SERIES 65 EXAM REVIEW UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. What are the ranges of micro, small, mid, and large cap
companies?
Answer:
under 300m, 300m - 2b , 2b - 10b , over 10b
Question:
2. What is the formula for quick ratio, quick asset ratio, and
acid test ratio
Answer:
these are all synonyms. (CA - Inventory)/CL
Question:
3. Name all of the current (coincident) indicators
Answer:
Nonagricultural employment
Personal income, minus Social Security, veteran benefits, and welfare payments
(happens now)
Industrial production (happens right now)
Manufacturing and trade sales in constant dollars (happens right now)
Question:
4. Name all of the lagging indicators
Answer:
Average duration of unemployment (people dont get re-hired right away. it takes
a little bit)
Ratio of consumer installment credit to personal income
Ratio of manufacturing and trade inventories to sales
Average prime rate
Change in the CPI for services
Total amount of commercial and industrial loans outstanding
Change in the index of labor cost per unit of output (manufacturing)
,Question:
5. Name the main leading indicators
Answer:
new housing permits (this indicates there will be many new purchases like wood,
shingles, windows, etc)
manufacturer's new orders (if they bought an airplane mold, it means they will
make more airplanes)
SP500 index (shows investor sentiment)
Money Supply
Question:
6. What is the recipient's cost basis and date of acquisition
for a security he was gifted?
Answer:
The client is considered to have acquired the security on the donor's purchase
date and at the donor's purchase price.
Question:
7. What is the recipient's cost basis and date of acquisition
for a security he inherited?
Answer:
The client's cost basis for determining if there is a taxable capital gain is the fair
market value (FMV) as of the date of death. The holding period is not a
consideration because any gains are considered long-term.
Question:
8. What is 13F filing and who has to do it?
Answer:
Section 13(f ) of the Securities Exchange Act of 1934 requires that any institutional
investment manager that exercises investment discretion over an equity portfolio
with a market value on the last trading day in any of the preceding 12 months of
$100 million or more in 13(f ) securities, must file a Form 13F with the SEC quarterly,
within 45 days of the end of each quarter.
The purpose of this rule is to require institutional investment managers who
exercise investment discretion over accounts holding certain levels of securities to
make periodic public disclosures of significant portfolio holdings.
Question:
9. Under the USA what is the statute of limitations for civil
liabilities?
Answer:
3 years from the date of the sale or 2 years after discovery, whichever comes first
, Question:
10. Under federal law what is the statute of limitations for civil
liabilities?
Answer:
3 years from the date of the sale or 1 year after discovery, whichever comes first
Question:
11. Who may participate in Keogh Plans?
Answer:
Keogh plans are Employee Retirement Income Security Act (ERISA)-qualified
plans intended for self-employed individuals and owner-employees of
unincorporated business concerns or professional practices. Included in the self-
employed category are independent contractors, consultants, freelancers, and
anyone else who files and pays self-employment Social Security taxes. The term
owner-employee refers to sole proprietors. A corporation cannot use a Keogh
plan.
For those filing tax returns in 2019, as much as $56,000 may be contributed on
behalf of a plan participant.
Question:
12. What are the 2 types of municipal bonds? Which is safer
and which offers a higher yield?
Answer:
General Obligation (GO) and Revenue Bonds. GO Bonds are safer because they
are backed by taxes while Revenue Bonds are backed by revenues from state-
owned companies like water, sewer, electric, toll-bridge, airports, etc.
Taxes are a safer bet and, therefore, offer a lower yield. Since Revenue Bonds are
riskier (but still quite safe) they often have a higher yield.
QUESTIONS AND CORRECT ANSWERS
Question:
1. What are the ranges of micro, small, mid, and large cap
companies?
Answer:
under 300m, 300m - 2b , 2b - 10b , over 10b
Question:
2. What is the formula for quick ratio, quick asset ratio, and
acid test ratio
Answer:
these are all synonyms. (CA - Inventory)/CL
Question:
3. Name all of the current (coincident) indicators
Answer:
Nonagricultural employment
Personal income, minus Social Security, veteran benefits, and welfare payments
(happens now)
Industrial production (happens right now)
Manufacturing and trade sales in constant dollars (happens right now)
Question:
4. Name all of the lagging indicators
Answer:
Average duration of unemployment (people dont get re-hired right away. it takes
a little bit)
Ratio of consumer installment credit to personal income
Ratio of manufacturing and trade inventories to sales
Average prime rate
Change in the CPI for services
Total amount of commercial and industrial loans outstanding
Change in the index of labor cost per unit of output (manufacturing)
,Question:
5. Name the main leading indicators
Answer:
new housing permits (this indicates there will be many new purchases like wood,
shingles, windows, etc)
manufacturer's new orders (if they bought an airplane mold, it means they will
make more airplanes)
SP500 index (shows investor sentiment)
Money Supply
Question:
6. What is the recipient's cost basis and date of acquisition
for a security he was gifted?
Answer:
The client is considered to have acquired the security on the donor's purchase
date and at the donor's purchase price.
Question:
7. What is the recipient's cost basis and date of acquisition
for a security he inherited?
Answer:
The client's cost basis for determining if there is a taxable capital gain is the fair
market value (FMV) as of the date of death. The holding period is not a
consideration because any gains are considered long-term.
Question:
8. What is 13F filing and who has to do it?
Answer:
Section 13(f ) of the Securities Exchange Act of 1934 requires that any institutional
investment manager that exercises investment discretion over an equity portfolio
with a market value on the last trading day in any of the preceding 12 months of
$100 million or more in 13(f ) securities, must file a Form 13F with the SEC quarterly,
within 45 days of the end of each quarter.
The purpose of this rule is to require institutional investment managers who
exercise investment discretion over accounts holding certain levels of securities to
make periodic public disclosures of significant portfolio holdings.
Question:
9. Under the USA what is the statute of limitations for civil
liabilities?
Answer:
3 years from the date of the sale or 2 years after discovery, whichever comes first
, Question:
10. Under federal law what is the statute of limitations for civil
liabilities?
Answer:
3 years from the date of the sale or 1 year after discovery, whichever comes first
Question:
11. Who may participate in Keogh Plans?
Answer:
Keogh plans are Employee Retirement Income Security Act (ERISA)-qualified
plans intended for self-employed individuals and owner-employees of
unincorporated business concerns or professional practices. Included in the self-
employed category are independent contractors, consultants, freelancers, and
anyone else who files and pays self-employment Social Security taxes. The term
owner-employee refers to sole proprietors. A corporation cannot use a Keogh
plan.
For those filing tax returns in 2019, as much as $56,000 may be contributed on
behalf of a plan participant.
Question:
12. What are the 2 types of municipal bonds? Which is safer
and which offers a higher yield?
Answer:
General Obligation (GO) and Revenue Bonds. GO Bonds are safer because they
are backed by taxes while Revenue Bonds are backed by revenues from state-
owned companies like water, sewer, electric, toll-bridge, airports, etc.
Taxes are a safer bet and, therefore, offer a lower yield. Since Revenue Bonds are
riskier (but still quite safe) they often have a higher yield.
