Series 65 Exam 2025 Questions and
Answers
Under the Uniform Securities Act, which of the following are defined as sales? -
ANSWER✔✔-A sale is a contract or transaction for value. Therefore, when a security is
given as a bonus in connection with the sale of another security, it is also considered a
sale. Because an assessable stock may require a payment made by the recipient, the gift
is considered a sale. The gift of a non-assessable stock is not a sale as it is not a contract
for value. An offering of securities is not a transaction or sale of securities until the offer
is accepted.
A broker-dealer is NOT considered an investment adviser if the: - ANSWER✔✔-
Excluded from the definition of investment adviser are financial institutions, publishers,
investment adviser representatives, and certain professionals, including broker-dealers,
whose advice is incidental to their profession and who are not compensated for it.
Under the Investment Advisers Act of 1940, an adviser is required to be registered with
the SEC if: - ANSWER✔✔-Advisers to registered investment companies are required to
be SEC-registered. Under the Advisers Act, as modified by the Dodd-Frank Act,
,advisers are exempt from SEC registration if they manage less than $100 million in
assets and have no investment company clients. Persons are excluded from the
Advisers Act definition of investment adviser if they are publishers of news or
business/financial publications of general and regular circulation or if their advice
relates solely to U.S. government securities.
According to North American Securities Administrators Association's (NASAA)
Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and
Agents, which of the following practices is NOT unethical? - ANSWER✔✔-The THREE
A's: Action, Amount, Asset
An agent of a broker-dealer may exercise discretion in deciding the time or the price at
which a sale takes place during the trading day without express written discretionary
authority. Such action is not unethical because time and price are not considered true
discretion. An agent may not exercise discretion over the number of shares to be sold
without prior written discretionary authority. Oral discretion is only permitted for
investment advisers and their representatives, (never broker-dealers or agents), during
the first 10 business days after the initial discretionary transaction in the account.
Reference: 2.11.5 in the License Exam Manual
An investor in the 28% income tax bracket is considering purchasing either an 8%
municipal bond or a 10% corporate bond. Which of the following regarding the bonds is
,TRUE? - ANSWER✔✔-Investors are interested in their return after taxes (what they get
to keep). The 2 bonds must be compared on a tax-equivalent basis. For example, the tax-
equivalent yield of a municipal bond equals tax-free yield divided by 100% minus tax
rate. The tax equivalent rate in this case is .08 ÷ .72 (100% − 28%) = 11.11%. In other
words, a client in the 28% tax bracket would have to invest in a taxable bond that yields
11.11% to get the same after-tax return that the 8% tax-free bond offers.
Which of the following statements is TRUE about futures and forwards? -
ANSWER✔✔-Futures contracts are traded on exchanges and, therefore, have
standardized terms. In forwards, the terms of each contract are separately negotiated.
Reference: 9.2.1 in the License Exam Manual
George and Martha Washington are both in their mid-70s, very active in their
community, and both work part-time at the local community bank. They would like to
contribute a small portion of their earnings to some form of retirement plan. Which of
the following choices would be the most appropriate for this couple? - ANSWER✔✔-
One of the distinguishing characteristics of the Roth IRA is that contributions may be
continued past age 70 ½ as long as the participant has earned income.
Reference: 20.1.2.1 in the License Exam Manual
An employee is offered a non-qualified stock option with an exercise price of $20 per
share. If the option is exercised when the current market value of the stock is $30, the
, employee: - ANSWER✔✔-In the case of NSOs, the difference between the exercise (or
strike) price and the current market value is considered salary to the employee.
Reference: 4.1.8 in the License Exam Manual
MaryBeth is an agent with QuickTrade Securities, a subsidiary of QuickLoan Bankcorp,
a holding company that also owns QuickIssue Capital Markets, an underwriter
specializing in bringing new issues to market. Under the NASAA Statement of Policy
on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, MaryBeth
would be permitted to split commissions resulting from securities transactions with any
of the following individuals EXCEPT - ANSWER✔✔-Under the NASAA Policy, in
order to split commissions, both individuals must be licensed as agents with either the
same broker-dealer, or ones under common control (ownership). What about sharing
with your principal? Why not? In fact, many managers (principals) have commission
overrides as a fundamental part of their compensation package. Remember, as we state
in your License Exam Manual, under the Uniform Securities Act, there is no separate
principal registration as there is with FINRA; all principals are registered as agents (or
IARs as the case may be), just the same as you.
Reference: 2.11.26.4 in the License Exam Manual
Among the differences between C corporations and S corporations is: - ANSWER✔✔-
Unlike C corporations, there is a limit placed on the number of shareholders in an S
corp. At the time of this printing, that maximum is 100, none of whom may be a non-
Answers
Under the Uniform Securities Act, which of the following are defined as sales? -
ANSWER✔✔-A sale is a contract or transaction for value. Therefore, when a security is
given as a bonus in connection with the sale of another security, it is also considered a
sale. Because an assessable stock may require a payment made by the recipient, the gift
is considered a sale. The gift of a non-assessable stock is not a sale as it is not a contract
for value. An offering of securities is not a transaction or sale of securities until the offer
is accepted.
A broker-dealer is NOT considered an investment adviser if the: - ANSWER✔✔-
Excluded from the definition of investment adviser are financial institutions, publishers,
investment adviser representatives, and certain professionals, including broker-dealers,
whose advice is incidental to their profession and who are not compensated for it.
Under the Investment Advisers Act of 1940, an adviser is required to be registered with
the SEC if: - ANSWER✔✔-Advisers to registered investment companies are required to
be SEC-registered. Under the Advisers Act, as modified by the Dodd-Frank Act,
,advisers are exempt from SEC registration if they manage less than $100 million in
assets and have no investment company clients. Persons are excluded from the
Advisers Act definition of investment adviser if they are publishers of news or
business/financial publications of general and regular circulation or if their advice
relates solely to U.S. government securities.
According to North American Securities Administrators Association's (NASAA)
Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and
Agents, which of the following practices is NOT unethical? - ANSWER✔✔-The THREE
A's: Action, Amount, Asset
An agent of a broker-dealer may exercise discretion in deciding the time or the price at
which a sale takes place during the trading day without express written discretionary
authority. Such action is not unethical because time and price are not considered true
discretion. An agent may not exercise discretion over the number of shares to be sold
without prior written discretionary authority. Oral discretion is only permitted for
investment advisers and their representatives, (never broker-dealers or agents), during
the first 10 business days after the initial discretionary transaction in the account.
Reference: 2.11.5 in the License Exam Manual
An investor in the 28% income tax bracket is considering purchasing either an 8%
municipal bond or a 10% corporate bond. Which of the following regarding the bonds is
,TRUE? - ANSWER✔✔-Investors are interested in their return after taxes (what they get
to keep). The 2 bonds must be compared on a tax-equivalent basis. For example, the tax-
equivalent yield of a municipal bond equals tax-free yield divided by 100% minus tax
rate. The tax equivalent rate in this case is .08 ÷ .72 (100% − 28%) = 11.11%. In other
words, a client in the 28% tax bracket would have to invest in a taxable bond that yields
11.11% to get the same after-tax return that the 8% tax-free bond offers.
Which of the following statements is TRUE about futures and forwards? -
ANSWER✔✔-Futures contracts are traded on exchanges and, therefore, have
standardized terms. In forwards, the terms of each contract are separately negotiated.
Reference: 9.2.1 in the License Exam Manual
George and Martha Washington are both in their mid-70s, very active in their
community, and both work part-time at the local community bank. They would like to
contribute a small portion of their earnings to some form of retirement plan. Which of
the following choices would be the most appropriate for this couple? - ANSWER✔✔-
One of the distinguishing characteristics of the Roth IRA is that contributions may be
continued past age 70 ½ as long as the participant has earned income.
Reference: 20.1.2.1 in the License Exam Manual
An employee is offered a non-qualified stock option with an exercise price of $20 per
share. If the option is exercised when the current market value of the stock is $30, the
, employee: - ANSWER✔✔-In the case of NSOs, the difference between the exercise (or
strike) price and the current market value is considered salary to the employee.
Reference: 4.1.8 in the License Exam Manual
MaryBeth is an agent with QuickTrade Securities, a subsidiary of QuickLoan Bankcorp,
a holding company that also owns QuickIssue Capital Markets, an underwriter
specializing in bringing new issues to market. Under the NASAA Statement of Policy
on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, MaryBeth
would be permitted to split commissions resulting from securities transactions with any
of the following individuals EXCEPT - ANSWER✔✔-Under the NASAA Policy, in
order to split commissions, both individuals must be licensed as agents with either the
same broker-dealer, or ones under common control (ownership). What about sharing
with your principal? Why not? In fact, many managers (principals) have commission
overrides as a fundamental part of their compensation package. Remember, as we state
in your License Exam Manual, under the Uniform Securities Act, there is no separate
principal registration as there is with FINRA; all principals are registered as agents (or
IARs as the case may be), just the same as you.
Reference: 2.11.26.4 in the License Exam Manual
Among the differences between C corporations and S corporations is: - ANSWER✔✔-
Unlike C corporations, there is a limit placed on the number of shareholders in an S
corp. At the time of this printing, that maximum is 100, none of whom may be a non-
