SERIES 66 - EXAM FX FINAL
QUESTIONS # 1, SERIES 66- EXAM FX
FINAL QUESTIONS # 2
An agent recommends several securities that he deems suitable for the customer.
The customer rejects all of these recommendations and wants to place an order for
a security that the agent feels is unsuitable. The agent:
A. Is prohibited from executing the order
B. May execute the order, but should obtain a written statement that the order was
unsolicited and the agent did not recommend the security
C. May execute the order only if the client has sufficient funds in the account prior
to placing the order
D. Should execute the order since he is required by law - CORRECT ANSWER -
B. May execute the order, but should obtain a written statement that the order was
unsolicited and the agent did not recommend the security
- The agent may execute the order, but it would be prudent to obtain a written
statement that the order was unsolicited and not recommended by the agent.
Also, the trade ticket should be marked "unsolicited".
Randy is a broker who enjoys doing investment research much more than
prospecting for sales. His friend Any is just the opposite as he loves talking to new
people and hates numbers. They have agreed that Randy will do all the research
work if Andy will send sales Randy's way when possible. Which of the following
is true regarding this relationship?
A. Such a relationship must be tied to a written contract between the broker/dealer
and the advisory firm involved and must be binding for all transactions
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,B. This form of alliance is considered a unilateral agreement since the broker must
rely on the adviser's goodwill to secure any future compensation
C. This is considered a soft dollar alliance and must be monitored periodically to
avoid the potential for conflicts of interest
D. Randy must file a Form AD-1 with his broker/dealer listing Andy as his
advisory partner for the "mated" transactions - CORRECT ANSWER - C. This is
considered a soft dollar alliance and must be monitored periodically to avoid the
potential for conflicts of interest
- Since this is a soft dollar alliance, the risk of conflict of interest is inherent
regardless of the parties involved and must be monitored for such.
Which of the following best describes regulatory risk?
A. Purchase of a security at an inappropriate time
B. Security falling out of political favor
C. Currency exchange rates affecting foreign investments
D. Changes in law that can potentially affect a security - CORRECT ANSWER -
D. Changes in law that can potentially affect a security
- Regulatory risk, also known as legislative risk, is associated with changes in
law that can potentially affect a security, an industry or a country
Sector rotating is: - CORRECT ANSWER - Adjusting a portfolio allocation based
on economic conditions.
- Sector rotating involves moving a portfolio's allocation from one sector to
another based on economic conditions or seasonal trends
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,An investment adviser has identified what he perceives to be an excellent
investment opportunity for some of his client. He made calls to the selected clients
and told them that he believes that the investment will have over 12% return this
year and recommended they invest. Which of the following is true concerning the
adviser's statement?
A. This is considered an example of an adviser doing performance research which
is part of the advisory services contract
B. Such statements may not be made since they imply a specific performance of a
security for which advice is being given
C. The advisor may not make this kind of statement to his clients unless it is part of
a portfolio of investments and not a single security
D. The adviser has not violated any provisions of securities laws as he was only
stating an opinion and not giving formal advice - CORRECT ANSWER - B. Such
statements may not be made since they imply a specific performance of a security
for which advice is being given
- An adviser may not make any statement that implies a specific performance
of a security for which advice was given. An adviser may not guarantee a
specific result based on advice given for a portfolio of investments.
HSAs are designed to - CORRECT ANSWER - Help individuals save for qualified
health expenses.
- HSAs help individuals save for qualified out-of-pocket health care expenses
such as the deductible expense from a high deductible health plan
Voluntary withdrawal of registration normally becomes effective:
A. 5 business days after the request has been filed unless an action is pending
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, B. 30 days after filing date or a shorter period as the Administrator may determine
C. On Dec. 31 of the year after the withdrawal request is filed
D. 24 hours after the withdrawal request is received by the Administrator -
CORRECT ANSWER - B. 30 days after filing date or a shorter period as the
Administrator may determine
- Unless an action is pending, voluntary withdrawal becomes effective 30 days
after the filing date or sooner if the Administrator so determines.
An individual set up a trust for herself that will bypass probate, but will allow her
to retain control of the trust assets during her lifetime. What type of trust is it? -
CORRECT ANSWER - Revocable
- Revocable trusts bypass probate but allow for the guarantor to maintain
control of the trust and its assets
Which of the following would be considered a broker/dealer in the state of Maine?
A. An issuer whose corporate headquarters is located in Maine
B. A brokerage firm located in New Hampshire doing business in Maine with
residents of Maine
C. An agent working at a discount brokerage firm located in Maine
D. A brokerage firm with no office in Maine, selling municipal bonds to a bank
located in Maine - CORRECT ANSWER - B. A brokerage firm located in New
Hampshire doing business in Maine with residents of Maine
- A broker/dealer must register under the Uniform Securities Act (USA) in
any state in which it transacts business unless an exemption is available.
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QUESTIONS # 1, SERIES 66- EXAM FX
FINAL QUESTIONS # 2
An agent recommends several securities that he deems suitable for the customer.
The customer rejects all of these recommendations and wants to place an order for
a security that the agent feels is unsuitable. The agent:
A. Is prohibited from executing the order
B. May execute the order, but should obtain a written statement that the order was
unsolicited and the agent did not recommend the security
C. May execute the order only if the client has sufficient funds in the account prior
to placing the order
D. Should execute the order since he is required by law - CORRECT ANSWER -
B. May execute the order, but should obtain a written statement that the order was
unsolicited and the agent did not recommend the security
- The agent may execute the order, but it would be prudent to obtain a written
statement that the order was unsolicited and not recommended by the agent.
Also, the trade ticket should be marked "unsolicited".
Randy is a broker who enjoys doing investment research much more than
prospecting for sales. His friend Any is just the opposite as he loves talking to new
people and hates numbers. They have agreed that Randy will do all the research
work if Andy will send sales Randy's way when possible. Which of the following
is true regarding this relationship?
A. Such a relationship must be tied to a written contract between the broker/dealer
and the advisory firm involved and must be binding for all transactions
1|Page
,B. This form of alliance is considered a unilateral agreement since the broker must
rely on the adviser's goodwill to secure any future compensation
C. This is considered a soft dollar alliance and must be monitored periodically to
avoid the potential for conflicts of interest
D. Randy must file a Form AD-1 with his broker/dealer listing Andy as his
advisory partner for the "mated" transactions - CORRECT ANSWER - C. This is
considered a soft dollar alliance and must be monitored periodically to avoid the
potential for conflicts of interest
- Since this is a soft dollar alliance, the risk of conflict of interest is inherent
regardless of the parties involved and must be monitored for such.
Which of the following best describes regulatory risk?
A. Purchase of a security at an inappropriate time
B. Security falling out of political favor
C. Currency exchange rates affecting foreign investments
D. Changes in law that can potentially affect a security - CORRECT ANSWER -
D. Changes in law that can potentially affect a security
- Regulatory risk, also known as legislative risk, is associated with changes in
law that can potentially affect a security, an industry or a country
Sector rotating is: - CORRECT ANSWER - Adjusting a portfolio allocation based
on economic conditions.
- Sector rotating involves moving a portfolio's allocation from one sector to
another based on economic conditions or seasonal trends
2|Page
,An investment adviser has identified what he perceives to be an excellent
investment opportunity for some of his client. He made calls to the selected clients
and told them that he believes that the investment will have over 12% return this
year and recommended they invest. Which of the following is true concerning the
adviser's statement?
A. This is considered an example of an adviser doing performance research which
is part of the advisory services contract
B. Such statements may not be made since they imply a specific performance of a
security for which advice is being given
C. The advisor may not make this kind of statement to his clients unless it is part of
a portfolio of investments and not a single security
D. The adviser has not violated any provisions of securities laws as he was only
stating an opinion and not giving formal advice - CORRECT ANSWER - B. Such
statements may not be made since they imply a specific performance of a security
for which advice is being given
- An adviser may not make any statement that implies a specific performance
of a security for which advice was given. An adviser may not guarantee a
specific result based on advice given for a portfolio of investments.
HSAs are designed to - CORRECT ANSWER - Help individuals save for qualified
health expenses.
- HSAs help individuals save for qualified out-of-pocket health care expenses
such as the deductible expense from a high deductible health plan
Voluntary withdrawal of registration normally becomes effective:
A. 5 business days after the request has been filed unless an action is pending
3|Page
, B. 30 days after filing date or a shorter period as the Administrator may determine
C. On Dec. 31 of the year after the withdrawal request is filed
D. 24 hours after the withdrawal request is received by the Administrator -
CORRECT ANSWER - B. 30 days after filing date or a shorter period as the
Administrator may determine
- Unless an action is pending, voluntary withdrawal becomes effective 30 days
after the filing date or sooner if the Administrator so determines.
An individual set up a trust for herself that will bypass probate, but will allow her
to retain control of the trust assets during her lifetime. What type of trust is it? -
CORRECT ANSWER - Revocable
- Revocable trusts bypass probate but allow for the guarantor to maintain
control of the trust and its assets
Which of the following would be considered a broker/dealer in the state of Maine?
A. An issuer whose corporate headquarters is located in Maine
B. A brokerage firm located in New Hampshire doing business in Maine with
residents of Maine
C. An agent working at a discount brokerage firm located in Maine
D. A brokerage firm with no office in Maine, selling municipal bonds to a bank
located in Maine - CORRECT ANSWER - B. A brokerage firm located in New
Hampshire doing business in Maine with residents of Maine
- A broker/dealer must register under the Uniform Securities Act (USA) in
any state in which it transacts business unless an exemption is available.
4|Page
