Series 65
1. Investment Advisory Representative (IAR) - correct answer ✔✔1. Upon passing the series 65 the agent
may represent an registered investment adviser (RIA) and receive fee based compensation. The fee
based compensation may be based on a percentage of the assets under management or as an hourly or
flat fee for providing a personalized financial plan. There are no prerequisites for taking the series 65
exam and the candidate does not need to be sponsored by a FINRA member firm to take the test.
2. The series 66 is the uniform combined state law exam and qualifies a candidate to represent both an
investment adviser and a broker dealer. After passing the series 66 an agent may receive both fee based
compensation for representing an investment adviser and transition based compensation for executing
customer orders. The series 66 is a combination of the series 63 exam and the series 65 exam.
Candidates do not have to be sponsored by a FINRA member firm to take the series 66 exam. However,
the series 7 exam is the co requisite for the series 66 exam and a candidate who has passed the series 66
exam may not conduct any business until they have passed the series 7 exam. All candidates must be
sponsored to take the series 7 exam. If you have passed the series 7 exam and have not taken the series
63 exam, the series 66 may be the right exam to take. Keep in mind that while the series 66 has fewer
questions than the series 65. If you have not passed the series 7 or will not be taking the series 7 exam
you must take the series 65 exam.
the financial effect of making student loan payments for 20 years after graduating from college can be
easily seen - correct answer ✔✔the financial effect of making student loan payments for 20 years after
graduating from college can be easily seen.
For example, a college graduate who owes $60,000 in student loans at 3% interest will have to pay
$332.76 per month for 20 years to get that paid off. If that amount was instead diverted into a Roth IRA
that grows at 6% for that same time period (with no further contributions after 20 years), then the
student would have almost $600,000 of tax-free money by age 65. No poll or study is necessary to see
the enormous impact that student loan debt can have on a borrower's retirement preparedness. (For
more, see: Student Loans: What to Do When You Can't Repay Them.)
Certificate of Deposit (CD) - correct answer ✔✔1. a time deposit at a commercial bank and insured by
the FDIC that restricts holders from withdrawing funds on demand.
2. bears a maturity date ranging from one month to five years at a fixed interest rate and can be issued in
any denomination.
,Negotiable Certificates of Deposit (NCD)
(Jumbo CD) - correct answer ✔✔1. a large certificate of deposit that is typically purchased by
institutional/company investors.
2. Unlike a regular CD, NCDs pay periodic interest, usually twice a year and cannot be cashed in before
reaching maturity, but can be easily sold in the open market before that time.
3. minimum face value of $100,000, but typically are $1 million or more.
Treasury Bills (T-bills) - correct answer ✔✔1. short-term securities that mature in 3-months, 6-months or
1-year.
2. exempt from state and local taxes.
3. purchased at less than par.
4. issued in denominations at $1,000, $5,000, $10,000, $25,000, $50,000, $100,000 and $1 million.
5. all Treasuries are considered to be risk-free (safest investments in the world).
Treasury Notes (T-notes) - correct answer ✔✔1. a maturity between 1 and 10 years.
2. exempt from state and local taxes.
3. purchased at face value and pay out interest payments semi-annually.
4. bought through a bank or directly from US gov't.
5. can be sold in a large secondary market (liquidity).
Treasury Bond (T-Bond) - correct answer ✔✔1. a maturity of more than 10 years.
2. exempt from state and local taxes.
3. purchased at face value and pay out interest payments semi-annually.
4. issued with a minimum denomination of $1,000 and maximum of $5 million.
5. After auction, bonds can be sold in the secondary market.
6. bonds can be bought directly from the government through TreasuryDirect at
http://www.treasurydirect.gov, thereby bypassing a broker.
U.S. Savings Bonds - correct answer ✔✔1. offer a fixed rate of interest over a fixed period of time.
2. not subject to state or local income taxes.
,3. cannot be cashed until at least six months after purchase but maturity varies somewhere between 15
to 30 years.
4. come in 8 values: $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000.
5. purchased directly from the Dept of the Treasury but can be cashed out at most banks.
6. must be an American citizen.
Municipal Bonds - correct answer ✔✔1. are exempt from federal taxes and from most state and local
taxes.
2. issued by a state, municipality or county to finance its capital expenditures (such as the construction
of highways, bridges or schools).
Zero-Coupon Bonds - correct answer ✔✔a type of bond that makes no coupon payments but instead is
issued at a considerable discount to par value.
Brady Bonds - correct answer ✔✔1. are U.S. dollar denominated bonds that were issued by mainly Latin
American countries, with U.S. Government 30 year zero coupon bonds serving
as collateral to ensure payment of the principal.
2. were created in March of 1989 and named for the then U.S. Treasury Secretary, Nicolas Brady.
Yankee Bonds - correct answer ✔✔a bond denominated in U.S. dollars that is publicly issued in the U.S.
by foreign banks and corporations. These bonds must be registered under the Securities Act of
1933 with the SEC before they can be sold.
Individual Retirement Arrangement (IRA), Traditional
[There are several other types of IRAs: Roth SIMPLE and SEP IRAs.] - correct answer ✔✔1. Maximum
contribution of $5,500 ($6,500 if you're age 50 or older), or your taxable compensation if less with excess
contributions taxed at 6% per year as long as they remain in the account.
2. Can make contributions up to age 70 1/2.
3. Contributions may be tax deductible depending on the taxpayer's income, tax filing status and
coverage by an employer-sponsored retirement plan.
, 4. Distributions are taxed as income and any distributions before you age 59½ incur a 10% additional tax
(You generally can make a tax-free withdrawal of contributions if you do it before the due date for filing
your tax return for the year in which you made them).
5. Required Minimum Distributions (RMD's) at age 70 1/2 or a 50% excise tax on the amount not
distributed as required.
(Depending on income, an individual may be able to fit into a lower tax bracket with tax-deductible
contributions during working years and also be in a lower tax bracket during retirement).
Individual Retirement Arrangement (IRA), Traditional
Deduction Limits If You Are NOT Covered by a Retirement Plan at Work (2015) - correct answer ✔✔Full
Deduction
S / HH / QW = any amount
MFJ / MFS (spouse not covered at work) = any amount
MFJ (spouse is covered at work) = $183,000 or less
Partial Deduction
MFJ (spouse is covered at work) = >$183,000 but <$193,000
MFS (spouse is covered at work) = <$10,000
No Deduction
MFJ (spouse is covered at work) = >$193,000
MFS (spouse is covered at work) = $10,000 or more
Individual Retirement Arrangement (IRA), Traditional
Deduction Limits If You Are Covered by a Retirement Plan at Work (2015) - correct answer ✔✔Full
Deduction
S / HH = $61,000 or less
MFJ / QW = $98,000 or less
Partial Deduction
S / HH = >$61,000 but <$71,000
1. Investment Advisory Representative (IAR) - correct answer ✔✔1. Upon passing the series 65 the agent
may represent an registered investment adviser (RIA) and receive fee based compensation. The fee
based compensation may be based on a percentage of the assets under management or as an hourly or
flat fee for providing a personalized financial plan. There are no prerequisites for taking the series 65
exam and the candidate does not need to be sponsored by a FINRA member firm to take the test.
2. The series 66 is the uniform combined state law exam and qualifies a candidate to represent both an
investment adviser and a broker dealer. After passing the series 66 an agent may receive both fee based
compensation for representing an investment adviser and transition based compensation for executing
customer orders. The series 66 is a combination of the series 63 exam and the series 65 exam.
Candidates do not have to be sponsored by a FINRA member firm to take the series 66 exam. However,
the series 7 exam is the co requisite for the series 66 exam and a candidate who has passed the series 66
exam may not conduct any business until they have passed the series 7 exam. All candidates must be
sponsored to take the series 7 exam. If you have passed the series 7 exam and have not taken the series
63 exam, the series 66 may be the right exam to take. Keep in mind that while the series 66 has fewer
questions than the series 65. If you have not passed the series 7 or will not be taking the series 7 exam
you must take the series 65 exam.
the financial effect of making student loan payments for 20 years after graduating from college can be
easily seen - correct answer ✔✔the financial effect of making student loan payments for 20 years after
graduating from college can be easily seen.
For example, a college graduate who owes $60,000 in student loans at 3% interest will have to pay
$332.76 per month for 20 years to get that paid off. If that amount was instead diverted into a Roth IRA
that grows at 6% for that same time period (with no further contributions after 20 years), then the
student would have almost $600,000 of tax-free money by age 65. No poll or study is necessary to see
the enormous impact that student loan debt can have on a borrower's retirement preparedness. (For
more, see: Student Loans: What to Do When You Can't Repay Them.)
Certificate of Deposit (CD) - correct answer ✔✔1. a time deposit at a commercial bank and insured by
the FDIC that restricts holders from withdrawing funds on demand.
2. bears a maturity date ranging from one month to five years at a fixed interest rate and can be issued in
any denomination.
,Negotiable Certificates of Deposit (NCD)
(Jumbo CD) - correct answer ✔✔1. a large certificate of deposit that is typically purchased by
institutional/company investors.
2. Unlike a regular CD, NCDs pay periodic interest, usually twice a year and cannot be cashed in before
reaching maturity, but can be easily sold in the open market before that time.
3. minimum face value of $100,000, but typically are $1 million or more.
Treasury Bills (T-bills) - correct answer ✔✔1. short-term securities that mature in 3-months, 6-months or
1-year.
2. exempt from state and local taxes.
3. purchased at less than par.
4. issued in denominations at $1,000, $5,000, $10,000, $25,000, $50,000, $100,000 and $1 million.
5. all Treasuries are considered to be risk-free (safest investments in the world).
Treasury Notes (T-notes) - correct answer ✔✔1. a maturity between 1 and 10 years.
2. exempt from state and local taxes.
3. purchased at face value and pay out interest payments semi-annually.
4. bought through a bank or directly from US gov't.
5. can be sold in a large secondary market (liquidity).
Treasury Bond (T-Bond) - correct answer ✔✔1. a maturity of more than 10 years.
2. exempt from state and local taxes.
3. purchased at face value and pay out interest payments semi-annually.
4. issued with a minimum denomination of $1,000 and maximum of $5 million.
5. After auction, bonds can be sold in the secondary market.
6. bonds can be bought directly from the government through TreasuryDirect at
http://www.treasurydirect.gov, thereby bypassing a broker.
U.S. Savings Bonds - correct answer ✔✔1. offer a fixed rate of interest over a fixed period of time.
2. not subject to state or local income taxes.
,3. cannot be cashed until at least six months after purchase but maturity varies somewhere between 15
to 30 years.
4. come in 8 values: $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000.
5. purchased directly from the Dept of the Treasury but can be cashed out at most banks.
6. must be an American citizen.
Municipal Bonds - correct answer ✔✔1. are exempt from federal taxes and from most state and local
taxes.
2. issued by a state, municipality or county to finance its capital expenditures (such as the construction
of highways, bridges or schools).
Zero-Coupon Bonds - correct answer ✔✔a type of bond that makes no coupon payments but instead is
issued at a considerable discount to par value.
Brady Bonds - correct answer ✔✔1. are U.S. dollar denominated bonds that were issued by mainly Latin
American countries, with U.S. Government 30 year zero coupon bonds serving
as collateral to ensure payment of the principal.
2. were created in March of 1989 and named for the then U.S. Treasury Secretary, Nicolas Brady.
Yankee Bonds - correct answer ✔✔a bond denominated in U.S. dollars that is publicly issued in the U.S.
by foreign banks and corporations. These bonds must be registered under the Securities Act of
1933 with the SEC before they can be sold.
Individual Retirement Arrangement (IRA), Traditional
[There are several other types of IRAs: Roth SIMPLE and SEP IRAs.] - correct answer ✔✔1. Maximum
contribution of $5,500 ($6,500 if you're age 50 or older), or your taxable compensation if less with excess
contributions taxed at 6% per year as long as they remain in the account.
2. Can make contributions up to age 70 1/2.
3. Contributions may be tax deductible depending on the taxpayer's income, tax filing status and
coverage by an employer-sponsored retirement plan.
, 4. Distributions are taxed as income and any distributions before you age 59½ incur a 10% additional tax
(You generally can make a tax-free withdrawal of contributions if you do it before the due date for filing
your tax return for the year in which you made them).
5. Required Minimum Distributions (RMD's) at age 70 1/2 or a 50% excise tax on the amount not
distributed as required.
(Depending on income, an individual may be able to fit into a lower tax bracket with tax-deductible
contributions during working years and also be in a lower tax bracket during retirement).
Individual Retirement Arrangement (IRA), Traditional
Deduction Limits If You Are NOT Covered by a Retirement Plan at Work (2015) - correct answer ✔✔Full
Deduction
S / HH / QW = any amount
MFJ / MFS (spouse not covered at work) = any amount
MFJ (spouse is covered at work) = $183,000 or less
Partial Deduction
MFJ (spouse is covered at work) = >$183,000 but <$193,000
MFS (spouse is covered at work) = <$10,000
No Deduction
MFJ (spouse is covered at work) = >$193,000
MFS (spouse is covered at work) = $10,000 or more
Individual Retirement Arrangement (IRA), Traditional
Deduction Limits If You Are Covered by a Retirement Plan at Work (2015) - correct answer ✔✔Full
Deduction
S / HH = $61,000 or less
MFJ / QW = $98,000 or less
Partial Deduction
S / HH = >$61,000 but <$71,000
