Pass the Series 65 Test || with Errorless Solutions 100%.
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Course
Series 65 T
Institution
Series 65 T
What is the *3 Pronged Approach*? correct answers Test used by SEC to determine if an entity meets the definition of an investment adviser.
1. Does the Person provide investment advice relating to securities and based on the client's situation?
2. Does the person receive compensation as a resul...
Pass the Series 65 Test || with Errorless Solutions 100%.
What is the *3 Pronged Approach*? correct answers Test used by SEC to determine if an entity
meets the definition of an investment adviser.
1. Does the Person provide investment advice relating to securities and based on the client's
situation?
2. Does the person receive compensation as a result of providing investment advice?
3. Is the person in the business of providing investment advice?
What is a *Form 8-K*? correct answers SEC report required by the Securities Exchange Act of
1934 of public companies announcing unusual material events. A report of unscheduled material
events or corporate changes at a company that could be of importance to the shareholders or the
Securities and Exchange Commission.
What are 5 examples that qualify for a Form 8-k to be filed? correct answers 1. Acquisition
2. Bankruptcy
3. Resignation of directors
4. Loss of major customers
5. Change in the fiscal year. Also known as Form 8k.
What is a *Form 10-K?* correct answers SEC report required by the Securities Exchange act of
1934 annually by public companies to report financial statements over the past fiscal year.
What is a *Form 10-Q"? correct answers Unaudited comprehensive quarterly report that is
mandatory for public companies to disclose performance. Only needs to be filed for the 1st, 2nd,
and 3rd quarter.
When is a *Form 10-Q due?* correct answers Within 45 days of the end of the quarter
What is a *12b-1 Fee*? correct answers A Fee deducted from a mutual fund's assets to cover
distribution and marketing costs. It is an operational expense that is a part of the total expense
ratio.
What is *Rule 72-t?* correct answers An Internal Revenue Service (IRS) rule that allows for
penalty-free withdrawals from an IRA account. The rule requires that, in order for the IRA
owner to take penalty-free early withdrawals, he or she must take at least five "substantially
equal periodic payments" (SEPPs). The amount depends on the IRA owner's life expectancy
calculated with various IRS-approved methods. Allows you to take advantage of your retirement
savings before the age of 59.5, when there is otherwise a 10% penalty on early withdrawal. The
withdrawals, however, are still taxed at your income rate.
What is the drawback to taking advantage of Rule 72-t? correct answers You may deplete your
retirement accounts well before the end of your life expectancy.
,What is the *75-5-10 Rule*? correct answers Diversification formula for a fund advertising itself
as diversified. 75% of the portfolio must have no more than 5% of assets invested in any one
security and no more than 10% of the company's outstanding shares may be owned.
What is a *401(k) Plan?* correct answers Qualified defined contribution plan offering employer-
matched contributions.
What is a *403(b)?* correct answers Qualified plan for tax-exempt, non-profit organizations
What is a *404(c)?* correct answers Safe-harbor provisions allowing employers to pass off risk
to participants of defined contribution plans.
What is a *457 Plan*? correct answers Tax-advantaged retirement accounts for state and
municipal government employees. AKA Section 457 Plan
What is a *529 Plan?* correct answers Education savings plans offering tax-free distributions at
the federal level for qualified education expenses.
What is a *Section 1035 Contract Exchange?* correct answers Section 1035 Exchange refers to
the replacement of an annuity or life insurance policy for a new one without incurring any tax
consequence for the exchange. The following exchanges of insurance contracts are considered
tax-free by the IRS: replacing one annuity contract for another annuity contract with identical
annuitant replacing one life insurance policy for another life insurance policy, endowment policy
or annuity contract replacing one endowment policy for an identical endowment policy or an
annuity contract Any other variation from those acceptable exchanges listed above (annuity
contract for life insurance) will not be considered a tax-free exchange. The IRS has provided
strict guidelines that the owner, insured and annuitant must be the same on the new contract as
listed on the old in order to qualify for the tax-free treatment. The contract must also exchange
directly between the insurance companies to retain the tax-free status. The IRS has ruled in
several previous cases that if an owner cashes out of a current contract and immediately applies
the proceeds to a new contract it will not be treated as a tax-free event or Section 1035
Exchange.
Why does the IRS allows holders of annuity and life insurance policy to use Section 1035
Contract Exchange? correct answers In order to replace outdated contracts with new contracts
with improved benefits, lower fees and different investment options.
What is the 1040EZ? correct answers
1041 correct answers Tax form used by trusts and estates
1065 correct answers Tax form used by partnerships
1099-DIV correct answers Tax form sent to investors showing dividends and capital gains
distributions from a mutual fund for the tax year.
,1099-OID correct answers Tax form used to pay annual accretion on a zero coupon or any
taxable original issue discount (OID) bond
1120 correct answers Tax form used by corporations
A-Shares correct answers Mutual fun shares sold with a front-end sales load/charge. Lower
annual expenses than B and C shares.
Account at Maintenance correct answers The point at which a customers equity in a margin
account is just high enough to avoid a margin call
Account Freeze correct answers Temporary restrictions placed on a customers account for
violations of Regulation T.
Accounts Payable correct answers What a company owes its vendors in the short-term a current
liability
Accounts receivable correct answers What a customer owe a company in the short-term a current
asset.
Account Statement correct answers Document sent to a broker-dealer customer showing the
recent value of all cash and securities, plus all recent activity in the account.
Accredited Investors correct answers Large institutional investors, and individuals meeting
certain income or net worth requirements allowing them to participate in for example a private
placement under Reg D of the Securities Act of 1933 or hedge funds.
Accretion correct answers Increasing the cost basis of a discount bond for tax purposes.
Accrued Interest correct answers The interest that a buyer of a debt security owes the seller.
Bond interest is payable only twice a year, and the buyer will receive the next full interest
payment. Therefore the buyer owes the seller for every day of interest since the last payment up
to the day before the transaction settles.
Accrued Taxes correct answers Taxes that are owed by a company over the short-term a current
liability
Accrued Wages correct answers Wages that are owed by the company over the short-term a
current liability
Accumulation Stage/ Period correct answers Period during which contributions are made to an
annuity during which the investor holds accumulation units.
Accumulation Units correct answers What the purchaser of an annuity receives in exchange for
his purchase payments during the accumulation phase and accounting measure representing a
proportional share of the separate account.
, Active Investor correct answers Investor who feels markets are not perfectly efficient and
therefore selects particulate investments
Ad Valorem correct answers A tax based on the assessed value of real estate or personal
property. Ad valorem taxes can be property tax or even duty on imported items. Property ad
valorem taxes are the major source of revenue for state and municipal governments. Municipal
property ad valorem taxes are also known as "property taxes". The phrase ad valorem is Latin for
"according to value". In the case of municipal property taxes, property owners have their
property assessed on a periodic basis by a public tax assessor. The assessed value of the property
is then used to compute an annual tax, which is levied on the owner by his or her municipality.
Ad valorem taxes are incurred through ownership of an asset, in contrast to transnational taxes,
such as sales taxes, which are incurred only at the time of transaction.
Additional Takedown correct answers The piece of the spread that goes to the various members
of the syndicate when the bonds they've been allotted are sold
Adjustable Rate Preferred Stock correct answers Preferred stock whose dividend is tied to
another rate often the rate paid on a T-Bills
Adjusted Gross Income (AGI) correct answers Earned income plus passive income portfolio
income and capital gains. The amount upon which we pay income tax.
Adjustment Bond correct answers Another name for an income bond on which the issuer may
miss interest payments without going into default.
Administrator correct answers (1) The securities regulator of a particular state; (2) A person
authorized by the courts to oversee and liquidate an estate.
ADR/ADS correct answers Abbreviation for an American Depository Receipt/Share. A foreign
stock on a domestic market. Toyota and Nokia are two example of foreign companies whose
ADRs trade on American Stock Markets dominated in dollars.
Advance Refunding/Pre-Refunding correct answers Issuing new bonds and depositing part of the
proceeds in escrow ahead of the first legal call date on an existing bond issue.
Advance/Decline Ratio correct answers The number of stocks whose market pricing increased
versus the number of stocks whose market prices decreased during a trading session.
Advertising correct answers For investment advisers any written communication delivered to
more than one person
Affiliated Investor Person correct answers Person who is an officer or director of the issuer or a
10%+ owner of its common stock.
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