Series 66

Front 1

if an admin. issues a denial order is it final and binding?

Back 1

NO
court appeals can be done within 60 days after the issue

Front 2

under the USA which securites are exempt?

exempt transactions?

Back 2

A.) govermental and municipal securites

B). underwriter and institution investor transactions

Front 3

under the IA act of 1940:
An investment advisory firm's offices are located in State X.
The IA exclusively services financial institutions such as insurance companies. This IA firm must?

Back 3

register with state X but not with SEC under the advisors act

Front 4

under the IA acout of 1940:
exeptions from registration would include:

Back 4

1). IA's not advising listed secs.
2). insurance co. clients only
3). fewer then 15 clients in last 12 months

Front 5

under 1940- annual updating amendment must be filed with SEC when?
registration with SEC is effective until?

Back 5

90 days after the end of fiscal year

2). effective unless revoked or withdrawn and accepted by SEC

Front 6

under the USA- elements in an investment contract include:

Back 6

investment of money- common enterprise- expectations of profits

Front 7

whole life insurance is permanent insurance and has cash value so BLANK insurance would not be included

Back 7

TERM- its temporary and no cash value

Front 8

a 12b-1 fee?

Back 8

charged by some mutual funds and IA's can receive a portion so that must be disclosed

Front 9

Foward contracts include:

Back 9

(A) The contracting parties directly negotiate the terms of the contract.
(B) The agreed-to price is typically the current market price of the underlying commodity.
(C) The contract is not traded.

note: delivery/settement occurs at a future date

Front 10

CAPM is used to caculate what?

Back 10

expected return

this is used to compare required reture in determining if an investment should be made

Front 11

capital appreciation strategy seeks?

Back 11

maximize cap. app. over long term

Front 12

When analyzing an investment that has continuously increased in value using annualized return

Back 12

the holding period return will equal the annualized return if the investment is held for one year.

Front 13

If you were to invest in a $1,000 Treasury Bond with a 5.5% coupon and you buy the bond at par, holding it to maturity, what will your real rate of return be over the holding period if the CPI is 2% and the IRR is 3%?

Back 13

= 3.5%
why: The real rate of return (aka - the inflation adjusted rate of return) equals the coupon rate of return (5.5% in this case) minus the rate of inflation (CPI = 2%

Front 14

ERISA protects employee retirement funds from

Back 14

poor MGMT by employeers by establishing limitations and guidelines

Front 15

A testamentary trust is

Back 15

is a trust created by a will

Front 16

any investor holding more then 5% of shares in a company must do what?

Back 16

file with the SEC
and form 13-D

Front 17

"S" corporation
unlimtied life

Back 17

100 or fewer shareholders:
flow through to shareholders- taxed in capital gains
-limited liabity

Front 18

"C" corporations
unlimited life

Back 18

taxable entity- must file charter with state
limited liabilty. but double taxed- income to corp. then dividends on S.H.
net loss can be offset by 5 yrs to captial gain
subject to AMT

Front 19

LLCs

Back 19

limited liability- while general partners have unlimited. transfer of ownership is ok with general approval

Front 20

each kids needs 1200 a month and the expected rate is 3%, what amount needs to be set asdie

Back 20

$480,000

.03/12mths=.025
1200/.025= 480,000

Front 21

Net Present Value (NPV)

Back 21

is a method used to evaluate investment that measures all inflow and outflows of cash using an established discount rate. An investment is acceptable if the NPV is positive or greater than zero.

Front 22

IAR's must register to conduct business with an accredited investor- even out of state.. but who would be exempt?

Back 22

investment companies, employee benefit plans, other IA's, mutual funds

Front 23

under the SEC how much must a client have to charge performance-based fees

Back 23

net worth of 1,000,000 or 500,000 under asset management

Front 24

govt securites are the most sensitive to interest rates.

Back 24

zero coupon bonds have the greatest risk also look at long maturites and low coupon rate

Front 25

each kids needs 1200 a month and the expected rate is 3%, what amount needs to be set asdie

Back 25

$480,000

.03/12mths=.025
1200/.025= 480,000

Front 26

Net Present Value (NPV)

Back 26

is a method used to evaluate investment that measures all inflow and outflows of cash using an established discount rate. An investment is acceptable if the NPV is positive or greater than zero.

Front 27

IAR's must register to conduct business with an accredited investor- even out of state.. but who would be exempt?

Back 27

investment companies, employee benefit plans, other IA's, mutual funds

Front 28

under the SEC how much must a client have to charge performance-based fees

Back 28

net worth of 1,000,000 or 500,000 under asset management

Front 29

each kids needs 1200 a month and the expected rate is 3%, what amount needs to be set asdie

Back 29

$480,000

.03/12mths=.025
1200/.025= 480,000

Front 30

each kids needs 1200 a month and the expected rate is 3%, what amount needs to be set asdie

Back 30

$480,000

.03/12mths=.025
1200/.025= 480,000

Front 31

govt securites are the most sensitive to interest rates.

Back 31

zero coupon bonds have the greatest risk also look at long maturites and low coupon rate

Front 32

Net Present Value (NPV)

Back 32

is a method used to evaluate investment that measures all inflow and outflows of cash using an established discount rate. An investment is acceptable if the NPV is positive or greater than zero.

Front 33

Net Present Value (NPV)

Back 33

is a method used to evaluate investment that measures all inflow and outflows of cash using an established discount rate. An investment is acceptable if the NPV is positive or greater than zero.

Front 34

IAR's must register to conduct business with an accredited investor- even out of state.. but who would be exempt?

Back 34

investment companies, employee benefit plans, other IA's, mutual funds

Front 35

IAR's must register to conduct business with an accredited investor- even out of state.. but who would be exempt?

Back 35

investment companies, employee benefit plans, other IA's, mutual funds

Front 36

under the SEC how much must a client have to charge performance-based fees

Back 36

net worth of 1,000,000 or 500,000 under asset management

Front 37

under the SEC how much must a client have to charge performance-based fees

Back 37

net worth of 1,000,000 or 500,000 under asset management

Front 38

govt securites are the most sensitive to interest rates.

Back 38

zero coupon bonds have the greatest risk also look at long maturites and low coupon rate

Front 39

govt securites are the most sensitive to interest rates.

Back 39

zero coupon bonds have the greatest risk also look at long maturites and low coupon rate

Front 40

All of the following are characteristics of variable life insurance plans

Back 40

Minimum death benefits are typically included with variable life insurance policies.
(B) As long as the proper regulations and investment objective guidelines are followed, individuals with variable life insurance plans can place the cash value of the plan in a separate account.
(C) Fluctuations in the returns of investments of the plan are borne by the individual who holds the variable plan.

** cash value will flux.

Front 41

If IAs want to advertise past performance reports they must?
In a sole proprietorship, there is one owner who handles the record-keeping tasks and formalities associated with the business. K-1 forms are used with parnterships and s-corporations, and only corporations will have shareholders and CEOs/CFOs.

Back 41

they offer to provide all recommendations made over at least the last year

Front 42

sole proprietoship means they must handle all records of business

Back 42

In a sole proprietorship, there is one owner who handles the record-keeping tasks and formalities associated with the business. K-1 forms are used with parnterships and s-corporations, and only corporations will have shareholders and CEOs/CFOs.

Front 43

A valuation model utilized to anticipate a portfolio's performance is:
(A) net present value
(B) expected return
(C) internal rate of return
(D) inflation adjusted rate of return

Back 43

(B) expected return

Expected return is used to "anticipate" what a portfolios performance will be in the future whereas 'A' and 'C' measure present value and the portfolio's existing return. Inflation adjusted return compares the return on a security to the current rate of inflation.

Front 44

The interest rate stated on the face of a bond is also known as the
(A) Current yield
(B) Nominal yield
(C) Yield to maturity
(D) Inflation-adjusted yiel

Back 44

coupon rate= interest rate on face of bond AKA nominal rate

Front 45

As stated in the Uniform Securities Act, federal-covered advisers

Back 45

can be required to give notice to Administrators in states in which six or more clients transact business with the federal-covered adviser.
** may be required not ARE

Front 46

discount cash flow methods

Back 46

Discounted cash flow represents the value of future expected cash receipts and expenditures as of a set date and is used when computing net present value and internal rate of return.

Front 47

holding period return

Back 47

Holding period return is another way of saying Total Return.. not discount

Front 48

Which of the following would NOT have an effect on the interest rate that is credited to an equity-indexed annuity contract?
(A) The participation rate related to the index
(B) Margin fees associated with the contract
(C) The payout option selected on the contract
(D) The cap placed on the interest rate credited to the contract

Back 48

=C
FINRA warns investors that "Some EIAs (equity-indexed annuities) allow the insurance company to change participation rates, cap rates, or spread/asset/margin fees." This adversely affects returns for investors. The payout option would not be included in this list.