The Uniform Combined State Law Examination is beter known as the Series 66 Exam. It was designed for candidates that need to register in certain states as investment adviser representatives or as securities agents. The test was developed by NASAA, and is administered by FINRA. Working through Series 66 sample questions is great for test prep. Start now with our free Series 66 practice exam.
Series 66 Practice Questions
The NSMI Act of 1996 set forth for the first time a set of criteria by which to differentiate IA registration responsibilities. Choose from the below the most accurate statement describing these impact of these criteria.
I. AUM is the most significant of the differentiating criteria.
II. An IA filing Form ADV showing expected aggregate client portfolio assets in excess of $100,000,000 will register with the SEC.
III. An IA filing Form ADV showing expected aggregate client portfolio assets in excess of $30,000,000 will register with the SEC.
IV. Performance-based IA fee structures are no longer permitted absent special dispensation from the appropriate regulatory agency.
I and II
I and III
III and IV
The principal difference between a listed REIT and an unlisted REIT is:
the liquidity to the investor
the suitability standards applied to investors
the regulatory scrutiny
all of the above are key differences
The phase of the business cycle immediately preceding recovery is:
When the long end of the yield curve is yielding a similar return to the intermediate and short end of the curve, analysts describe this as a:
normal yield curve
positive yield curve
inverted yield curve
flat yield curve
Variable life insurance has a number of similarities to the variable annuity. Among those would be:
guaranteed cash value
tax free proceeds to beneficiary upon death of the insured
money deposited into a separate account
all of the above
Under the USA, when an Administrator wishes to conduct an inspection of an office of a broker-dealer or IA,
he may do so without prior notice
he is required to give at least 5 business days advance notification
he is required to give at least 3 business days advance notification
none of the above
Under the Investment Advisor Act of 1940, exclusions from the definition of investment adviser include:
all of these
The Brochure Rule applies to:
all business entities operating as registered investment advisers
all broker-dealers with the exception of sole proprietorships
both A and B
neither A nor B
When an IA fills a client order to buy as principal:
this is permitted.
this is permitted so long as the client is provided with full disclosure.
this is permitted only with consent from the Administrator.
this is considered a violation of state and/or federal law.
If the projected return of a portfolio is that over the next 12 months, there is a 40% likelihood it will return 15%, there is a 30% likelihood it will return 8%, and there is a 30% likelihood it will return minus 5%, what is the expected return of this portfolio over the next 12 months?
Not enough information to determine
15% return times 40% chance = 6.0%
8% return times 30% chance = 2.4%
Negative 5% return times 30% change = 1.5% loss
Add them up and you get 6.0 + 2.4 − 1.5 = 6.9%
When looking at an investment grade debt instrument with a 15 year maturity, the risk to which it has the greatest exposure in the early years of holding the investment is:
interest rate risk
Which of the below are not considered securities?
Equity indexed annuities
Whiskey warehouse receipts
All of the above
When a bank liquidates securities that have been hypothecated as loan collateral due to a default by the borrower:
it qualifies as an exempt transaction under the USA
it is not considered a sale under the USA
it is an exempt transaction under the USA only if the collateral is an exempt security under the USA
the bank would have to be registered as a broker/dealer in order to effect this liquidation of collateral in the form of securities.
Each of the following entities may claim an exclusion from being defined as an investment adviser with the exception of:
certified public accountant specializing in auditing publicly traded corporations
a public school employee
As interest rates rise, which of the below is least likely to decline in value?
Aaa-rated GO bond
NYSE listed corporation’s convertible bond
Financial service businesses, including but not limited to broker-dealers and investment advisory firms, are required to have in place disaster and other significant negative event plans in place to at least in part, enable communications with customers, regulators, vendors, and employees. Collectively these plans are referred to by the regulatory authorities as:
event readiness plans
business continuity plans
data back-up and emergency contact plans
Certain of the self regulatory authorities require periodic disclosure of political contributions made by investment professionals to the campaigns of candidates seeking election to positions of influence over the allocation of federal, state and/or local financial business, including securities underwriting business.
When such contributions are made, which of the following statements is accurate?
I. Disclosure is only required if the contributions exceed a minimum dollar level.
II. Disclosure to the regulatory authorities is required on a quarterly basis at a minimum.
III. The dollar limits place upon such contributions is a per election standard, not an annual standard.
IV. Any individual making contributions without providing his or her firm disclosure is considered statutorily disqualified from being an RR or an IAR for a minimum of 10 years after the violation.
all of the above
I and III
II and IV
II and III
Regulation S-P allows financial industry firms to obtain personal private information about customer/clients in all the following ways except:
credit reporting agencies
No agent or IAR may represent his or her professional credentials as including any form of ‘senior’ specialization or certification absent:
evidence that such a senior designation is bona fide and approved by a principal of the firm
the designation appearing on an approved SEC or State list
the representative having taken and passed the so-called Baby Boomer credentialing course given by AARP and other similar organizations
all of the above
An IA client of yours is CEO of a publicly-traded corporation. Among the rules with which you need to be familiar when servicing clients such as this include each of the below except:
13D is filed when a certain level of beneficial ownership is attained; Form 4 is filed when any change in beneficial ownership takes place; Rule 144 is filed when control stock is sold by an officer of the firm — all three can impact a CEO.
Series 66 Study Material
- Series 66 Study Guides – An overview of the best Series 66 study guides.
- Series 65 Practice Exam
Series 66 Exam
On the FINRA Series 66 Exam there are 110 multiple choice questions. Only 100 of these questions are scored, and the other 10 are pretest questions that may be used on future exams. You will be given 150 minutes to answer all of these questions. To get your Series 66 license you will need to get a passing test score, which is 75%.
This is a closed book exam and you will be provided only with scratch paper and a basic electronic calculator. You are not allowed to bring in any outside notes, books, or calculators. Scores are provided immediately after you finish your test. No prerequisites are needed to take this exam, but you will need to pass the Series 7 before you can register with a state.
Here are the topics covered along with the percentage of questions on each topic:
- Economic Factors and Business Information (5%)
- Investment Vehicle Characteristics (15%)
- Client Investment Recommendations and Strategies (30%)
- Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices (50%)
For a complete outline of each topic, you can review the Exam Specifications Outline that is published by NASAA.
This is a hard test, so you will want to spend a lot of time on your Series 66 exam prep. Working through sample questions and carefully reading the explanations is a great way to learn this material. Start your test prep right now with our free Series 66 practice questions.