Series 65 Practice Exam

These questions are part of the practice quiz. Start practicing

• When are taxes on interest, dividends, and capital gains in an annuity paid?
• Isolated non-issuer transactions typically involve securities professionals?
• What assumption does the Dividend Growth Model make about dividends?
• What does common stock represent?
• Which statement best describes what fundamental analysts evaluate?
• No 70 1/2 restrictions means what for required minimum distributions?
• Which of the following is an exempted transaction under the Securities Act of 1933?
• If two bonds have the same duration, higher convexity offers what?
• Money market is defined as the market for buying and selling what?
• Under the described margin requirements, what percentage of the purchase must be paid in cash?
• Securities that are not eligible for another method and are sold in one state are typically registered by which method?
• In liquidation priority, which group is paid third?
• Developed Markets are defined as which of the following?
• In liquidation priority, which class is paid first?
• Which of the following is NOT listed as a risk to investors in Mortgage Backed Securities?
• Which rating would be considered investment-grade?
• Which statement accurately describes Non-qualified Stock Options (NQSOs) tax treatment?
• Under Rule 506(c), advertising is permitted provided what condition is met?
• Advance/Decline Theory measures market breadth by analyzing:
• Which of the following statements correctly describes a Certificate of Deposit (CD)?
• For variable annuities and mutual funds, voting rights are allocated as one vote per unit or share.
• Which statement about Unit Investment Trusts (UITs) is true?
• Rule 12b-1 relates to which aspect of mutual funds?
• What is a deferred annuity?
• Client referrals between an IA and a BD must be disclosed and the services rendered must be provided for a cost that is what?
• The exclusion ratio is defined as the percentage of what?
• During a rights offering, rights themselves trade in the secondary market during the subscription period. True or false?
• How often is the cash value calculated?
• Treasury Notes are characterized by:
• What is a defining feature of annuity contracts?
• Which instrument is considered a security among the following?
• Which statement is true about Class B fund shares?
• ADRs are bought and sold in the U.S. securities market like which of the following?
• Which of the following is included in the IPO registration in relation to key personnel and holders?
• Within how many days must a Schedule 13D be filed after exceeding 5% beneficial ownership?
• Treasury Bonds are:
• Which description best defines an investment adviser under federal law?
• Which registration method becomes effective at the same time as the federal registration when coordinating with the federal government?
• Which statement best describes secured debt securities?
• A money market fund's investments must have a rating in one of the two highest short-term rating categories. Which statement best describes this requirement?
• To sell control stock or restricted stock, which form must be filed?
• Under the Securities Exchange Act of 1934, broker-dealers must maintain what to satisfy financial responsibility rules?
• During the Cooling Off Period, which activity is allowed?
• Convexity is defined as what?
• Under Exempt Securities, which category includes depository institutions such as banks and savings institutions?
• Which item relates to underwriter compensation in the IPO registration?
• Which statement best defines technical analysis?
• Which statement about Rule 147 is true?
• Under State Securities Registration Procedures, ongoing reports to the administrator cannot be required more often than…
• Which seven order ticket element records the price at which the order was executed?
• A registered securities exchange must be registered with the SEC, and the application is reviewed in how many days?
• Revenue Bonds are secured by:
• Brady Bonds are debt instruments, generally from third world countries, that may have a US Treasury bond as collateral.
• What is the renewal date for all registrations, and is proration allowed?
• Which statement about variable annuities is correct?
• If a small adviser with less than 25 million AUM would be required to register in 15 or more states, they would register with the:
• Under Dodd-Frank exemptions, pension consultants who control at least how much assets under management must register with the SEC?
• An adviser may sell securities to its clients from its own proprietary account with consent of the client before completion of the trade. This is allowed under what condition?
• For government bonds, a quote of 90.8 translates to a dollar price per bond of what?
• The payout period for an annuity is known as the?
• Breakout is defined as the movement of a stock price:
• Under Exempt Securities, which category includes securities of employee benefit plans?
• Under Registration by Qualification, when must a prospectus be sent or given to each person to whom an offer is made?
• ADRs are registered on the books of which entity responsible for them?
• Subordinated debt is best described as:
• Which action may the SEC take to obtain an injunction enjoining a person from continued activity until the results of a hearing?
• Variable life insurance can be exchanged for permanent insurance with comparable benefits within 24 months.
• Directed Brokerage occurs when an IA suggests trades go through a specific BD; what must be disclosed?
• Before an agent is registered, they may perform only clerical work.
• Under Consent to Service of Process, who is designated to receive and process noncriminal securities-related complaints against the applicant?
• High-yield bonds are also known as which of the following?
• Moving average is used to:
• Money market instruments are typically issued at a discount and pay no periodic interest.
• Country risk is best described as what?
• Which item would NOT fall under soft-dollar compensation safe harbor?
• Registration of an investment company with the SEC must be made under which acts?
• Which item is NOT considered part of Technical Market Theory as described?
• Before age 59.5, what is the penalty on the taxable portion of withdrawals?
• What is a Letter of Intent (LOI) in mutual fund purchases?
• For a bond issued at a premium, the order of yields from highest to lowest is:
• After the decision to annuitize, the specified payout option is typically not changeable. True or False?
• What lifetime feature do variable annuities provide?
• Who is considered a person associated with an investment adviser?
• U.S. Treasury securities offer which advantages?
• Under the registration thresholds, which size category applies to an investment adviser with 25 to 100 million dollars in assets under management?
• Which order ticket element identifies who accepted the order?
• What is the maximum remaining maturity for securities in money market funds?
• For open-end funds, how are investors redeemed when they sell their shares?
• Which option pays for life and guarantees payments to a beneficiary if death occurs before a specified period?
• Investment Adviser Representatives are always individuals.
• For all three state registration methods, how long does the registration statement remain effective from its effective date?
• The longer a bond's maturity, the more its value will change for a 1% change in interest rates.
• Which fee corresponds to the investment management fee deducted from the separate accounts?
• Under USA exemptions, which of the following client categories would qualify an adviser with no place of business in the state for exemption?
• Distributions to beneficiaries are taxed as what?
• Transactions with existing securities holders are exempt if which condition is met?
• Which statement best defines a prospectus?
• Under Exempt Securities, which category explicitly includes money market instruments?
• Under state law, which entity is excluded from the definition of investment adviser?
• Which of the following is NOT an advantage of investing in foreign bonds?
• Ginnie Mae certificates are known as:
• Exclusions from the Definition of Agent for Personnel Representing Issuers include which of the following?
• Under federal law, which entity is excluded from the definition of investment adviser?
• A wash trade is a prohibited practice in which a trader does what?
• Which provision allows tax-free transfer between annuities?
• What is the minimum percentage of cash value that must be available for a policy loan after the loan has been in force for three years?
• What does the quotation DEF5s35@106 indicate about the bond?
• The period during which an annuitant makes contributions to an annuity contract is called?
• In a variable annuity, what does an accumulation unit represent during the accumulation period?
• Which fee represents the mortality risk (the cost of insurance) deducted from the separate accounts?
• Investment advisers are expected to be eligible for SEC registration within how many days?
• Which statement best defines an Investment Company?
• Restricted securities are securities purchased in a private placement that are:
• In corporate or municipal bond pricing, how much is one price point worth?
• Which statement about ETNs is true?
• A mortgage bond is backed by:
• Which signatures are required on the registration statement for an IPO?
• Which description applies to the Private Fund Advisors exemption regarding assets under management?
• Under Timely Prospectus Delivery for Registration by Coordination, when must a prospectus be delivered to each person to whom an offer is made?
• How frequently are the cash values of the separate accounts calculated?
• What does the Dividend Discount Model assert about stock value?
• Odd-lot trading refers to:
• Whole life insurance is characterized by which statement?
• Which of the following is NOT exempt under the Securities Act of 1933?
• Under Rule 501, which of the following qualifies as an accredited investor?
• Which type of investment company issues face-amount certificates and promises to pay a stated sum at a fixed date more than 24 months from issuance, possibly with periodic installments?
• Which of the following is included as an investment company under the Investment Company Act of 1940?
• TIPS are designed to protect against purchasing power risk by:
• Which of the following describes the basis for Yield to Maturity calculation?
• Which condition would make a security eligible for exemption under Pre-organization certificates?
• Commercial banks are excluded from the broker-dealer definition unless they deal with selling securities.
• Churning is best described as which practice?
• Which annuity option will be paid out until the full value of the principal is returned?
• Exempt transactions for agents include which of the following?
• Stock dividends are excluded from the definition of sale and offer.
• Under which condition must an investment adviser withdraw from SEC registration within 180 days?
• A long-term bond that is not secured by a mortgage on specific property is called:
• Index annuities typically credit interest based on what and include which features?
• Which of the following is an advantage of variable annuities?
• Under Consent to Service of Process, who is designated to receive and process noncriminal securities-related complaints against the applicant?
• How are REIT distributions taxed?
• An immediate annuity is typically funded with a lump sum and provides payments immediately.
• Mortality Guarantee in an annuity payout implies which of the following?
• Which feature allows the issuer to retire the preferred stock when interest rates decline?
• How is NAV calculated for a mutual fund?
• Who is responsible for registering municipal securities dealers with the Securities and Exchange Commission?
• Who typically holds the shares for ADRs?
• What remedy may a seller offer if a sale is found to have been made in violation of the USA?
• Which type of preferred stock accrues dividends in arrears?
• Short interest is best described as what?
• Schedule G filings are designed to ease beneficial ownership requirements for which group?
• A debt instrument guaranteed by an entity other than the issuer is called:
• A loan against cash value reduces the death benefit by the amount of the loan.
• Foreign bonds are bonds sold in a foreign country and denominated in that country's currency.
• Most of the mortgages included in CMOs are private mortgages not qualified under VA or FHA.
• Which feature allows conversion of preferred stock into the issuer's common stock?
• Aside from when acting summarily, which requirements must be satisfied before an order to deny, suspend, or revoke may be entered?
• Which conditions make a preorganization subscription exempt from registration?
• What describes an Adjustable Rate preferred stock?
• Emerging Markets are associated with which description?
• A holder exceeding 5% beneficial ownership must file a Schedule 13D report with which entities within 10 days of the transaction?
• Tax Equivalent Yield is defined as
• Duration is basically a measurement of what?
• Treasury Bills are:
• Which of the following is a valid accredited investor criterion?
• How is a mutual fund's public offering price (POP) determined?
• Which payout option provides periodic payments for the annuitant's lifetime with no guaranteed payments beyond death?
• Regarding ADR dividends, what do the banks do for U.S. owners?
• Limited Offering Transactions are directed at not more than how many persons during the previous 12 consecutive months?
• NASAA allows use of oral discretion for the first how many business days after the date of the first transaction?
• What is the typical maturity for money market instruments?
• Which statement is true about Notice Filing?
• Which entities are excluded from the definition of broker-dealer?
• Which combination of elements describes a security according to the standard definition?
• How are annuity contributions taxed?
• The insurer is never required to loan 100% of the cash value.
• Form 13F filings include exchange funds but not which of the following?
• Which security grants its holder a prior claim to the issuer's assets in liquidation?
• Who issues warrants?
• When comparing two bonds with the same duration, the one with higher convexity will show what when yields fall?
• The cash values for the separate accounts are calculated daily.
• Which form must be filed to sell control stock or restricted stock?
• Agent's Registration Requirements specify filing Form U-4.
• Which item is included in the IPO registration statement?
• For a bond issued at a discount, the order of yields from highest to lowest is:
• Which of the following is NOT a category of Federal Covered Securities?
• All else equal, how does coupon rate affect duration?
• Technical analysis relies on comparing the present price trend to prior trends and uses price charts to identify potential moves. Choose the best description:
• What is the primary purpose of preemptive rights?
• When does a registration take effect?
• Under state law, which item is an exclusion from the definition of investment adviser?
• What is the primary function of American Depository Receipts (ADRs)?
• Matched Orders refer to which type of manipulation?
• For warrants, the exercise price is typically set at a price that is
• Under the 28(e) safe harbor, which item would clearly fall under soft-dollar compensation?
• Term Insurance characteristics: Which statement is true?
• Universal life policy is described as?
• General Obligation Bonds differ from Revenue Bonds in that GO Bonds are secured by which source?
• Call protection is defined as the number of years into the issue before the issuer may exercise a call provision.
• Which statement about exclusions from the Investment Advisers Act of 1940 is true for state law purposes?
• Municipal bond interest is generally tax-exempt at the federal level, and if the investor resides in the issuer's state, is also exempt from state taxes. Which statement best reflects this?
• Which is included in the application for 1934 Act registration?
• Which entity under the 1934 Act requires registration with the SEC and is granted 90 days to accept or deny?
• Under the Investment Company Act of 1940, investment companies engaged in interstate commerce must do what?
• Which statement about Closed End investment companies is true?
• Under Regulation D Rule 506, which statement is true for 506(b)?
• Which statement about Open-End Funds is true?
• Which entity is NOT included in the definition of an investment company under the act?
• Which describes the cash-flow sequencing of CMOs?
• Which statement best defines a fiduciary?
• A Convertible Bond is
• General Obligation Bonds are secured by:
• The difference between the option price and the fair market value on the exercise date for an ISO is treated as what for AMT purposes?
• For a zero-coupon bond, which statement about duration is true?
• What best describes a broker-dealer?
• Collateralized Mortgage Obligations (CMOs) are collateralized by mortgages or mortgage-backed securities and have a stated maturity; principal payments are directed to the newest maturity.
• Nonissuer transactions by pledges are categorized as exempt transactions under USA.
• Rule 3(c)(1) concerns which scenario?
• Under the Insider Trading and Securities Fraud Enforcement Act of 1988, damages recovered in enforcement actions can be:
• Which statement correctly contrasts non-qualified stock options with incentive stock options?
• Under the 1934 Act, which entities are covered by registration for brokers/dealers?
• In money market funds, what must the front cover state?
• What is the primary purpose of having multiple tranches in a collateralized mortgage obligation?
• Which of the following is not an action that the administrator may take?
• Investment Adviser is defined as which of the following?
• Yield spread is defined as the difference in yield between a credit-risky bond and a credit-risk-free bond of similar maturity.
• Which federal legislation established the Municipal Securities Rulemaking Board (MSRB)?
• Which describes an exemption from registration under federal law for Intrastate Advisors?
• In the High-Water Mark method for index annuities, what value is compared to the beginning-of-year value?
• International funds versus Global funds: which is correct?
• Operating Expenses Guarantee provides which protection?
• What does investment discretion include?
• Which item is listed as a security in the general definition of securities?
• The coupon rate represents what the investor earns as the return on what?
• The Form 13F filing threshold is triggered when a fund's holdings exceed how much in value?
• What is the statute of limitations for civil provisions of the USA?
• How often are death benefits calculated?
• For a bond issued at a discount, which yield is typically the highest?
• A debenture is defined as:
• For zero-coupon bonds, the duration equals what?
• Net capital requirements for broker-dealers in a state follow federal rules and may require surety bonds.
• Under Dodd-Frank exemptions, pension consultants who control at least 200 million in AUM must register with the SEC. This reflects which threshold category?
• Rule 147 intrastate offering is characterized by which statement?
• Random withdrawals on an annuity are taxed under which method?
• Under federal law, which is excluded from the definition of investment adviser when advising only direct obligations guaranteed by the US or government-sponsored entities?
• Which statement is correct regarding the regulatory registration of ETNs and ETFs?
• Any portion of distributions exceeding the cost basis is taxed as what?
• Freddie Mac Participation Certificates comprise qualifying FHLMC conventional residential mortgages on single-family homes.
• Lump sum withdrawals are taxed using which method?
• What is the focus of technical analysts?
• Can a broker-dealer act as both broker (agent) and dealer (principal) in the same transaction?
• Which issuer is known for issuing mortgage-backed bonds that can be purchased by investors?
• What is the role of a separate account in variable annuities?
• Voting Client Securities: Form ADV Part 2A requires disclosure of voting procedures if the adviser has authority to vote. If the adviser does not have authority, what must be disclosed?
• Which mortgage-backed security is not backed by the full faith and credit of the US government?
• Which statement best describes the benefit of Mortgage Backed Securities compared with other debt securities of similar credit ratings?
• Which item is NOT one of the seven required order ticket elements?
• Under the USA exemption, an investment adviser with no place of business in the state is exempt if the only clients are five or fewer residents in the state during the preceding 12 months. Which option best describes this condition?
• What is Forward Pricing in mutual funds?
• Warrants are typically what in terms of duration?
• Which option is NOT an exclusion from the federal definition of an investment adviser?
• Which risk is specifically associated with Mortgage Backed Securities due to homeowners refinancing or making early payments?
• Asset-backed pass-through securities are debt obligations backed by a pool of mortgages.
• Which statement describes the schedule of calculation frequencies for death benefits, cash value, and separate account cash values?
• Broker-dealers normally must register with which entities?
• To qualify for the maximum 8.5% sales charge, a fund must offer which two features, and how may LOI be used?
• Section 16 filings require which individuals to file transaction reports for insider trades?
• Indenture is defined as:
• Annuitizing refers to which action?
• Stock funds categories: which range defines Small Cap funds?
• If a fund's 12b-1 fee exceeds 0.25%, which term may not be used?
• Which statement correctly describes tax treatment of different bonds?
• Fundamental analysis studies what?
• In a variable annuity, payments fluctuate based on the account invested primarily in what assets?
• Which statement about a rights offering is true?
• Under the Exchange Act, which of the following is generally considered an insider?
• Under escrow provisions, the administrator may require the security to be placed in escrow if the security was issued within the past three years to whom?
• If the insured dies with a loan outstanding, the death benefit is reduced by the loan amount.
• What is true about maturity and duration?
• In the USA, what is the maximum suspension time the SEC can impose?
• What does the Annual Reset method do in index annuities?
• Which statement describes Open-End investment companies?
• What records must be preserved by a broker-dealer after registration, and for how long?
• What is the maximum permissible 12b-1 fee for a mutual fund?
• State registration by qualification is a process that allows a security to be sold in a state. Which statement is true?
• Which item is listed as part of the 1934 Act registration application process?
• How are dividends and capital gains taxed for qualified dividends and long-term capital gains?
• Voting rights for variable life insurance are allocated as one vote per what amount of cash value?
• FINRA permits an additional service fee on top of the 12b-1 fee up to how much?
• Clerical staff are excluded from the definition of Agent unless they perform security-related functions.
• For fixed annuities, who bears the investment risk?
• Under Regulation D, the issuer must file Form D no later than how many days after final sale?
• Under Exempt Securities, which category includes securities issued by nonprofit organizations?
• Eurodollar bonds are dollar-denominated bonds sold outside the United States.
• In a variable annuity, the Assumed Interest Rate (AIR) is defined as the rate of growth used to determine payout.
• Which fee is described as the expense risk fee that is charged against the separate accounts?
• Breakpoint sales are prohibited when brokers attempt to earn higher commissions by selling shares just below the breakpoint.
• What does a breakpoint in mutual funds relate to?
• An agent's registration is not effective during any period when the agent is not associated with a broker-dealer registered within the same state.
• Which description best captures the statute of limitations for criminal offenses under the USA, including penalties?
• What describes the support level in stock price charts?
• For Treasury Inflation-Protected Securities, the real rate of return is equal to which of the following?
• Private Fund Adviser Exemption Under State Law requires that all investors must be qualified with 1 million in assets managed or 2 million net worth not primary residence. Which statement reflects this requirement?
• Eurobond is a bond issued outside the country in whose currency it is denominated.
• Which statement accurately describes Incentive Stock Options (ISOs) tax treatment, including AMT considerations?
• Which statement best describes an accredited investor by assets test?
• Which type of annuity allows investments over time and defers benefit payments until a date selected by the annuitant?
• A Federal Covered Investment Advisor is defined by which condition?
• A cease-and-desist order is used to stop a person from violating securities laws.
• For coupon bonds, duration is usually what in relation to maturity?
• Which statement defines a control person?
• Which option covers two or more lives with payments conditioned on both lives?
• Which statement about secured debt securities is true?
• A broker-dealer with no office in a state and exclusively dealing with issuers would be excluded from the definition of broker-dealer.