SERIES 66 FINAL EXAM-STYLE TESTBANK (60+ MCQS)
AND 100% VERIFIED ANSWERS (2024/25) GRADED A+ /
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1. What is the definition of alpha in portfolio analysis?
A. Risk-adjusted return
B. Market return
C. Return in excess of expected return
D. Standard deviation
Correct Answer: C
Explanation: Alpha measures how much an investment outperforms its expected return,
adjusted for risk.
2. Under the Uniform Securities Act, who must register as an agent?
A. A secretary at a broker-dealer
B. An individual selling exempt securities to institutions
C. A person selling non-exempt securities to retail clients
D. A person placing orders for clients only
Correct Answer: C
Explanation: Agents selling non-exempt securities to non-institutional clients must be
registered.
3. What is the primary purpose of Form ADV Part 2?
A. Register securities
B. Advertise performance
C. Disclose an adviser’s services and conflicts
D. Report firm income
Correct Answer: C
Explanation: Form ADV Part 2 is a brochure that provides disclosure to clients about an
adviser’s services, fees, and conflicts.
,4. What formula calculates the future value of an investment?
A. FV = PV + r
B. FV = PV * (1+r)^n
C. FV = PV / r
D. FV = r * n
Correct Answer: B
Explanation: The compound interest formula calculates future value: FV = PV(1+r)^n.
5. When must an access person file their holdings report under the Investment Advisers Act
of 1940?
A. Within 10 days of becoming an access person
B. Monthly
C. Annually only
D. Within 30 days of the quarter
Correct Answer: A
Explanation: Access persons must file initial holdings within 10 days of access and
annually thereafter.
6. Under the USA, what is required on a client confirmation?
A. Time of trade
B. Date of transaction
C. Margin balance
D. Number of shares held
Correct Answer: B
Explanation: The date must appear on confirmations; time is not mandated.
7. What best describes the “efficient frontier” in Modern Portfolio Theory?
A. Lowest risk portfolios
B. Portfolios with no variance
C. Optimal portfolios offering the best risk-reward ratio
D. Portfolios with negative returns
Correct Answer: C
Explanation: The efficient frontier consists of portfolios that offer the highest return for a
given risk level.
, 8. What is required when an IA sells securities through an affiliated broker-dealer?
A. No disclosure
B. Annual notice
C. ADV II form disclosure and client consent
D. Monthly letter
Correct Answer: C
Explanation: Advisers must disclose affiliated transactions and get written consent from clients.
9. Which strategy hedges systematic risk?
A. Index investing
B. Sector rotation
C. Options
D. Asset allocation
Correct Answer: C
Explanation: Options can protect portfolios from market-wide (systematic) risks.
10. Under Rule 506(b), how many non-accredited investors can participate?
A. None
B. Unlimited
C. 35
D. 10
Correct Answer: C
Explanation: Rule 506(b) allows up to 35 non-accredited but sophisticated investors.
AND 100% VERIFIED ANSWERS (2024/25) GRADED A+ /
GUARANTEED PASS!
1. What is the definition of alpha in portfolio analysis?
A. Risk-adjusted return
B. Market return
C. Return in excess of expected return
D. Standard deviation
Correct Answer: C
Explanation: Alpha measures how much an investment outperforms its expected return,
adjusted for risk.
2. Under the Uniform Securities Act, who must register as an agent?
A. A secretary at a broker-dealer
B. An individual selling exempt securities to institutions
C. A person selling non-exempt securities to retail clients
D. A person placing orders for clients only
Correct Answer: C
Explanation: Agents selling non-exempt securities to non-institutional clients must be
registered.
3. What is the primary purpose of Form ADV Part 2?
A. Register securities
B. Advertise performance
C. Disclose an adviser’s services and conflicts
D. Report firm income
Correct Answer: C
Explanation: Form ADV Part 2 is a brochure that provides disclosure to clients about an
adviser’s services, fees, and conflicts.
,4. What formula calculates the future value of an investment?
A. FV = PV + r
B. FV = PV * (1+r)^n
C. FV = PV / r
D. FV = r * n
Correct Answer: B
Explanation: The compound interest formula calculates future value: FV = PV(1+r)^n.
5. When must an access person file their holdings report under the Investment Advisers Act
of 1940?
A. Within 10 days of becoming an access person
B. Monthly
C. Annually only
D. Within 30 days of the quarter
Correct Answer: A
Explanation: Access persons must file initial holdings within 10 days of access and
annually thereafter.
6. Under the USA, what is required on a client confirmation?
A. Time of trade
B. Date of transaction
C. Margin balance
D. Number of shares held
Correct Answer: B
Explanation: The date must appear on confirmations; time is not mandated.
7. What best describes the “efficient frontier” in Modern Portfolio Theory?
A. Lowest risk portfolios
B. Portfolios with no variance
C. Optimal portfolios offering the best risk-reward ratio
D. Portfolios with negative returns
Correct Answer: C
Explanation: The efficient frontier consists of portfolios that offer the highest return for a
given risk level.
, 8. What is required when an IA sells securities through an affiliated broker-dealer?
A. No disclosure
B. Annual notice
C. ADV II form disclosure and client consent
D. Monthly letter
Correct Answer: C
Explanation: Advisers must disclose affiliated transactions and get written consent from clients.
9. Which strategy hedges systematic risk?
A. Index investing
B. Sector rotation
C. Options
D. Asset allocation
Correct Answer: C
Explanation: Options can protect portfolios from market-wide (systematic) risks.
10. Under Rule 506(b), how many non-accredited investors can participate?
A. None
B. Unlimited
C. 35
D. 10
Correct Answer: C
Explanation: Rule 506(b) allows up to 35 non-accredited but sophisticated investors.
