Series 65 Exam Prep Questions with Correct Answers
Definition of Security Correct Answer-1. Investment of money
2.In a common enterprise
3. With an expectation of profit
4.Results solely from the efforts of others
What are considered securities? Correct Answer-1. Stock
2. Bond
3. Debenture
4. Right or warrant
5. Note
6. Put, call, straddles, privileges on securities or other option
7.Limited Partnership interest
8. Certificate of interest in a profit-sharing agreement
9.Treasury Stock
10. Evidence of indebtedness
11. Collateral Trust certificates
12. Pre-organization certificates or subscriptions
13. Transferable shares
14. Investment Contracts
15. Voting trust certificates
16. Certificate of deposit for a security
,17. Certificate of interest or participation in an oil, gas, or mining title or
lease
What is Not a Security Correct Answer-1. Collectibles
2. Commodities such as precious metals, and grains, including future
contracts
3. Condos used as a personal residence
4. Currency
5. Interest in a retirement plan such as an IRA or Keogh plan
6. An insurance or endowment policy or fixed annuity contract
Prospectus Correct Answer-Any notice, circular, letter or
communication, written or broadcast by radio or television that offers
any security for sale or confirms the sale of a security
Exempted Securities under the Securities Act of 1933 Correct Answer-1.
Any security issued or guaranteed by the US, any state, or any political
subdivision of a state (all fed gov issues and muni securities)
2. Any commercial paper that has a maturity at the time of issuance of
no more than 270 days
3. Any security organized and operating for religious, educational,
benevolent, fraternal or charitable purposes
4. Any interest in railroad company trust
5. Any security issued by federal or state bank (DOES NOT INCLUDE
BANK HOLDING COMPANIES)
,Rule 147 Correct Answer-Exempt under federal law but not under the
Uniform Securities Act so will probably have to register with the state
Rule 147 Issue: Any security offered and sold only to persons resident
within a single state where the issuer of such security is a person resident
and doing business within such a territory.
80/80/80 rule
Exempted Transactions under the Securities Act of 1933 Correct
Answer-Transactions by any person other than the issuer underwriter, or
dealer and
Transactions by an issuer that do not involve a public offering
Registration Statement with the SEC for IPO Correct Answer-Signed by
CEO, CFO, and the majority of the board of directors
Contains the following infromation
1. Purpose of issue
2. Public offering price
3. Underwriter's commissions or discounts
4. Promotion expenses
5. Expected use of the net proceeds of the issue to the company
6. Balance Sheet
7. Earnings statement for the last 3 years
, 8. Names, bios of officer, directors, underwriters and stockholders who
own more than 10% of the outstanding shares
9. Copy of underwriting agrrement
10. Copies of article of incorporation
The Cooling Off Period Correct Answer-Registration can be effective as
early as 20 calendar days after the SEC has received the registration
statement
In this time period, no one can solicit sales but indication of interest can
be solicited with a red herring
SEC Regulation D Rule 506 Private Placement Correct Answer-506(b) -
no advertisement but can have 35 non-accredited investors and unlimited
accredited investors
506(c) permits advertising but only accredited investors and have to
reasonably believe they are accredited by taking reasonable steps
Rule 501 accredited investors Correct Answer-This only applies to
private placement
1. A bank, insurance, or registered investment company
2. An employee benefit plan if the bank, insurance company or
registered investment advisor makes the investment decisions or the plan
has over $5 million in total assets
3. Charitable organizations with assets exceeding $5 mil
4. Directors, executive officers, general partners of the issuer
Definition of Security Correct Answer-1. Investment of money
2.In a common enterprise
3. With an expectation of profit
4.Results solely from the efforts of others
What are considered securities? Correct Answer-1. Stock
2. Bond
3. Debenture
4. Right or warrant
5. Note
6. Put, call, straddles, privileges on securities or other option
7.Limited Partnership interest
8. Certificate of interest in a profit-sharing agreement
9.Treasury Stock
10. Evidence of indebtedness
11. Collateral Trust certificates
12. Pre-organization certificates or subscriptions
13. Transferable shares
14. Investment Contracts
15. Voting trust certificates
16. Certificate of deposit for a security
,17. Certificate of interest or participation in an oil, gas, or mining title or
lease
What is Not a Security Correct Answer-1. Collectibles
2. Commodities such as precious metals, and grains, including future
contracts
3. Condos used as a personal residence
4. Currency
5. Interest in a retirement plan such as an IRA or Keogh plan
6. An insurance or endowment policy or fixed annuity contract
Prospectus Correct Answer-Any notice, circular, letter or
communication, written or broadcast by radio or television that offers
any security for sale or confirms the sale of a security
Exempted Securities under the Securities Act of 1933 Correct Answer-1.
Any security issued or guaranteed by the US, any state, or any political
subdivision of a state (all fed gov issues and muni securities)
2. Any commercial paper that has a maturity at the time of issuance of
no more than 270 days
3. Any security organized and operating for religious, educational,
benevolent, fraternal or charitable purposes
4. Any interest in railroad company trust
5. Any security issued by federal or state bank (DOES NOT INCLUDE
BANK HOLDING COMPANIES)
,Rule 147 Correct Answer-Exempt under federal law but not under the
Uniform Securities Act so will probably have to register with the state
Rule 147 Issue: Any security offered and sold only to persons resident
within a single state where the issuer of such security is a person resident
and doing business within such a territory.
80/80/80 rule
Exempted Transactions under the Securities Act of 1933 Correct
Answer-Transactions by any person other than the issuer underwriter, or
dealer and
Transactions by an issuer that do not involve a public offering
Registration Statement with the SEC for IPO Correct Answer-Signed by
CEO, CFO, and the majority of the board of directors
Contains the following infromation
1. Purpose of issue
2. Public offering price
3. Underwriter's commissions or discounts
4. Promotion expenses
5. Expected use of the net proceeds of the issue to the company
6. Balance Sheet
7. Earnings statement for the last 3 years
, 8. Names, bios of officer, directors, underwriters and stockholders who
own more than 10% of the outstanding shares
9. Copy of underwriting agrrement
10. Copies of article of incorporation
The Cooling Off Period Correct Answer-Registration can be effective as
early as 20 calendar days after the SEC has received the registration
statement
In this time period, no one can solicit sales but indication of interest can
be solicited with a red herring
SEC Regulation D Rule 506 Private Placement Correct Answer-506(b) -
no advertisement but can have 35 non-accredited investors and unlimited
accredited investors
506(c) permits advertising but only accredited investors and have to
reasonably believe they are accredited by taking reasonable steps
Rule 501 accredited investors Correct Answer-This only applies to
private placement
1. A bank, insurance, or registered investment company
2. An employee benefit plan if the bank, insurance company or
registered investment advisor makes the investment decisions or the plan
has over $5 million in total assets
3. Charitable organizations with assets exceeding $5 mil
4. Directors, executive officers, general partners of the issuer
