Series 65 Study Questions || All Answered Correctly.
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Course
Series 65 Study
Institution
Series 65 Study
Efficient market hypothesis states that
a. markets are efficient because of immediate information availability
b. transaction costs are competitive due to the volume of brokers/dealers
c. trade costs are nominal due to automated systems and redundant information delivery
d. markets are efficien...
Series 65 Study Questions || All Answered Correctly.
Efficient market hypothesis states that
a. markets are efficient because of immediate information availability
b. transaction costs are competitive due to the volume of brokers/dealers
c. trade costs are nominal due to automated systems and redundant information delivery
d. markets are efficient with respect to value and pricing correct answers d
After extensive research, an agent found a great mutual fund investment for a customer who is
also the agent's partner in a real estate business. The customer has $22,000 to invest and the fund
has a breakpoint at $25,000. The agent lends the customer $3,000 so he can reach the breakpoint.
Which of the following statements is true?
a. it is not permissible for the agent to lend money to the customer; however, he can recommend
that the customer purchase a portion of the fund on margin to reach the breakpoint
b. it is permissible for the agent to suggest that the customer sign a letter of intent if the customer
thinks he'll have additional funds available to reach the breakpoint in the next 24 months
c. it is a violation for an agent to lend money to the customer for the purchase of securities
because the customer is not an immediate family member or an agent with the same b/d
d. it is permissible to lend money to the correct answers c
Which types of variable annuities use accumulation units to track the owner's interest in the
separate account?
I. Immediate annuity
II. Single premium deferred annuity
III. Periodic payment deferred annuity
IV. Index annuity
a. I and II
b. I and IV
c. II and III
d. II and IV correct answers c
One of the biggest differences between a C corporation and a Subchapter S corporation is that
a. C corporation owners have limited liability; Sub S owners have unlimited liability
b. C corporations are not subject to double taxation
c. a C corporation is ongoing and a Sub S corporation has a predetermined liquidation date
d. Sub S corporation earnings and expenses are reported on form K1 correct answers d
What form of advertising is permissible for a b/d but not for an investment adviser?
a. word of mouth
b. billboard
c. testimonials
d. newspaper ad correct answers c
Annualized return may be overstated or understated if
a. NPV is understated
,b. the period that is measured contains seasonal extremes
c. the assumed hurdle rate is overstated
d. the risk-free rate of return is inaccurate correct answers b
Which of the following bonds is affected by the price of the common stock?
a. guaranteed bond
b. convertible bond
c. surety bond
d. income bond correct answers b
A Canadian b/d has a client who relocated to California. The client has a tax-qualified account.
To transact business in California, the b/d must meet which of the following requirements?
I. Register with the SEC, FINRA, and the California state administrator
II. Be in good standing with Canadian SROs
III. Submit a Consent to Process to the California State Administrator
IV. Only transact business in the client's tax-qualified account
a. II and IV
b. II, III, and IV
c. I, II, and III
d. I and IV correct answers b
An Investment Advisory Brochure
a. must be preceded or accompanied by a current prospectus
b. must disclose all material information to a prospective client
c. may be used in lieu of an advisory contract only if accompanied by a current prospectus
d. may be used in lieu of a prospectus only with sophisticated investors correct answers b
If the prime interest rate increases, bond prices will generally
a. decrease
b. remain the same
c. move in parity with the prime rate
d. increase correct answers a
Harry's customer is purchasing 300 shares of the PDQ growth fund. Harry sends the purchase
application directly to the fund, so that he can collect the entire sales load rather than splitting it
with his employer, Harry
a. must ensure that his customer receives the prospectus and statement of additional information
upon request
b. is guilty of selling away, a violation of the USA
c. has violated FINRA's uniform practice codes
d. will receive a 1099 from the fund, and must report the income on his taxes correct answers b
Which of the following is NOT subject to the short-swing profit rule?
a. an owner of 15% of the outstanding shares
b. a director serving on the board of a public com
, c. an investor with a net worth in excess of $5 million (exclusive of primary residence)
d. the CEO of a publicly traded corporation correct answers c
An investor purchases 10 bonds with a coupon rate of 6 percent. How much will the investor
receive at maturity?
a. $1030
b. $1060
c. $10,300
d. $10,600 correct answers c
An engineering report would be used for which of the following?
a. general obligation bond
b. hospital revenue bond
c. school bond
d. project note correct answers b
Common methods of minimizing one's estate value and the subsequent taxation on the estate are
I. Making nontaxable gifts
II. Establishing irrevocable trusts
III. Transferring assets into individual retirement accounts
IV. Establishing nontaxable annuity contracts correct answers a
An investor is interested in an income fund. The fund he selects is likely to have a portfolio that
consists of
a. growth company securities that consistently earn above-average income
b. growth
c. A+ rated securities
d. high-yield corporate securities correct answers d
Which of the following is not a current financial benefit of owning mutual fund shares?
a. portfolio realized profits
b. quarterly dividend
c. portfolio unrealized profits
d. annual capital gain correct answers c
An investor places $10,000 into a mutual fund which reinvests dividends and capital gains. After
12 months, the investor's fund has a value of $12,000. If inflation during the period was 3%,
what was the investor's real rate of return for the year?
a. 17%
b. 20%
c. 23%
d. 12% correct answers a
The Federal Reserve Board is purchasing securities through open market operations. What are
the likely effects of these transactions?
a. bond prices increasing, yields increasing
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