STC SERIES 66 QUESTIONS PT 2
COMPLETE QUESTIONS AND ANSWERS
WITH VERIFIED SOLUTIONS LATEST
UPDATE 2025/2026
Which of the following is a measure of non-systematic risk?
A. Alpha
B. Theta
C. Gamma
D. Beta - CORRECT ANSWER - A. Alpha
Alpha is a way to measure risk that's association with a single investment,
which is better known as non-systematic risk. On the other hand, systematic
risk is associated with all investments and is measured by beta. Gamma and
theta are both risk measurements, but they're specific to option contracts. (
When are fees assessed on no-load mutual fund shares?
A. Annually
B. When the shares are redeemed
C. Quarterly
D. When the shares are purchased - CORRECT ANSWER - A. Annually
No-load funds cannot assess a front-end or back-end sales charge. This means
that investors don't pay sales charges when they purchase or redeem shares.
1|Page
,However, no-load funds may charge a 12b-1 fee up to 0.25% of the assets
under management. In most cases, 12b-1 fees are assessed annually, which is
when investors must pay them.
Which of the following statements regarding the differences between an annual
rebalancing strategy and a buy-and-hold strategy over a 30-year period is FALSE?
A. The buy and hold strategy is easier to manage than a rebalancing strategy
B. The tax and transactions costs will be lower with a buy and hold strategy
C. The risk in a buy and hold strategy portfolio will match the investor's risk
tolerance
D. The equity portion in a buy and hold portfolio could grow in relation to the
fixed-income portion, whereas a rebalanced portfolio will remain balanced every
year - CORRECT ANSWER - C. The risk in a buy and hold strategy portfolio will
match the investor's risk tolerance
The risk levels in a buy and hold portfolio will rise and fall, while a
rebalanced portfolio will be adjusted periodically to meet the investor's risk
tolerance. Rebalanced portfolios will also attempt to maintain the percentage
of equity and debt in the portfolio, while buy and hold portfolios will allow the
percentages to drift. One of the advantages of a buy and hold strategy is that
transaction and tax expenses are minimized since there is generally no
continuous buying and selling.
Which of the following is TRUE of a Qualified Domestic Relations Order
(QDRO)?
A. QDRO is a court order that provides an alternative payee the right to receive all
or a portion of the benefits that are payable to a participant under a qualified
retirement plan
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,B. A QDRO is a court order that requires one person involved in a divorce to
provide for the payment of alimony or child support
C. A QDRO is a court order that divides all jointly held property in the event of a
divorce
D. A QDRO is a court order that provides an alternative payee the right to receive
all or a portion of the benefits that are payable to a participant under a non-
qualified retirement plan - CORRECT ANSWER - A. QDRO is a court order that
provides an alternative payee the right to receive all or a portion of the benefits that
are payable to a participant under a qualified retirement plan
A QDRO is a court order that is entered as a part of a property division in a
divorce or legal separation that splits a qualified retirement plan or pension
plan by recognizing joint marital ownership in the plan. The court may award
all or a portion of the plan participant's benefit to an alternative payee, such
as a spouse, child, or other dependent of the plan participant.
Which of the following is a qualified education expense for a 529 plan?
A. Student loans
B. Health insurance
C. College application fees
D. Travel expenses - CORRECT ANSWER - A. Student loans
Section 529 plans are savings accounts that are used to pay for "qualified
education expenses." Tuition is the largest qualified expense, but in some
cases, 529 plan savings can be used to pay for student loans after college.
Travel expenses (e.g., plane tickets), health insurance, and application fees are
NOT considered qualified education expenses. (18293)
3|Page
, Precision Investment Partners is a broker-dealer registered in Tennessee. A recent
restructuring at the firm caused a significant portion of the information on the
firm's last application filed with the Administrator to no longer be valid. What
action must the firm take to be in compliance under the USA?
A. Precision must file an amendment to its application promptly
B. Since Precision is already registered in Tennessee, it has a 90-day grace period
to amend its application, provided the firm is in compliance with all current state
securities laws
C. Precision should call the Administrator, but is not required to update its
application until the firm's annual licensing renewal date
D. Precision must cease doing business until a new application is filed and
approved by the Administrator - CORRECT ANSWER - A. Precision must file an
amendment to its application promptly
According to the Uniform Securities Act, if the information contained in any
document filed with the Administrator becomes materially inaccurate or
incomplete, an amendment must be filed by the registrant promptly. (70141)
If the NPV (net present value) of an investment is greater than zero, the investment
will provide a return:
A. Greater than the discount rate used
B. Of less than the discount rate used
C. That is unknown
D. Equal to the discount rate used - CORRECT ANSWER - A. Greater than the
discount rate used
If the net present value of an investment is greater than zero, the investment
will generate a positive return. Net present value is used in discounted cash
4|Page
COMPLETE QUESTIONS AND ANSWERS
WITH VERIFIED SOLUTIONS LATEST
UPDATE 2025/2026
Which of the following is a measure of non-systematic risk?
A. Alpha
B. Theta
C. Gamma
D. Beta - CORRECT ANSWER - A. Alpha
Alpha is a way to measure risk that's association with a single investment,
which is better known as non-systematic risk. On the other hand, systematic
risk is associated with all investments and is measured by beta. Gamma and
theta are both risk measurements, but they're specific to option contracts. (
When are fees assessed on no-load mutual fund shares?
A. Annually
B. When the shares are redeemed
C. Quarterly
D. When the shares are purchased - CORRECT ANSWER - A. Annually
No-load funds cannot assess a front-end or back-end sales charge. This means
that investors don't pay sales charges when they purchase or redeem shares.
1|Page
,However, no-load funds may charge a 12b-1 fee up to 0.25% of the assets
under management. In most cases, 12b-1 fees are assessed annually, which is
when investors must pay them.
Which of the following statements regarding the differences between an annual
rebalancing strategy and a buy-and-hold strategy over a 30-year period is FALSE?
A. The buy and hold strategy is easier to manage than a rebalancing strategy
B. The tax and transactions costs will be lower with a buy and hold strategy
C. The risk in a buy and hold strategy portfolio will match the investor's risk
tolerance
D. The equity portion in a buy and hold portfolio could grow in relation to the
fixed-income portion, whereas a rebalanced portfolio will remain balanced every
year - CORRECT ANSWER - C. The risk in a buy and hold strategy portfolio will
match the investor's risk tolerance
The risk levels in a buy and hold portfolio will rise and fall, while a
rebalanced portfolio will be adjusted periodically to meet the investor's risk
tolerance. Rebalanced portfolios will also attempt to maintain the percentage
of equity and debt in the portfolio, while buy and hold portfolios will allow the
percentages to drift. One of the advantages of a buy and hold strategy is that
transaction and tax expenses are minimized since there is generally no
continuous buying and selling.
Which of the following is TRUE of a Qualified Domestic Relations Order
(QDRO)?
A. QDRO is a court order that provides an alternative payee the right to receive all
or a portion of the benefits that are payable to a participant under a qualified
retirement plan
2|Page
,B. A QDRO is a court order that requires one person involved in a divorce to
provide for the payment of alimony or child support
C. A QDRO is a court order that divides all jointly held property in the event of a
divorce
D. A QDRO is a court order that provides an alternative payee the right to receive
all or a portion of the benefits that are payable to a participant under a non-
qualified retirement plan - CORRECT ANSWER - A. QDRO is a court order that
provides an alternative payee the right to receive all or a portion of the benefits that
are payable to a participant under a qualified retirement plan
A QDRO is a court order that is entered as a part of a property division in a
divorce or legal separation that splits a qualified retirement plan or pension
plan by recognizing joint marital ownership in the plan. The court may award
all or a portion of the plan participant's benefit to an alternative payee, such
as a spouse, child, or other dependent of the plan participant.
Which of the following is a qualified education expense for a 529 plan?
A. Student loans
B. Health insurance
C. College application fees
D. Travel expenses - CORRECT ANSWER - A. Student loans
Section 529 plans are savings accounts that are used to pay for "qualified
education expenses." Tuition is the largest qualified expense, but in some
cases, 529 plan savings can be used to pay for student loans after college.
Travel expenses (e.g., plane tickets), health insurance, and application fees are
NOT considered qualified education expenses. (18293)
3|Page
, Precision Investment Partners is a broker-dealer registered in Tennessee. A recent
restructuring at the firm caused a significant portion of the information on the
firm's last application filed with the Administrator to no longer be valid. What
action must the firm take to be in compliance under the USA?
A. Precision must file an amendment to its application promptly
B. Since Precision is already registered in Tennessee, it has a 90-day grace period
to amend its application, provided the firm is in compliance with all current state
securities laws
C. Precision should call the Administrator, but is not required to update its
application until the firm's annual licensing renewal date
D. Precision must cease doing business until a new application is filed and
approved by the Administrator - CORRECT ANSWER - A. Precision must file an
amendment to its application promptly
According to the Uniform Securities Act, if the information contained in any
document filed with the Administrator becomes materially inaccurate or
incomplete, an amendment must be filed by the registrant promptly. (70141)
If the NPV (net present value) of an investment is greater than zero, the investment
will provide a return:
A. Greater than the discount rate used
B. Of less than the discount rate used
C. That is unknown
D. Equal to the discount rate used - CORRECT ANSWER - A. Greater than the
discount rate used
If the net present value of an investment is greater than zero, the investment
will generate a positive return. Net present value is used in discounted cash
4|Page
