RN Domain 4: Reduction of Risk Potential (Quiz 2) Welcome to your Series 66 Practice Quizzes. Note: We designed four (4) parts of practice quizzes for each Domain. Each part has 25 questions. Domain 3 (part 4): Client Investment Recommendations and Strategies. (25 questions) Please click NEXT to start your Free Series 66 Practice Quizzes right away. Best of Luck! 1. Series 66, Client Investment Recommendations and Strategies,Series 66 A registered broker-dealer would not be able to open an account for A. A) two unrelated individuals. B. B) the CEO of a company whose stock is NYSE-traded. C. C) a person deemed mentally incompetent. D. D) the estate of a deceased individual. None 2. Series 66, Client Investment Recommendations and Strategies,Series 66 Under industry rules, customers who wish to trade options must receive a copy of the options disclosure document (ODD) A. A) at or before the mailing of the confirmation representing the first options trade B. B) at or before account approval C. C) at or before the mailing of the next monthly statement D. D) within 15 days of account approval None 3. Series 66, Client Investment Recommendations and Strategies,Series 66 Which of the following actions should be taken by an agent when a client decides to open an options account? A. A) Assure that an options agreement has been signed prior to the first trade taking place B. B) Review with the client the risks involved when trading options before the first options trade C. C) Obtain approval from the designated options supervisor to open the account no later than 1 business day after the first options trade D. D) Provide an options disclosure document no later than 15 days after the first trade None 4. Series 66, Client Investment Recommendations and Strategies,Series 66 All of the following permit investments into various securities, such as stocks, bonds, and mutual funds EXCEPT A. A) an HSA. B. B) a traditional IRA. C. C) a Roth IRA. D. D) an FSA. None 5. Series 66, Client Investment Recommendations and Strategies,Series 66 Your clients, a married couple, are trying to decide whether to open an account as joint tenants with right of survivorship or tenants by the entirety. You might point out to them that one of the differences to consider is that: A. A) a JTWROS account requires the consent of both parties to make a trade. B. B) only the JBE account avoids probate upon the death of the first tenant. C. C) any 2 people can open a JBE account, while JTWROS accounts are limited to married couples. D. D) a JBE account requires the consent of both parties to make a trade. None 6. Series 66, Client Investment Recommendations and Strategies,Series 66 Under the Uniform Gifts to Minors Act, Ralph wants to give some stock to his brother's son, Jose. His nephew's father, Bob, is the legal guardian. If Ralph wants to name himself as custodian, which of the following needs to be done? A. A) Ralph must file the proper legal documents. B. B) Ralph must receive legal permission to act as custodian. C. C) Ralph must have the permission of the guardian. D. D) Ralph must open the account and name himself as the custodian. None 7. Series 66, Client Investment Recommendations and Strategies,Series 66 Which of the following is among the items of information that must be entered on a new account form? A. A) Names of other broker-dealer firms already holding accounts for the prospective customer B. B) What educational degree(s) the accountholder has earned C. C) Names and addresses of at least 2 of the prospective customer's neighbors as personal references D. D) Names of all persons who will have access to the account None 8. Series 66, Client Investment Recommendations and Strategies,Series 66 An investment adviser registered in 4 states would be permitted to enter into an advisory contract with all of the following prospective clients except A. A) a university endowment fund. B. B) a registered investment company. C. C) a single parent. D. D) a charitable foundation. None 9. Series 66, Client Investment Recommendations and Strategies,Series 66 Construction of an investment policy statement (IPS) requires identifying the client's objectives and constraints. Which of the following would not be in the list of constraints? A. A) Time horizon B. B) Liquidity risk C. C) Taxes D. D) Risk tolerance None 10. Series 66, Client Investment Recommendations and Strategies,Series 66 An investment adviser would be able to enter into an advisory contract with all of the following except A. A) a minor. B. B) a philanthropic foundation. C. C) a closed-end investment company. D. D) three brothers in a joint account. None 11. Series 66, Client Investment Recommendations and Strategies,Series 66 Which of the following investments could be found in an UTMA but not an UGMA? A. A) Sector mutual fund B. B) Real estate C. C) Bonds D. D) Preferred stock None 12. Series 66, Client Investment Recommendations and Strategies,Series 66 Which of the following items is NOT required under the customer identification program (CIP)? A. A) Sex B. B) Visa details for non-citizens C. C) Physical address D. D) Date of birth None 13. Series 66, Client Investment Recommendations and Strategies,Series 66 Among the benefits of an HSA is A. A) funds may be used for various medical expenses once the low deductible has been met. B. B) up to $10,000 per year may be accumulated. C. C) funds not used for health expenses may be invested in mutual funds and other securities. D. D) the amount that may be contributed is based on the number of dependents. None 14. Series 66, Client Investment Recommendations and Strategies,Series 66 A client is completing a new account form that contains questions about the investor's investing experience and knowledge. More than likely, what type of account is being opened? A. A) Margin B. B) Options C. C) Discretionary D. D) Retirement None 15. Series 66, Client Investment Recommendations and Strategies,Series 66 Ms. Abbot has a joint account with her sister. She enters a sell order in the account and instructs that the proceeds check be made out to her only. If your firm sends the check but makes it payable to both Ms. Abbot and her sister, this is an example of A. A) the proper joint account procedure B. B) an unfortunate error that can be reconciled with the broker-dealer through a process called reclamation C. C) an unlawful practice because the transaction was unauthorized D. D) not following instructions, a prohibited practice under the Uniform Securities Act None 16. Series 66, Client Investment Recommendations and Strategies,Series 66 If a customer would like to open a custodial UGMA or UTMA account for his nephew, a minor, the uncle can A. A) open the account provided the proper trust arrangements are filed first B. B) be custodian for the account only if he is also the minor’s legal guardian C. C) open the account and name himself custodian D. D) open the account, but he needs a legal document evidencing the nephew’s parents’ prior approval of the account None 17. Series 66, Client Investment Recommendations and Strategies,Series 66 Construction of an investment policy statement (IPS) requires identifying the client's objectives and constraints. Which of the following would not be in the list of constraints? A. A) Time horizon B. B) Liquidity risk C. C) Taxes D. D) Risk tolerance None 18. Series 66, Client Investment Recommendations and Strategies,Series 66 Under UTMA, which of the following are allowable distributions for the benefit of the minor? A. A) Clothing expense for child who has gone thru a growth spurt B. B) The cost to attend a summer camp C. C) A percentage of housing expenses, such as the utilities for his bedroom D. D) A percentage of food expense None 19. Series 66, Client Investment Recommendations and Strategies,Series 66 The term security would include which of the following? A. A) 403(b) plans B. B) Section 529 plans C. C) Indentures D. D) Coverdell ERAs None 20. Series 66, Client Investment Recommendations and Strategies,Series 66 Which of the following types of businessowners has unlimited liability for the business's debts? A. A) Limited partner B. B) Member of a limited liability company (LLC) C. C) Owner of a sole proprietorship D. D) Shareholder of a corporation None 21. Series 66, Client Investment Recommendations and Strategies,Series 66 In an account opened by 2 individuals as joint tenants with rights of survivorship, all of the following are true EXCEPT A. A) in the event of death, the other party assumes full ownership of the account B. B) stock certificates may be delivered in the name of either party C. C) mail may be directed to the joint owner agreed upon by both parties to the account D. D) orders may be entered by either party None 22. Series 66, Client Investment Recommendations and Strategies,Series 66 When does a deliberate omission of a fact in a securities sale constitute fraud? A. A) If a reasonable person would base an investment decision on the omitted information B. B) Anytime the information is known by more than 15 people C. C) Only when a new issue of securities is being offered D. D) Only if the information was known to be true None 23. Series 66, Client Investment Recommendations and Strategies,Series 66 A feature of which of the following business entities is limited liability for owners, as well as flow-through of income? A. A) General partnership B. B) Sole proprietorship C. C) Limited partnership D. D) C corporation None 24. Series 66, Client Investment Recommendations and Strategies,Series 66 The federal legislation that requires broker-dealers to verify the identity of any person opening an account is A. A) the Uniform Securities Act of 1956 B. B) the Insider Trading and Securities Fraud Enforcement Act of 1988 C. C) the Securities Exchange Act of 1934 D. D) the USA PATRIOT Act of 2001 None 25. Series 66, Client Investment Recommendations and Strategies,Series 66 When does a customer have to receive the OCC Options Disclosure Document? A. A) Within 5 business days of the first options trade B. B) Before accepting the customer’s first order to trade options covered by the ODD C. C) Within 15 days of account approval by the firm's designated options supervisor D. D) With the confirmation of the first options transaction None 1 out of 25 Time is Up! Time's up
