Series 65 Exam questions Source Pass
The Exam
All of the following securities would typically be found in a money market mutual fund except:
A. Commercial paper
B. T-bills
C. Bankers acceptances
D. Treasury bonds - correct answer ✔✔D. Look for short term debt securities. Treasury bonds or 10 to 30
year maturities
Which of the following represents the least exposure to loss of principle?
A. Highly rated commercial paper
B. Bankers acceptances
C. $1,000,000 Certificate of Deposit
D. $3,000,000 treasury bill - correct answer ✔✔D. You have to go with the US treasury for providing the
safest investment
If the yield curve is inverted, which of the following trades at the highest yield?
A. T-bills
B. T-notes
C. T-Bonds
D. Intermediate term municipal bonds - correct answer ✔✔A. T-bills are short term debt securities
The consumer price index is used to
,A. Predict the direction of long-term interest rates
B. Measure inflation
C. Determine short-term financing rates
D. Establish intermediate term rates on international business loans - correct answer ✔✔Be the CPI
measures inflation/deflation
Which of the following best expresses the Federal Reserve Board's role in shaping economic policy?
A. They establish long-term interest rates used by mortgage lenders
B. They negotiate more attractive interest rates for low income home purchasers
C. Through monetary policy they raise and lower short-term interest rates
D. They write tax policy - correct answer ✔✔C. The Fed can control short-term rates, but has little
control over the long term such as mortgage rates
All of the following are lagging economic indicators except for
A. Inventory
B. Corporate profits
C. Average weekly hours worked by manufacturing employees
D. Prime rate - correct answer ✔✔C.
And economic slump would be associated with which of the following?
A. Rising unemployment, inflation, rising interest rates
B. Falling on employment, inflation, rising interest rates
C. Rising unemployment, falling GDP, falling interest rates
D. Falling unemployment, deflation, rising GDP - correct answer ✔✔C. In a text book perfect economic
slump, interest rates would drop as people are being laid off and if the economy is stagnating
All the following are considered leading indicators except for
,A. S&P 500 index
B. Building permits
C. Claims for unemployment
D. Inventory levels - correct answer ✔✔D. Inventory levels
Which of the following equals a company's working capital?
A. Total liabilities divided by total assets
B. Current assets divided by current liabilities
C. Current liabilities subtracted from current assets
D. Long-term assets minus net-debt - correct answer ✔✔C. The answer is the reverse of how normal
people would define it, which makes it a perfect Series 65 question
Which of the following would increase a company's net profit margin?
A. Increase in cost of goods sold
B. Increase in interest expense
C. Decrease in depreciation
D. Increase in depreciation - correct answer ✔✔C. Depreciation is a subtraction that lowers reported net
income
Which of the following best describes the price to earnings ratio?
A. It is a tool for credit analysis
B. Ever flex how richly investors value a company's Profitability as reflected in the market price for stock
C. It is the inverse of dividend yield
D. It reflects the rate of increase in the stock market price - correct answer ✔✔B. Growth stocks trade at
a high price to earnings ratio while value stocks trade at Lower ratios. Growth stocks, reflect more
enthusiasm for the company's earnings/profits in value stocks
, A head and shoulders bottom formation is a
I. Bearish indicator
II. Bullish indicator
III. Reversal of an uptrend
IV. Reversal of a downtrend
A. I, IV
B. II, IV
C. I, III
D. II, III - correct answer ✔✔B. The head and shoulders pattern is always a reversal on the exam. If the
reversal is at the bottom, the downtrend must be ending, with a bull market up ahead.
The 200 - day moving average is
A. Contrarian indicator
B. Helpful inspiring trends
C. Primary tool a fundamental analysis
D. Use primarily an interest rate analysis - correct answer ✔✔B. Associate moving average with "trends
"and "technical analysis "
An investment's market value decreases from $10 to $8.50 over Q1. The investment's annuals return
rate of return is...? - correct answer ✔✔60% annualized
XYZ common stock pays quarterly dividend of $.75 one of your investors purchase the stock at $50 at the
beginning of Q3. If the stock trades for $49 at the end of Q3, what is your investors annualized rate of
return? - correct answer ✔✔An annualized rate of return of -2%
One of your clients purchased a GE 5S debenture of '17 @96.375. What is the current yield? - correct
answer ✔✔Current yield equals 5.2%
The Exam
All of the following securities would typically be found in a money market mutual fund except:
A. Commercial paper
B. T-bills
C. Bankers acceptances
D. Treasury bonds - correct answer ✔✔D. Look for short term debt securities. Treasury bonds or 10 to 30
year maturities
Which of the following represents the least exposure to loss of principle?
A. Highly rated commercial paper
B. Bankers acceptances
C. $1,000,000 Certificate of Deposit
D. $3,000,000 treasury bill - correct answer ✔✔D. You have to go with the US treasury for providing the
safest investment
If the yield curve is inverted, which of the following trades at the highest yield?
A. T-bills
B. T-notes
C. T-Bonds
D. Intermediate term municipal bonds - correct answer ✔✔A. T-bills are short term debt securities
The consumer price index is used to
,A. Predict the direction of long-term interest rates
B. Measure inflation
C. Determine short-term financing rates
D. Establish intermediate term rates on international business loans - correct answer ✔✔Be the CPI
measures inflation/deflation
Which of the following best expresses the Federal Reserve Board's role in shaping economic policy?
A. They establish long-term interest rates used by mortgage lenders
B. They negotiate more attractive interest rates for low income home purchasers
C. Through monetary policy they raise and lower short-term interest rates
D. They write tax policy - correct answer ✔✔C. The Fed can control short-term rates, but has little
control over the long term such as mortgage rates
All of the following are lagging economic indicators except for
A. Inventory
B. Corporate profits
C. Average weekly hours worked by manufacturing employees
D. Prime rate - correct answer ✔✔C.
And economic slump would be associated with which of the following?
A. Rising unemployment, inflation, rising interest rates
B. Falling on employment, inflation, rising interest rates
C. Rising unemployment, falling GDP, falling interest rates
D. Falling unemployment, deflation, rising GDP - correct answer ✔✔C. In a text book perfect economic
slump, interest rates would drop as people are being laid off and if the economy is stagnating
All the following are considered leading indicators except for
,A. S&P 500 index
B. Building permits
C. Claims for unemployment
D. Inventory levels - correct answer ✔✔D. Inventory levels
Which of the following equals a company's working capital?
A. Total liabilities divided by total assets
B. Current assets divided by current liabilities
C. Current liabilities subtracted from current assets
D. Long-term assets minus net-debt - correct answer ✔✔C. The answer is the reverse of how normal
people would define it, which makes it a perfect Series 65 question
Which of the following would increase a company's net profit margin?
A. Increase in cost of goods sold
B. Increase in interest expense
C. Decrease in depreciation
D. Increase in depreciation - correct answer ✔✔C. Depreciation is a subtraction that lowers reported net
income
Which of the following best describes the price to earnings ratio?
A. It is a tool for credit analysis
B. Ever flex how richly investors value a company's Profitability as reflected in the market price for stock
C. It is the inverse of dividend yield
D. It reflects the rate of increase in the stock market price - correct answer ✔✔B. Growth stocks trade at
a high price to earnings ratio while value stocks trade at Lower ratios. Growth stocks, reflect more
enthusiasm for the company's earnings/profits in value stocks
, A head and shoulders bottom formation is a
I. Bearish indicator
II. Bullish indicator
III. Reversal of an uptrend
IV. Reversal of a downtrend
A. I, IV
B. II, IV
C. I, III
D. II, III - correct answer ✔✔B. The head and shoulders pattern is always a reversal on the exam. If the
reversal is at the bottom, the downtrend must be ending, with a bull market up ahead.
The 200 - day moving average is
A. Contrarian indicator
B. Helpful inspiring trends
C. Primary tool a fundamental analysis
D. Use primarily an interest rate analysis - correct answer ✔✔B. Associate moving average with "trends
"and "technical analysis "
An investment's market value decreases from $10 to $8.50 over Q1. The investment's annuals return
rate of return is...? - correct answer ✔✔60% annualized
XYZ common stock pays quarterly dividend of $.75 one of your investors purchase the stock at $50 at the
beginning of Q3. If the stock trades for $49 at the end of Q3, what is your investors annualized rate of
return? - correct answer ✔✔An annualized rate of return of -2%
One of your clients purchased a GE 5S debenture of '17 @96.375. What is the current yield? - correct
answer ✔✔Current yield equals 5.2%
