief.

Correct Answer: a) Information and belief

CA State Test
11.Which of the following is NOT true of Accusations under 11503?
a) It is a hearing to determine whether a right, authority, license or privilege should be revoked, suspended, limited or conditioned shall be initiated by filing an accusation. b) It shall be a written statement of charges which shall set forth in ordinary and concise language the acts or omissions with which the respondent is charged, to the end that the respondent will be able to prepare his defense. c) The accusation shall be verified unless made by a private officer acting in his official capacity or by an employee of the agency before which the proceeding is to be held. d) It shall specify the statutes and rules which the respondent is alleged to have violated, but shall not consist merely of charges phrased in the language of such statutes and rules.

CA State Test
The accusation shall be verified unless made by a private officer acting in his official capacity. Correct Answer:

c). The accusation shall be verified unless made by a private officer acting in his official capacity or by an employee of the agency before which the proceeding is to be held.

CA State Test
12.Which of the following is NOT true of The California Residential Mortgage Lending Act?
a) An applicant under the CRMLA may only obtain a license as a lender. b) The CRMLA is specifically designed to authorize and regulate mortgage banking activities c) Licensees are authorized to purchase and sell federally related mortgage loans and to provide contract underwriting services for institutional lenders. d) An applicant under the CRMLA may obtain a license as a lender, a servicer, or both.

CA State Test
An applicant under the CRMLA may obtain a license as a lender, a servicer, or both. (Not exclusively as a lender). Correct Answer: a).An applicant under the CRMLA may only obtain a license as a lender.

CA State Test
13.CRMLA stands for? a) b) c) d) California Residential Money Loan Act California Regional Mortgage Lending Act California Residential Mortgage Lending Act California Reform Loan Act

CA State Test
The California Residential Mortgage Lending Act (CRMLA) is contained in Division 20 of the California Financial Code, commencing with Section 50000.

Correct Answer: c) California Residential Mortgage Lending Act

CA State Test
14.Under California Finance Lenders Law which one of the following statements is false?
a) "Company" includes all domestic and foreign private corporations, limited liability companies, joint ventures, associations, syndicates, joint stock companies, and partnerships of every kind, unincorporated organizations, government or political subdivisions of a government, trustees and individuals. b) "Finance company" means a company subject to the California Finance Lenders Law and does not have the same meaning as "licensee." c) "Department" means the Department of Corporations of the State of California. d) "Law" refers the California Finance Lenders Law.

CA State Test
The California Finance Lenders Law does in fact have the same meaning as "licensee" as defined in Financial Code Section 22007. Correct Answer: b) "Finance company" means a company subject to the California Finance Lenders Law and does not have the same meaning as "licensee."

CA State Test
15.According to the finance company rules, which of the following are considered companies? a) Government or political subdivisions of a government, trustees and individuals. b) Partnerships of every kind, unincorporated organizations. c) Limited liability companies, joint ventures, associations, syndicates, joint stock companies. d) All of the Above

CA State Test
"Company" includes all domestic and foreign private corporations, limited liability companies, joint ventures, associations, syndicates, joint stock companies, and partnerships of every kind, unincorporated organizations, government or political subdivisions of a government, trustees and individuals. Correct Answer: d) All of the Above

CA State Test
16.Under the Unruh Civil Rights Act, which of the following places would NOT be required to provide protection from discrimination? a) b) c) d) Government subsidized low income housing Apartments for rent A privately owned home Government offices

CA State Test
The Unruh Civil Rights Act does not prevent people that own a private home from discriminating. Correct Answer: c)A privately owned home

CA State Test
17.Under the Unruh Civil Rights Act, which of the following places would NOT be required to provide protection from discrimination?

a) b) c) d)

Government subsidized low income housing Apartments for rent A privately owned home Government offices

CA State Test
The Unruh Civil Rights Act does not prevent people that own a private home from discriminating.

Correct Answer:
c) A privately owned home

CA State Test
18.Which one of the following defines "Own funds"? a) b) c) d) Cash Sales Exchange Loss

CA State Test
"Own funds" means either of the following: (A) Cash, corporate capital, or warehouse credit lines at commercial banks, savings banks, savings and loan associations, industrial loan companies, or other sources that are liability items on the person's financial statements, whether secured or unsecured Correct Answer: a) Cash

CA State Test
19.Which of the following is NOT an exemption to the license requirement? a) Short-term (vacation) rental agents b) Long-term rental agents c) Licensed personal property brokers d) Certain agricultural associations

CA State Test
Long-term rental agents are not exempt from the license requirements Correct Answer: b) Long-term rental agents

CA State Test
20. What is the primary role of the board? a) Investigate the applicants. b) Monitor the applicants. c) To ensure registrations or licenses are not issued to applicants who have serious criminal convictions d) Report convictions.

CA State Test
The rules are framed for the protection of people from individuals who have serious criminal convictions that are substantially related to the practice of the professional license. Correct Answer: c).To ensure registrations or licenses are not issued to applicants who have serious criminal convictions

CA State Test
21.Which statement best describe the boards principal objective?
a) It may not deny a license regulated by this code on the ground that the applicant knowingly made a false statement of fact required to be revealed in the application for the license b) It must ensure registrations or licenses are not issued to applicants who have serious criminal convictions substantially related to the practice of the professional license. c) A person shall be denied a license solely on the basis that he or she has been convicted of a felony d) It may license a person who has done an act involving dishonesty, fraud, or deceit with the intent to substantially benefit him or her.

CA State Test
One of the primary objectives of the board is to ensure registrations or licenses are not issued to applicants who have serious criminal convictions substantially related to the practice of the professional license.
Correct Answer:

b) It must ensure registrations or licenses are not issued to applicants who have serious criminal convictions substantially related to the practice of the professional license.

CA State Test
22. CFL brokers can broker to?

a) CFL only b) CFL, RML c) CFL, RML, DRE d) CFL, RML, state chartered and federally chartered institutions

CA State Test
CFL brokers can only broker to CFL Correct Answer: a) CFL only

CA State Test
23. Title II Mortgagee Approval with HUD is also known as? a) CFL b) DRE c) RML d) Full Eagle

CA State Test
You will also need a Title II Mortgagee Approval with HUD also known as a Full Eagle in order to apply for an RML License.

Correct Answer:
d) Full Eagle

CA State Test
24. Which of the following statements about the California Business and Professions Code Section 10177 is false? a) There is no statutory authorization for DRE to revoke his license for the commission of a misdemeanor not involving moral turpitude b) The DRE's submission did not reference or rely on any provision of section 10177 c) Section 490 does not provide independent statutory authorization for DRE to suspend or revoke the license of a person based on his or her conviction of a crime. d) The latter provision authorizes DRE to take disciplinary action against a licensee convicted of a misdemeanor, unless the offense involves moral turpitude.

CA State Test
The latter provision DOES NOT authorize DRE to take disciplinary action against a licensee convicted of a misdemeanor, unless the offense involves moral turpitude.

Correct Answer:
d) The latter provision authorizes DRE to take disciplinary action against a licensee convicted of a misdemeanor, unless the offense involves moral turpitude.

CA State Test
25. When can a board suspend or revoke a license?
a) When the licensee has been convicted of a crime not related to the functions or duties of the profession for which the license was issued b) When the licensee has been convicted of a crime related to the qualifications for which the license was issued c) When the licensee has been convicted of a crime not related to the qualifications for which the license was issued. d) When the licensee has not been convicted of a crime.

CA State Test
According to Business and Professions Code, Section 490 a board may suspend or revoke a license on the ground that the licensee has been convicted of a crime, if the crime is substantially related to the qualifications, functions, or duties of the business or profession for which the license was issued.

Correct Answer:
b) When the licensee has been convicted of a crime related to the qualifications for which the license was issued

CA State Test
26. How many Continuing Education units must each auxiliary licensee complete during each 2 year cycle? a) b) c) d) 10 5 25 30

CA State Test
Each auxiliary licensee must complete 25 Continuing Education units, of an approved type, during each 2year renewal cycle, except that RDHAPs must complete 35 units. Correct Answer: c) 25

CA State Test
27. What action can the commissioner do if an issue of Continuing Education unit requirements arises?
a) The commissioner shall either advise the applicant of the applicability of Section 10171.2 on an extended period for compliance; or advise the applicant that his/her rights to operate under the prior license will expire in five days. b) The commissioner can renew the license himself. c) The commissioner can cancel the license. d) The commissioner can help the applicant to continue without the continuing education requirements fulfilled.

CA State Test

If the commissioner determines that the applicant has not complied with the continuing education requirements the commissioner shall either (1) advise the applicant of the applicability of Section 10171.2 on an extended period for compliance; or (2) advise the applicant that his rights to operate under the prior license will expire five days from the date such notice is mailed, or on the date the license would normally expire, whichever is later. Correct Answer: a) The commissioner shall either advise the applicant of the applicability of Section 10171.2 on an extended period for compliance; or advise the applicant that his/her rights to operate under the prior license will expire in five days.

CA State Test
28. What step do you take if you lost a certificate?
a) Complete the course again. b) Request a duplicate from the sponsor of the course involved. c) Request a new real estate sales person license. d) Request a new broker license.

CA State Test
If you have lost a certificate, request a duplicate from the sponsor of the course involved; course sponsors are required to maintain their records for a five-year period. Correct Answer:

b) Request a duplicate from the sponsor of the course involved.

CA State Test
29.What is the fee to replace an existing or lost license certificate? a) b) c) d) $20 $10 $25 $15

CA State Test
A fee of $15 is required for the following transactions: To replace an existing or lost license certificate.

Correct Answer:
d)15

CA State Test
30.Which statements are considered good advice about advertising? a) Don't use false or misleading advertising, or advertise a price you don't intend to honor. b) Don't advertise to do work you're not licensed to perform. c) Don't advertise about bonding. d) All of the above

CA State Test
All of these are good advice for advertising. Correct Answer:

d) All of the above

CA State Test
31.What should you do when you see advertising for an unlicensed contractor? a) b) c) d) Notify the CSLB. Call the local police. Report it to the registrar. Call an attorney.

CA State Test
You should notify the CSLB whenever you see advertising for an unlicensed contractor. Correct Answer: a) Notify the CSLB.

CA State Test
32.Which of the following is not a requisite to keep track of how much money you are holding for each client?
a) When you receive other properties on behalf of a client, you dont have to identify what you've received in your written records, label the properties to identify the owner, and keep them safe. b) All funds you receive from or hold for a client must be deposited into a bank account that is clearly labeled as a client trust bank account. c) All client trust bank accounts need not maintained in California. d) The receipt of money or other property on behalf of a client need not be notified to the client.

CA State Test
It is one of the rules that funds received from or hold for a client must be deposited into a bank account that is clearly labeled as a client trust bank account. Correct Answer: b) All funds you receive from or hold for a client must be deposited into a bank account that is clearly labeled as a client trust bank account.

CA State Test
33.What is commingling?
a) When you refuse to tell clients how much money you are holding for them. b) When you withdraw money from a client trust bank account that your client disputes. c) When you refuse to tell the State Bar how much money you're holding for the client or what you've done with it while you've had it. d) When you keep money belonging to you or your law firm (other than money for bank charges) in any of your client trust bank accounts.

CA State Test
Commingling is when you deposit any money belonging to you or your law firm into any of your client trust bank accounts (except for the small amounts of money necessary to cover bank charges).

Correct Answer:
d) When you keep money belonging to you or your law firm (other than money for bank charges) in any of your client trust bank accounts.

CA State Test
34. Is commingling of funds legal? a) b) c) d) No, it is illegal Yes, always but not advised Yes, under some limited circumstances Yes, only when held in special escrow accounts

CA State Test
Commingling of funds in itself is not illegal, however it exposes ones business to accounting errors and claims of impropriety.

Correct Answer:
b) Yes, always but not advised

CA State Test
35. Which of the following statements is false?
a) The licensee has the right to appeal the agency's final decision and order through a Writ of Administrative Mandamus to the Superior Court of California. b) The Office of Administrative Hearings is an independent hearing tribunal established by the Legislature to implement the Administrative Procedure Act c) The time for filing an appeal depends on a number of factors, but it can be as little as two weeks from the order of denial, suspension or revocation. d) None of the statements are false

CA State Test
The time for filing an appeal depends on a number of factors, but it can be as little as 30 DAYS from the order of denial, suspension or revocation. Correct Answer: c) The time for filing an appeal depends on a number of factors, but it can be as little as two weeks from the order of denial, suspension or revocation.

CA State Test
36.What is the maximum time allowed to file a petition for reinstatement of a revoked or suspended license? a) Within the period of 30 days from the date of decision of suspension. b) Within a period of six months from the date of decision of suspension. c) Within a period of 9 months from the date of decision of suspension. d) After a period of not less than one year from the effective date of decision of suspension.

CA State Test
It is the maximum time allowed to the party to understand his guilt and recover from it. Correct Answer: d) After a period of not less than one year from the effective date of decision of suspension.

CA State Test
37.What can a salesperson, employed by a real estate broker whose license is revoked or suspended, do to their license? a) Submit evidence of the remaining two required college-level courses to keep their licenses. b) Transfer their licenses to a new employing broker. c) Appeal the decision and keep their licenses. d) Have their licenses transformed into conditional licenses.

CA State Test
When a real estate broker license is revoked or suspended, the licenses of every real estate salesperson in the broker's employ are automatically canceled. Such salespersons may transfer their licenses to a new employing broker.

Correct Answer:
b) Transfer their licenses to a new employing broker.

CA State Test
38.Which of the following is NOT a major reason for loss of license status?
a) A person holding a license allows one year to elapse from the expiration date without applying for (late) renewal. b) A salesperson is issued a conditional license which is suspended by operation of the law and the individual fails to submit evidence of the remaining two required college-level courses within four years from the date the license was issued. c) A license is revoked. d) When a person holding a license allows two years to elapse from the expiration date without applying for (late) renewal submitting evidence of completion of the continuing education requirements, and paying the required fee.

CA State Test
When a person holding a license allows one year to elapse from the expiration date without applying for (late) renewal is not a reason for loss of license status. Correct Answer: a) A person holding a license allows one year to elapse from the expiration date without applying for (late) renewal.

CA State Test
39.What is the penalty, as per civil liability under the amended Truth in Lending Act, a creditor may be liable to a consumer?
a) A creditor is subject to a fine of not more than $5,000 or imprisonment for not more than one year, or both, b) A creditor may be liable to a consumer for a statutory penalty of twice the amount of the finance charge, with a minimum of $100 and a maximum of $1,000. c) A civil penalty of $11,000 for each violation. d) Imprisonment for a period of one month and a penalty of $500.

CA State Test
The creditor is supposed to know his or her responsibilities owed to the customer. Correct Answer:

b) A creditor may be liable to a consumer for a statutory penalty of twice the amount of the finance charge, with a minimum of $100 and a maximum of $1,000.

CA State Test
40.Violation of the Truth in Lending Act will result in? a) A fine not to exceed $1000. b) A fine of not more than $5,000 or imprisonment for not more than one year, or both c) Imprisonment for two years or more. d) A fine of $10,000.

CA State Test
A creditor is also subject to a fine of not more than $5,000 or imprisonment for not more than one year, or both, for willfully and knowingly violating the Act or Regulation Z by giving false or inaccurate information, failing to provide required disclosures, or consistently understating the annual percentage rate. Correct Answer: b) A fine of not more than $5,000 or imprisonment for not more than one year, or both

CA State Test
41.What is a reverse mortgage? a) A loan given to seniors to convert a portion of the equity into cash. b) A loan given to senior citizen to remove all mortgage loans. c) A loan given to a debtor under 30 years of age to modify his existing loan. d) A loan without any form of amortization.

CA State Test
A reverse mortgage is a loan for senior citizens who own a residential house to pledge it to the lender to get a lump sum or a monthly payment. The senior citizen can or must reside in the pledged house until his death. His nominee or next of kin has the right to release the pledge by repaying the whole amount the senior citizen has taken from the lender so far with interest; else the lender will become the owner of the house.

Correct Answer: a) A loan given to seniors to convert a portion of the equity into cash.

CA State Test
42. Which is NOT an eligibility criterion when applying for an FHAs HECM reverse mortgage?
a) You should own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan. b) You should be a homeowner 62 years of age or older. c) Your home must be a single family one unit home occupied by the borrower. d) To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older.

CA State Test
To be eligible for the FHA HECM, it is a must that your home be a single family home or a 1-4 unit home with one unit occupied by the borrower. Correct Answer: c) Your home must be a single family one unit home occupied by the borrower.

CA State Test
43. Who is responsible for disproving material fact? a) b) c) d) The Client. The broker. An Insurer. The Supreme Court.

CA State Test
It is a broker's responsibility to find a way to prove that facts alleged as material are in fact not material. The broker is required to uphold the relevant codes.

Correct Answer:
b) The broker.

CA State Test
44. How long should you keep the complete record of all your clients after disbursement? a) b) c) d) At least 5 Years At least 10 Years At least 3 Years Minimum of One year

CA State Test
For at least five years after disbursement you have to keep complete records of all client money, securities or other properties that are entrusted to you. Correct Answer: a) At least 5 Years

CA State Test
45.What should be included in an accusation? a) Testimony of witnesses, lawyer's notes, and summary of trial motions. b) A list of charges phrased in the language of statutes and rules allegedly violated. c) A statement of charges and the specific statutes and rules allegedly violated. d) The accuser's written statement.

CA State Test
The accusation shall be a written statement of charges which shall set forth in ordinary and concise language the acts or omissions with which the respondent is charged, to the end that the respondent will be able to prepare his defense. It shall specify the statutes and rules which the respondent is alleged to have violated, but shall not consist merely of charges phrased in the language of such statutes and rules.

Correct Answer:

c) A statement of charges and the specific statutes and rules allegedly violated.

CA State Test
46.A mortgage banker licensed under CRMLA must have?
a) A surety bond in the amount of $20,000. b) A sole proprietorship c) A background check performed by the Federal Bureau of Investigation (FBI) d) Audited financial statements demonstrating tangible net worth of at least $250,000.

CA State Test
A mortgage banker licensed under CRMLA must have audited financial statements demonstrating tangible net worth of at least $250,000. Correct Answer: d) Audited financial statements demonstrating tangible net worth of at least $250,000.

CA State Test
47. Which agencies have generally delegated broad authority and wide discretion to develop regulations based on their expertise? a) b) c) d) Private health agencies Public health agencies Public insurance agencies Private medical agencies

CA State Test
Public health agencies are generally delegated broad authority and wide discretion to develop regulations and enforcement policies based on their expertise. Correct Answer: b) Public health agencies

CA State Test
48. Can a licensee remain silent and need not testify at his hearing/trial? a) The defendant can remain silent throughout the trial. b) The licensee has no right to remain silent, meaning he must testify at his trial. c) The licensee has a right to remain silent and need not testify at his trial. d) A defendant is entitled to a jury of his peers and so he can remain silent.

CA State Test
A professional license is a privilege and not a right. The safety of the public becomes paramount and so licensee is given only a few rights. Correct Answer: b) The licensee has no right to remain silent, meaning he must testify at his trial.

CA State Test
49 Which of the following statement is false?
a) Access for persons with disabilities addressed under California Civil Code Section 54 through 55. b) Individuals with disabilities have the same right as the general public to the full and free use of the streets, highways, sidewalks, walkways, public buildings, medical facilities, including hospitals, clinics, and physicians' offices, public facilities, and other public places. c) Individuals with disabilities are entitled to full and equal access to all housing accommodations offered for rent, lease, or compensation. d) Individuals with disabilities are not required to have access to transportation with service dogs.

CA State Test
Access for persons with disabilities under California Civil Code Section 54 through 55.2 also covers access to transportation and service dogs. Correct Answer: d) Individuals with disabilities are not required to have access to transportation with service dogs.

CA State Test
50. Who is NOT considered a "Licensed person?
a) A real estate broker licensed under the Real Estate Law (Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code). b) A finance lender or broker licensed under the California Finance Lenders Law (Division 9 (commencing with Section 22000)), c) A commercial or industrial bank organized under the Banking Law (Division 1 (commencing with Section 99) d) A commercial or industrial bank organized under the Banking Law (Division 1 (commencing with Section 88)

CA State Test
According to the passage a commercial or industrial bank organized under the Banking Law (Division 1 (commencing with Section 99 only) can be a "Licensed person.

Correct Answer:
d) A commercial or industrial bank organized under the Banking Law (Division 1 (commencing with Section 88)

CA State Test
51. When a real estate broker's license is revoked or suspended, what happens to the real estate sales employed by the broker? a) Their licenses are automatically canceled but they may transfer their licenses to a new broker. b) They can continue to operate without a licensed broker. c) They must pay a re-license fee. d) They will be issued a conditional license until the broker can become re-licensed.

CA State Test
When a real estate broker license is revoked or suspended, the licenses of every real estate salesperson in the brokers employ are automatically canceled. Such salespersons may transfer their licenses to a new employing broker.

Correct Answer:
a) Their licenses are automatically canceled but they may transfer their licenses to a new broker.

CA State Test

Thank You