Series 65 Exam 1 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Which of the following investment vehicles is/are not considered a security under the Securities
Act of 1933?
I. US Government Bond
II. Annuities with fixed rates of returns
III. Commercial paper maturing in fewer than 270 days
IV. Common stock issued and sold intrastate
A) I, II, and III only
B) II only
C) I and II only
D) I, II, III, and IV - CORRECT ANSWER - B) II only
When a customer sells shares in one fund and then simultaneously buy shares in a different fund
within the same family, the IRS considers this a:
A) tax-deferred event if a gain is incurred
B) taxable event
C) wash sale
D) nontaxable even if a loss is incurred - CORRECT ANSWER -
A 57-year-old investor who earns $26,000 contributes $6,000 to his IRA for the year 2014. What
amount of the contribution will be subject to the 6% penalty levied on excess contributions?
A) $1,000
B) $0
C) $6,000
, D) $500 - CORRECT ANSWER - C) $6,000
In the Howey decision, the US Supreme Court held that a security must represent:
A) an investment of money in a common enterprise with the exception of profit from the efforts
of the investor
B) an investment of money in a common enterprise with the expectation of profits from the
managerial efforts of others
C) an investment of money in a common enterprise with the hope that dividends will increase
over time based on increased corporate profits
D) debt in a publicly traded corporation whose managers are engaged in commercial activity -
CORRECT ANSWER - B) an investment of money in a common enterprise with the
expectation of profits from the managerial efforts of others
Providing liquidity in the over-the-counter (OTC) market is the primary function of:
A) the specialist
B) floor brokers
C) two-dollar brokers
D) market makers - CORRECT ANSWER - D) Market maker
The school of economic thought that believes that government intervention in the form of taxes
and spending is the best method to control the economy is called:
A) Laissez-faire
B) Monetarist
C) Keynesian
D) Supply-side - CORRECT ANSWER - C) Keynesian
Exam Questions and CORRECT Answers
Which of the following investment vehicles is/are not considered a security under the Securities
Act of 1933?
I. US Government Bond
II. Annuities with fixed rates of returns
III. Commercial paper maturing in fewer than 270 days
IV. Common stock issued and sold intrastate
A) I, II, and III only
B) II only
C) I and II only
D) I, II, III, and IV - CORRECT ANSWER - B) II only
When a customer sells shares in one fund and then simultaneously buy shares in a different fund
within the same family, the IRS considers this a:
A) tax-deferred event if a gain is incurred
B) taxable event
C) wash sale
D) nontaxable even if a loss is incurred - CORRECT ANSWER -
A 57-year-old investor who earns $26,000 contributes $6,000 to his IRA for the year 2014. What
amount of the contribution will be subject to the 6% penalty levied on excess contributions?
A) $1,000
B) $0
C) $6,000
, D) $500 - CORRECT ANSWER - C) $6,000
In the Howey decision, the US Supreme Court held that a security must represent:
A) an investment of money in a common enterprise with the exception of profit from the efforts
of the investor
B) an investment of money in a common enterprise with the expectation of profits from the
managerial efforts of others
C) an investment of money in a common enterprise with the hope that dividends will increase
over time based on increased corporate profits
D) debt in a publicly traded corporation whose managers are engaged in commercial activity -
CORRECT ANSWER - B) an investment of money in a common enterprise with the
expectation of profits from the managerial efforts of others
Providing liquidity in the over-the-counter (OTC) market is the primary function of:
A) the specialist
B) floor brokers
C) two-dollar brokers
D) market makers - CORRECT ANSWER - D) Market maker
The school of economic thought that believes that government intervention in the form of taxes
and spending is the best method to control the economy is called:
A) Laissez-faire
B) Monetarist
C) Keynesian
D) Supply-side - CORRECT ANSWER - C) Keynesian
