Series 65 practice test 1
1. Which of the following is a notice made in the financial press that formally announces a particular
transaction, such as an IPO for stock placement?
A. Omitting prospectus
B. Preliminary prospectus
C. Red herring
D. Tombstone ad - correct answer ✔✔1. D.
The tombstone ad is a notice made in the financial press that formally announces a particular
transaction, such as an IPO or stock placement.
2. One of the following is/are correct regarding stock splits in reverse stock splits?
(1) a three for one stock split will decrease a stock's market price per share
(2) a reverse stock split is intended to increase a stock's market price per share
A. (1) only
B. (2) only
C. Both (1) and (2) are correct
D. Neither (1) or (2) are correct - correct answer ✔✔2. C
Both (1) and (2) are correct.
1) a three for one stock split will decrease a stock's market price per share
2) a reverse stock split is intended to increase a stock's market price per share
3. Which of the following is the minimum denomination that of treasury notes that can be purchased by
an investor?
A. $50.00
B. $100
C. $1000
D. $10,000 - correct answer ✔✔3. B
Treasury notes are sold in minimum denominations of $100
,4. The statement of cash flows is separated into all but which of the following categories?
A. Cash flow from financing activities
B. Cash flow from income activities
C. Cash flow from investing activities
D. Cash flow from operating activities - correct answer ✔✔4. B
The statement of cash flows a separate into the following three categories: cash flow from finance
activities, cash flow from investing activities, and cash flow from operating activities.
5. Which are the following are permitted investment in an IRA?
(1) real estate
(2) money market funds
(3) common stock
(4) bond funds
A. Three and four only
B. 1, 2 and three only
C. 2, 3 and four only
D. All of the above are correct - correct answer ✔✔5. D
IRAs may invest in all four types of investments, including real estate investment trusts (REIT)
6. Which of the following statements describes a typical whole Life Insurance policy?
(1) The premiums must be paid for the insured's entire lifetime or for a period of at least 10 years.
(2) The cash value cannot be used as collateral for a loan.
(3) The difference between a policy's face amount in the reserve must be greater than the cash
surrender value at all times.
(4) The cash value must equal the face amount of coverage by the end of the mortality table.
A. Four only
,B. Two and three only
C. One, two and three only
D. All of the above are correct - correct answer ✔✔6. A
The cash value of a whole Life Insurance policy must equal the face amount of coverage by the end of
the mortality table.
7. Which of the following is cracked regarding a mutual funds turnover rate?
A. The higher the turnover rate, the less effcient the mutual fund will be. Therefore, funds with high
turnover rates are best positioned in taxable accounts.
B. The higher the turnover rate, the more effcient the mutual fund will be. Therefore, funds with low
turnover rates are best positioned in tax deferred accounts.
C. The higher the turnover rate, the last effecient the mutual fund will be. Therefore, funds with high to
ever rates are best positioned in tax deferred accounts.
D. None of the above are correct. - correct answer ✔✔7. C.
The higher the Turner rate, the less tax effecient the mutual fund will be. There for funds with a high
turnover rate her best positioned in tax deferred account.
8. If an RIA has between ____________ and ___________of assets under management, the RIA may
register with either date applicable state(s) where the RIA maintains clients or the SEC, at the RIA's
discretion.
A. $10,000,000, $100,000,000
B. $25,000,000, $100,000,000
C. $50,000,000, $150,000,000
D. $100,000,000, $200,000,000 - correct answer ✔✔8. B
If an RIA has between 25,000,001 $100,000,000 of assets under management, the RIA may register
would either the applicable state(s) where the RIA maintain its clients or the SEC. Due to legislation,
exemptions may apply.
9. Which of the following are correct regarding the role of the trustee?
1) a trustee is the legal owner of Trust Property.
2) a trustee has a fiduciary duty to income beneficiaries only.
, 3) a trustee must act at all times for the Kasa benefit of the benefit raised or he or she may incur a legal
liability.
4) a trustee has a fiduciary duty to remainder beneficiaries only.
A. 1 and 3 only.
B. 2 and 4 only.
C. 1, 2, in 3 only.
D. 1, 3, and 4 only. - correct answer ✔✔9. A
A trustee is the legal owner of Trust Property. The trustee must act of all time for the exclusive benefit of
the beneficiaries or he or she a incur a legal liability. A trustee has a fiduciary duty to all trust
beneficiaries regardless of whether they are in com or remainder beneficiaries.
10. Which of the following is a system of taxation were one tax rate is applied to all personal income with
no deductions are offsets allowed?
A. flat tax
B. General tax
C. Single payer tax
D. Value added tax - correct answer ✔✔10. A
A flat tax is a system of taxation were one tax rate is applied to all personal income with no deductions
are offsets allowed.
11. All but which of the following are correct regarding a bond's call provision?
A. It protects the issuer from declines in interest rates.
B. It will cause investor's require rate of return greater return to the lower.
C. It made be included in a bond agreement.
D. It allows a debtor to pay off the debt after a specific period of time at a predetermined price. - correct
answer ✔✔11. B
A bond's call provision may be included in a bond agreement, and allows the debtor to pay off the debt
after a specific period of time at a predetermined price. It protects the issuer from declines in interest
rates. If a bond is callable it will cause investors require reader turned to be higher.
1. Which of the following is a notice made in the financial press that formally announces a particular
transaction, such as an IPO for stock placement?
A. Omitting prospectus
B. Preliminary prospectus
C. Red herring
D. Tombstone ad - correct answer ✔✔1. D.
The tombstone ad is a notice made in the financial press that formally announces a particular
transaction, such as an IPO or stock placement.
2. One of the following is/are correct regarding stock splits in reverse stock splits?
(1) a three for one stock split will decrease a stock's market price per share
(2) a reverse stock split is intended to increase a stock's market price per share
A. (1) only
B. (2) only
C. Both (1) and (2) are correct
D. Neither (1) or (2) are correct - correct answer ✔✔2. C
Both (1) and (2) are correct.
1) a three for one stock split will decrease a stock's market price per share
2) a reverse stock split is intended to increase a stock's market price per share
3. Which of the following is the minimum denomination that of treasury notes that can be purchased by
an investor?
A. $50.00
B. $100
C. $1000
D. $10,000 - correct answer ✔✔3. B
Treasury notes are sold in minimum denominations of $100
,4. The statement of cash flows is separated into all but which of the following categories?
A. Cash flow from financing activities
B. Cash flow from income activities
C. Cash flow from investing activities
D. Cash flow from operating activities - correct answer ✔✔4. B
The statement of cash flows a separate into the following three categories: cash flow from finance
activities, cash flow from investing activities, and cash flow from operating activities.
5. Which are the following are permitted investment in an IRA?
(1) real estate
(2) money market funds
(3) common stock
(4) bond funds
A. Three and four only
B. 1, 2 and three only
C. 2, 3 and four only
D. All of the above are correct - correct answer ✔✔5. D
IRAs may invest in all four types of investments, including real estate investment trusts (REIT)
6. Which of the following statements describes a typical whole Life Insurance policy?
(1) The premiums must be paid for the insured's entire lifetime or for a period of at least 10 years.
(2) The cash value cannot be used as collateral for a loan.
(3) The difference between a policy's face amount in the reserve must be greater than the cash
surrender value at all times.
(4) The cash value must equal the face amount of coverage by the end of the mortality table.
A. Four only
,B. Two and three only
C. One, two and three only
D. All of the above are correct - correct answer ✔✔6. A
The cash value of a whole Life Insurance policy must equal the face amount of coverage by the end of
the mortality table.
7. Which of the following is cracked regarding a mutual funds turnover rate?
A. The higher the turnover rate, the less effcient the mutual fund will be. Therefore, funds with high
turnover rates are best positioned in taxable accounts.
B. The higher the turnover rate, the more effcient the mutual fund will be. Therefore, funds with low
turnover rates are best positioned in tax deferred accounts.
C. The higher the turnover rate, the last effecient the mutual fund will be. Therefore, funds with high to
ever rates are best positioned in tax deferred accounts.
D. None of the above are correct. - correct answer ✔✔7. C.
The higher the Turner rate, the less tax effecient the mutual fund will be. There for funds with a high
turnover rate her best positioned in tax deferred account.
8. If an RIA has between ____________ and ___________of assets under management, the RIA may
register with either date applicable state(s) where the RIA maintains clients or the SEC, at the RIA's
discretion.
A. $10,000,000, $100,000,000
B. $25,000,000, $100,000,000
C. $50,000,000, $150,000,000
D. $100,000,000, $200,000,000 - correct answer ✔✔8. B
If an RIA has between 25,000,001 $100,000,000 of assets under management, the RIA may register
would either the applicable state(s) where the RIA maintain its clients or the SEC. Due to legislation,
exemptions may apply.
9. Which of the following are correct regarding the role of the trustee?
1) a trustee is the legal owner of Trust Property.
2) a trustee has a fiduciary duty to income beneficiaries only.
, 3) a trustee must act at all times for the Kasa benefit of the benefit raised or he or she may incur a legal
liability.
4) a trustee has a fiduciary duty to remainder beneficiaries only.
A. 1 and 3 only.
B. 2 and 4 only.
C. 1, 2, in 3 only.
D. 1, 3, and 4 only. - correct answer ✔✔9. A
A trustee is the legal owner of Trust Property. The trustee must act of all time for the exclusive benefit of
the beneficiaries or he or she a incur a legal liability. A trustee has a fiduciary duty to all trust
beneficiaries regardless of whether they are in com or remainder beneficiaries.
10. Which of the following is a system of taxation were one tax rate is applied to all personal income with
no deductions are offsets allowed?
A. flat tax
B. General tax
C. Single payer tax
D. Value added tax - correct answer ✔✔10. A
A flat tax is a system of taxation were one tax rate is applied to all personal income with no deductions
are offsets allowed.
11. All but which of the following are correct regarding a bond's call provision?
A. It protects the issuer from declines in interest rates.
B. It will cause investor's require rate of return greater return to the lower.
C. It made be included in a bond agreement.
D. It allows a debtor to pay off the debt after a specific period of time at a predetermined price. - correct
answer ✔✔11. B
A bond's call provision may be included in a bond agreement, and allows the debtor to pay off the debt
after a specific period of time at a predetermined price. It protects the issuer from declines in interest
rates. If a bond is callable it will cause investors require reader turned to be higher.
