Free Series 65 Practice Exam: 15-Question Sample (Original SME-Authored) · ALAN

A.An imminent acceleration in real GDP growthB.Market expectations of slower growth or recession aheadC.A coming reduction in the federal funds rate that will steepen the curve immediatelyD.Rising long-term inflation expectations

A.Consumer Price Index (CPI), all urban consumersB.Core Consumer Price Index (Core CPI)C.Personal Consumption Expenditures price index (PCE), with particular weight on Core PCED.Producer Price Index (PPI) for finished goods

A.Individual security selectionB.Market timing decisionsC.The strategic asset allocation policyD.Manager fees and trading costs

A.Both trade intraday on an exchange at supply-and-demand prices.B.The open-end fund prices once daily at NAV; the closed-end fund trades intraday on an exchange at a market price that may be at a premium or discount to NAV.C.The open-end fund trades on an exchange at NAV continuously; the closed-end fund prices once daily at NAV.D.Both price once daily at NAV calculated after the market closes.

A.ETFs are exempt from the Investment Company Act of 1940.B.ETFs do not distribute dividends to shareholders.C.ETFs use the in-kind creation/redemption mechanism with authorized participants, which can flush out low-basis securities without realizing capital gains at the fund level.D.ETFs are taxed only when sold; mutual funds are taxed annually regardless of trading.

A.Surrender charges typically last 30 days; M&E charges are a one-time front-end load.B.Surrender charges typically follow a declining schedule over six to ten years; M&E charges are an ongoing annual asset-based charge for insurance guarantees.C.Surrender charges apply only to qualified contracts; M&E charges apply only to non-qualified contracts.D.Both surrender charges and M&E charges are paid only at annuitization, not during accumulation.

A.Interest is taxable at both the federal and state level because the investor is not a resident of the issuing state.B.Interest is generally exempt from federal income tax; the state of residence will typically tax the interest because the bond was issued by a different state.C.Interest is exempt from both federal and state income tax regardless of investor residency.D.Interest is taxable federally but exempt at the state level under the doctrine of reciprocal immunity.

A.Both standards require putting the customer's interest ahead of the firm's at all times.B.FINRA suitability requires a fiduciary best-interest standard; IAA fiduciary duty does not.C.IAA fiduciary duty (Section 206) imposes ongoing duties of care and loyalty including disclosure or elimination of conflicts; FINRA suitability requires only that a recommendation be reasonable for the customer based on their profile, with Reg BI layering an additional best-interest standard for retail customers.D.Both standards apply only at the moment a recommendation is made and end thereafter.

A.Aggressive growth, to outpace longevity risk over a 20+ year horizonB.Speculation in small-cap equities, to maximize the chance of recovering any lossesC.Income generation and preservation of capital, with liquidity for healthcare and living expensesD.Tax minimization, given her likely low marginal bracket

A.$6,000 standard; $1,000 catch-upB.$7,000 standard; $1,000 catch-up (so $8,000 total at age 50+)C.$10,000 standard; $2,000 catch-upD.There is no contribution limit for Roth IRAs; only an income phase-out applies

A.Authorization, Bonding, and ComplianceB.Advice (about securities), Business (as a regular activity), and Compensation (in any form)C.Assets under management, Brokerage relationships, and Client countD.Adviser registration, Broker-dealer affiliation, and CFP credentialing

A.Delivery is required only upon client request, no other timing applies.B.Initial delivery must occur no later than entry into the advisory contract; an annual offer must be made thereafter, with delivery when material changes occur.C.Delivery is required only at the time of termination of the advisory relationship.D.Delivery is required quarterly along with each performance report.

A.$25 millionB.$50 millionC.$100 million (with a buffer band up to $110 million for newly crossing advisers)D.$1 billion

A.Denying, suspending, conditioning, limiting, or revoking a registration for cause based on factors enumerated in the ActB.Conducting investigations and compelling testimony under oathC.Issuing cease-and-desist orders, including without a prior hearing in an emergencyD.Imposing criminal prison sentences directly without judicial proceedings

A.Rule 10b-5 is a strict-liability disgorgement rule; Section 16(b) is a fraud-based scienter rule.B.Rule 10b-5 is a broad anti-fraud provision requiring scienter and applies to anyone trading on material nonpublic information in breach of a duty; Section 16(b) is a strict-liability profit-disgorgement rule for short-swing trades by officers, directors, and 10% beneficial owners of a Section 12 issuer.C.Both apply only to officers and directors of public companies.D.Section 16(b) applies to all market participants, while Rule 10b-5 applies only to corporate insiders.

A.Individual security selectionB.Market timing decisionsC.The strategic asset allocation policyD.Manager fees and trading costs

A.$25 millionB.$50 millionC.$100 million (with a buffer band up to $110 million for newly crossing advisers)D.$1 billion

Free Series 65 Practice Exam: 15-Question Sample

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Study on a schedule, not on a feeling.

Free Series 65 Practice Exam: 15-Question Sample

Quick answer

Get the full course

Study on a schedule, not on a feeling.