1.
Series 66, Economic Factors and Business Information,Series 66
An investment of $2,000 made 10 years ago is now worth $8,000. Using the Rule of 72, the approximate compounded annual rate of return is
1 out of 100
2.
Series 66, Economic Factors and Business Information,Series 66
If an investment can be expected to return 8%, using the rule of 72, what is the present value needed to have $50,000 for a child's education in 18 years?
2 out of 100
3.
Series 66, Economic Factors and Business Information,Series 66
Which of the following statements is NOT correct?
3 out of 100
4.
Series 66, Investment Vehicle Characteristics,Series 66
Which of the following statements concerning equity securities is not correct?
4 out of 100
5.
Series 66, Investment Vehicle Characteristics,Series 66
Which of the following statements about equity securities is NOT true?
5 out of 100
6.
Series 66, Investment Vehicle Characteristics,Series 66
The primary defining characteristic of an equity security is
6 out of 100
7.
Series 66, Investment Vehicle Characteristics,Series 66
All of the following represent ownership in corporation except
7 out of 100
8.
Series 66, Investment Vehicle Characteristics,Series 66
An investor in an equity security
8 out of 100
9.
Series 66, Investment Vehicle Characteristics,Series 66
Investments in which of the following offer the best long-term protection against inflation?
9 out of 100
10.
Series 66, Investment Vehicle Characteristics,Series 66
A common stockholder's rights include all of the following EXCEPT
10 out of 100
11.
Series 66, Investment Vehicle Characteristics,Series 66
A company's dividend on its common stock is
11 out of 100
12.
Series 66, Investment Vehicle Characteristics,Series 66
An investor holding which of the following equity securities would NOT expect to have preemptive rights?
12 out of 100
13.
Series 66, Investment Vehicle Characteristics,Series 66
Which of the following statements about dividends on common stock is NOT true?
13 out of 100
14.
Series 66, Client Investment Recommendations and Strategies,Series 66
A registered broker-dealer would not be able to open an account for
14 out of 100
15.
Series 66, Client Investment Recommendations and Strategies,Series 66
Among the clients of a broker-dealer could be
15 out of 100
16.
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
16 out of 100
17.
Series 66, Client Investment Recommendations and Strategies,Series 66
A broker-dealer would not be able to open an account for
17 out of 100
18.
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
18 out of 100
19.
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
19 out of 100
20.
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?
20 out of 100
21.
Series 66, Client Investment Recommendations and Strategies,Series 66
One major difference between the customer identification program (CIP) and the new account opening rules of the regulatory bodies is that
21 out of 100
22.
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:
22 out of 100
23.
Series 66, Client Investment Recommendations and Strategies,Series 66
Two sisters might wish to open an account as tenants in common (TIC) rather than JTWROS in order to
23 out of 100
24.
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?
24 out of 100
25.
Series 66, Client Investment Recommendations and Strategies,Series 66
All of the following actions must be completed prior to customers entering their first option trade EXCEPT
25 out of 100
26.
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)
26 out of 100
27.
Series 66, Client Investment Recommendations and Strategies,Series 66
Which of the following documents would aid an investment adviser in its responsibility to fully understand the needs of a client when making investment recommendations?
27 out of 100
28.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
During your training, you overhear your manager discussing the Chinese wall. This is probably referring to
28 out of 100
29.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
An agent omits facts that a prudent investor requires to make informed decisions. Under the Uniform Securities Act, this action is
29 out of 100
30.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
All of the following activities could result in the revocation of an agent's registration EXCEPT
30 out of 100
31.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Which of the following statements regarding investment adviser compliance rules is TRUE?
31 out of 100
32.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Fraud would include the willful omission of
32 out of 100
33.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Under the Securities Exchange Act of 1934, which of the following statements regarding reports required to be filed with the SEC is TRUE?
33 out of 100
34.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
The SEC has enumerated specific items that must be included in Investment Adviser written compliance manuals EXCEPT
34 out of 100
35.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Jessica is an investment adviser representative for an SEC-registered investment adviser. She lives in State X and receives a letter from a former college friend requesting a contribution to the friend's political campaign for governor of State Y. As it happens, Jessica's firm provides advisory services to State Y's employee retirement fund and Jessica actively solicits business from other state agencies. Which of the following actions would be permitted to Jessica under the SEC's pay-to-play rule without causing any concerns to her firm?
35 out of 100
36.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Protection of the investing public is one of the major objectives of the SEC. Much of the protection comes from the disclosure requirements enveloping the industry. Among the disclosure forms used is Form 13F. To come under the SEC's requirement to file a Form 13F, an institutional manager must have discretion over
36 out of 100
37.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
The compliance rules of the Investment Advisers Act of 1940 require all of the following EXCEPT
37 out of 100
38.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Under rule 206(4)-7 of the Investment Advisers Act of 1940, each investment adviser registered with the SEC is required to adopt and implement written policies and procedures designed to prevent violation of the federal securities laws. Ensuring that this is done is the role of ​
38 out of 100
39.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Wealth Creation Advisers (WCA) is a federal covered investment adviser specializing in consulting to pension plans. WCA's principal office is located in State L. The governor of State L is running for re-election. If WCA were to make a $350 contribution to the campaign, under the SEC's pay-to-play rule,
39 out of 100
40.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
The Investment Advisers Act of 1940 requires advisers to prepare and adhere to a code of ethics. Which of the following is charged with the responsibility of enforcing that code?
40 out of 100
41.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Review of an SEC-registered investment adviser's policies and procedures designed to prevent violation of the federal securities laws must take place no less frequently than
41 out of 100
42.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
If having discretion over $100 million or more in 13(f) securities, which of the following would be exempt from filing a Form 13F?
42 out of 100
43.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
All of the following statements regarding the role of the chief compliance officer of an investment adviser are correct EXCEPT
43 out of 100
44.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Richard Alan is a longtime customer of yours and usually calls in orders identifying himself as Dick. Today, you receive a call requesting that half of the available funds in his account be wired to an offshore bank. When you say that his voice sounds different, he replies that he has a sore throat and that is why he doesn't sound like himself. Then you recall, when you answered the phone, he said that this is Mr. Richard Alan calling. At first you thought he was having fun, but now you might suspect
44 out of 100
45.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
The federal law dealing with privacy matters for financial institutions is
45 out of 100
46.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
It is not uncommon to find financial planners who use their home as the base of their operations. When a financial planner who works from home is also registered as an agent of a broker-dealer, she must
46 out of 100
47.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
For purposes of safeguarding customer information, which of the following would be considered a covered account?
47 out of 100
48.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
The practice of stealing an individual's personal information for criminal activity is generally referred to as
48 out of 100
49.
Series 66, Client Investment Recommendations and Strategies,Series 66
During your annual review with your clients, Matt and Sally Eberhart, they indicate that they think it is time to start putting away some money for college for their 3-year-old son. They ask you to describe the advantage of using an UTMA account over a Coverdell ESA. You would likely point out all of the following as advantages EXCEPT
49 out of 100
50.
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?
50 out of 100
51.
Series 66, Client Investment Recommendations and Strategies,Series 66
The child of one of your clients is headed off for a year of graduate study at the University of Oxford in England. The Section 529 plan used to fund the child's undergraduate study still has about $20,000 in the account. Because Oxford is on the U.S. Department of Education's list of approved institutions, qualified expenses would include which of the following?
51 out of 100
52.
Series 66, Client Investment Recommendations and Strategies,Series 66
Which of the following investments could be found in an UTMA but not an UGMA?
52 out of 100
53.
Series 66, Client Investment Recommendations and Strategies,Series 66
A tax-advantaged medical savings account available to employees enrolled in a high-deductible health plan is
53 out of 100
54.
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
54 out of 100
55.
Series 66, Client Investment Recommendations and Strategies,Series 66
Which of the following statements regarding Section 529 plans is CORRECT?
55 out of 100
56.
Series 66, Client Investment Recommendations and Strategies,Series 66
Among the benefits of an HSA is
56 out of 100
57.
Series 66, Client Investment Recommendations and Strategies,Series 66
Under UTMA, the custodian must be
57 out of 100
58.
Series 66, Client Investment Recommendations and Strategies,Series 66
The term security would include which of the following?
58 out of 100
59.
Series 66, Client Investment Recommendations and Strategies,Series 66
The unethical business practice of purchasing and selling a security for the purpose of creating an appearance of market activity is known as
59 out of 100
60.
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
60 out of 100
61.
Series 66, Client Investment Recommendations and Strategies,Series 66
An employer offers its employees the opportunity to use tax-deductible funds to pay for health costs, as long as they enroll in a high-deductible health plan. This would be a description of
61 out of 100
62.
Series 66, Client Investment Recommendations and Strategies,Series 66
Under UTMA, which of the following are allowable distributions for the benefit of the minor?
62 out of 100
63.
Series 66, Client Investment Recommendations and Strategies,Series 66
Which of the following is the beneficial owner of securities in an UTMA account?
63 out of 100
64.
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?
64 out of 100
65.
Series 66, Client Investment Recommendations and Strategies,Series 66
Which of the following does not provide for a change of beneficiary?
65 out of 100
66.
Series 66, Client Investment Recommendations and Strategies,Series 66
When does a deliberate omission of a fact in a securities sale constitute fraud?
66 out of 100
67.
Series 66, Economic Factors and Business Information,Series 66
One of your clients owns shares of the NERP Corporation's senior preferred stock. He is concerned about NERP's financial solvency and wonders where he would fall in the event of NERP declaring bankruptcy. The proper response is, the client's claim is
67 out of 100
68.
Series 66, Economic Factors and Business Information,Series 66
The STU Corporation has issued common stock, preferred stock, promissory notes, and mortgage bonds. Should STU enter bankruptcy proceedings, the order of payment against claims would be
A. A) the preferred stock, the common stock, the mortgage bonds, and the promissory notes.
B. B) the mortgage bonds, the promissory notes, the preferred stock, and the common stock.
C. C) the mortgage bonds, the preferred stock the common stock, and the promissory notes.
D. D) the promissory notes, the mortgage bonds, the preferred stock, and the common stock.
None
68 out of 100
69.
Series 66, Investment Vehicle Characteristics,Series 66
One of your clients is considering allocating about 10% of her portfolio to commodities. Her current portfolio is a mix of stocks, bonds, and broad market index ETFs. Relative to her existing portfolio, you would explain to her that the primary benefit of the commodity investment is most likely
69 out of 100
70.
Series 66, Investment Vehicle Characteristics,Series 66
One reason for including commodities in an investment portfolio is because they have a high correlation to
70 out of 100
71.
Series 66, Investment Vehicle Characteristics,Series 66
Which of the following investments is least appropriate for a client primarily concerned with liquidity?
71 out of 100
72.
Series 66, Investment Vehicle Characteristics,Series 66
If near-term liquidity is the only objective for a client, which of the following pairs of investments represents the most/least liquid?
72 out of 100
73.
Series 66, Investment Vehicle Characteristics,Series 66
With respect to liquidity and potential for diversification, in comparing alternative investments to exchange-traded stocks, the markets for alternative investments are generally:
73 out of 100
74.
Series 66, Investment Vehicle Characteristics,Series 66
Which of the following would be considered a precious metal?
74 out of 100
75.
Series 66, Investment Vehicle Characteristics,Series 66
Commodity contracts are available on many different types of commodities. One of those types is precious metals. Included in the definition of a precious metal would be all of the following except
75 out of 100
76.
Series 66, Investment Vehicle Characteristics,Series 66
Commodities contracts are available on
76 out of 100
77.
Series 66, Investment Vehicle Characteristics,Series 66
An investment adviser representative has several clients who are interested in adding precious metals to their portfolios. Which of the following is the IAR most likely to recommend?
77 out of 100
78.
Series 66, Investment Vehicle Characteristics,Series 66
Which of the following statements regarding a zero-coupon corporate bond is TRUE?
78 out of 100
79.
Series 66, Investment Vehicle Characteristics,Series 66
Lisa Brownard is considering investing in gold. She owns a portfolio of stocks, bonds, and money market securities. Relative to her existing portfolio, the primary benefit of the gold investment is most likely
79 out of 100
80.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Your advisory customer calls to check on her account value at 9:00 am, but you were unavailable at the time. It is now 2:00 pm and you are able to call her back. If between 9:00 am and 2:00 pm her account value dropped from $711,500 to $710,000, what should you tell her?
80 out of 100
81.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
NASAA's Statement of Policy on Unethical or Dishonest Business Practices of Broker-Dealers and Agents prohibits excessive activity in the account of a client for the purpose of generating commissions. This activity, frequently called churning, would likely be excused
81 out of 100
82.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
In an effort to make things easier for her clients, an agent redacts certain material information from sales literature relating to a sophisticated investment product her firm is offering. The agent
82 out of 100
83.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
A customer buys 200 shares of a common stock at $30 per share. On a day when the stock's price is down $5, the customer calls her agent and inquires as to its current price, and the agent tells her the price is around where she bought it. In the next few weeks, the stock's price turns around and the customer liquidates the shares at $35 per share realizing a $5 per share profit excluding commission. In the above situation, the agent has acted
83 out of 100
84.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Under the antifraud provisions of the Uniform Securities Act, agents are prohibited from all of these EXCEPT
84 out of 100
85.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
An order is received from one of your clients to purchase 200 shares of GEMCO common stock at 45 GTC. Two days later, while at a luncheon meeting with a different client, you are informed by that individual that the inside scoop is that GEMCO is going to be the subject of an FBI investigation. An hour after you return from lunch, you see an execution report for the 200 shares at 44.90. Under the Insider Trading and Securities Fraud Enforcement Act of 1988, you
85 out of 100
86.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
The NASAA Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives and Federal Covered Advisers generally prohibits an IA from disclosing any confidential account information without specific consent of the client. However, disclosure would be permitted to
86 out of 100
87.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
James Jones, quarterback for a National Football League franchise team, deliberately misstated material information in the private sale of securities he owned. Jones claims he is not subject to the antifraud provisions of the Uniform Securities Act because he is not a registered agent and, secondly, the securities involved are exempt from registration requirements of the act. Which of the following statements is TRUE?
87 out of 100
88.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
An agent has a client who is relatively new to investing in securities, having been a bank CD purchaser most of her life. One of the client's holdings is a stock that the agent recommended, and its market price has recently fallen by over 10%. Knowing her fear of loss, the agent comforts her by continuing to report that the stock is moving upwards with the market. This action is
88 out of 100
89.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Which of the following would be considered when determining whether excessive trading has occurred in a client's account?
89 out of 100
90.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
The head of research for your firm has just prepared a very positive report on DEF Industries, Inc. The report will be placed on the firm's website later today, and copies will be mailed to clients for whom the security is deemed appropriate. Tonight, this analyst will be appearing on CNBC and will be describing why he has issued this strong buy recommendation. As an investment adviser representative, you would
90 out of 100
91.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Under Rule 206(4)-7, it is unlawful for an investment adviser registered with the Commission to provide investment advice unless the adviser has adopted and implemented written policies and procedures reasonably designed to prevent violation of the Advisers Act by the adviser or any of its supervised persons. Under this rule, investment advisers are required to perform a review of the adequacy of the policies and procedures established pursuant to this section and the effectiveness of their implementation no less frequently than
91 out of 100
92.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Which of the following is NOT a fraudulent business practice when committed by a registered broker-dealer?
92 out of 100
93.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Under the Uniform Securities Act, which of the following statements regarding the use of material facts is TRUE?
93 out of 100
94.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
An agent's customer says that ABC Corporation is about to be bought out. The customer wishes to place an order to buy ABC common stock based upon this yet unreleased information, which he claims he learned from an officer in the company. How should the agent respond in this situation?
94 out of 100
95.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Which of the following is NOT true regarding the Securities Exchange Act of 1934?
95 out of 100
96.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Walt and Bryan are old friends who are agents with different broker-dealers. Bryan attends one of Walt's investment seminars and, at a prearranged point in the presentation, stands up and exclaims that his rich brother-in-law wisely purchased the same investment. This action is
96 out of 100
97.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
A major stockholder of XYZ Corporation makes frequent purchases and sales of this stock on the open market to give the impression that it is actively traded. This unethical practice is best described as
97 out of 100
98.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
NASAA's Statement of Policy on Unethical or Dishonest Business Practices of Broker-Dealers and Agents prohibits excessive activity in the account of a client for the purpose of generating commissions. This activity, frequently called churning, would likely be excused
98 out of 100
99.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
An investment adviser may release confidential information about a client in all of the following instances EXCEPT
99 out of 100
100.
Series 66, Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices,Series 66
Bryan, an agent registered with a broker-dealer, buys 1,000 shares of XYZ Corp. in his own account. In recommending XYZ Corp. to his customers, Bryan informs them that he believes in the company so much that he put his own money in the stock. This practice is
100 out of 100
