Series 66 final

Hypothecation Agreement

1. The loan from the BD to the client with the client's securities used as collateral. 2. The loan from a bank to the BD with the client's securities used as collateral for the BD's loan.

B- Closed-end funds' share prices can differ significantly from their NAVs. Open-end fund shares are purchased and redeemed based on their NAVs. Market forces keep exchange-traded fund share prices close to their NAVs because arbitrageurs can profit by trading when there are differences.

A pooled investment with a share price generally different from its net asset value (NAV) per share is most likely A an index fund B an exchange-traded fund. C. an open-end fund D a closed-end fund

B- The primary source for the information necessary to construct a cash flow statement is the company's income statement. In a similar fashion, if an investment adviser wants to determine a client's cash flow, you would help the client prepare an income statement and work from that. Although the balance sheet shows cash on hand, that is only at that moment in time and doesn't indicate the "flow" in and out.

A securities analyst wishing to determine the cash flow for the Lucre Bread Manufacturing Company would find the necessary information on the company's A balance sheet. B income statement. C property tax return. D capitalization statement.

A- Securities issued by Canadian governmental entities, such as the federal government or the provincial governments and their municipalities, are exempt from registration under the USA in the same fashion as U.S. government and municipal securities. However, Canadian corporate issuers do not enjoy an exemption unless qualifying under special conditions, such as being listed on the NYSE or Nasdaq and, therefore, are a federal covered security. Investment companies registered under the Investment Company Act of 1940, regardless of where they trade, are exempt from registration because they are federal covered securities.

All of the following are exempt from the registration requirements of the USA EXCEPT Astock issued by a Canadian company that provides actuarial services to insurance companies Ba registered open-end investment company whose portfolio consists exclusively of Georgia municipal bonds Ca Canadian Government bond Da closed-end investment company registered under the Investment Company Act of 1940, but not traded on a recognized stock exchange

I and III- An Administrator may deny the registration of a security when the activity to be conducted in the state is illegal. The underwriter's compensation may not be unreasonable. There is no requirement that dividends be paid in order to register a security.

An Administrator could use which of the following as a reason for issuing an order denying the registration of a security? I. The issuer's enterprise or method of business includes or would include activities that, although legal in the state of incorporation, are illegal in the Administrator's state. II. The company has not been paying dividends. III. The offering would be made with unreasonable amounts of underwriters' and sellers' discounts.

Investment Advisor `

An _______may only borrow from a client that is in the business of loaning money, such as a bank or a broker-dealer, or a client that is affiliated with the investment adviser.

All of them- In the event of a disciplinary action, an Administrator must provide appropriate prior notice, an opportunity for a hearing, and written findings of facts and conclusions of law. Even if an order is issued summarily (made effective upon issue without prior notice), a registrant must be notified upon issue of the order and must be given the opportunity to request a hearing.

Disciplinary proceedings under the Uniform Securities Act require the Administrator to provide which of the following? I. An opportunity for a hearing II. Written findings of facts and conclusions of law III. Appropriate prior notice

I and III- ERISA rules only apply to private sector plans. Government or public sector plans are not subject to the Employees Retirement Income Security Act of 1974.

ERISA regulation does not apply to I. public school district retirement plans II. publicly traded utility company retirement plans III. federal government employee retirement plans

B- An investor's realized holding period return is the total return received over the specified holding period. That return includes any income plus or minus any realized gain or loss. That is why paper gains or losses, which are not realized, are not part of the computation.

In order to compute a client's realized holding period return, it is NOT necessary to know A the income received B the paper profits and losses C the original investment D the ending value

D- It is common for independent financial planners to establish their own business entity and "hang" their registration as an IAR with another firm (as is the case in this question). The rules emphasize that these independent contractors are under the supervision of the carrying firm's CCO in the same way that in-house IARs are.

John Law is the owner of Mississippi Advisory Services (MAS), an independent financial planning organization. Law is registered as an investment adviser representative of SSC Securities and Investments, registered as a broker-dealer, and an investment adviser with the SEC. Supervision over Law's advisory activities is the responsibility of A MAS's CCO. B John Law. C the SEC. D SSC's CCO.

Anchoring

Making irrational decisions based on information that should have no influence on the decision at hand is known as

All of them- Whether using a table, a chart, or a list, broker-dealers must make sure that it is easy for customers to determine what the fees and charges are and how they are computed.

Securities regulators have taken a strong position on the need for registered broker-dealers to disclose the fees they charge. Among the most common ways for making this disclosure are I. presenting a chart with all of the fees II. preparing a list of all of the fees III. displaying the fees in tabular form

ordinary income; long term capital gain

Under IRS rules, if part of your retirement plan assets includes company stock, taking that as a distribution (not rolling it over into an IRA) subjects the cost basis to ________tax and any unrealized appreciation is taxed as _________

resistance level

When the price reaches this ________ level, demand plummets , and price and volume begin to decrease again.

support level

When the price reaches this_____ level, demand surges, and price and volume begin to increase again.

B3

Which of the following is responsible for administration of the Bank Secrecy Act? A Security Service B The Financial Crimes Enforcement Network C Securities and Exchange Commission D Department of Health and Human Services

Average cost per share; average cost per transaction

dollar cost averaging will produce an average_______ that is less than the average _______

overbought; oversold

down when the stock is ______ or resistance level and up when the stock is__________or support level

GRAT- grantor retained annuity trust

is an estate planning tool designed to pass assets to beneficiaries (usually children) in a way to minimize gift and/or estate taxes

herd mentality

is the tendency to follow the actions of a larger group, whether rational or not.

Confirmation Bias

is the tendency to pay attention to information that supports one's preconceived opinions while disregarding accurate, unsupportive information