1
SERIES 65 EXAM STUDY GUIDE
2025/2026 ACCURATE QUESTIONS AND
VERIFIED CORRECT SOLUTIONS WITH
RATIONALES || 100% GUARANTEED PASS
<RECENT VERSION>
Under the Uniform Securities Act, which of the following are defined as sales? -
(ANSWER)A sale is a contract or transaction for value. Therefore, when a security
is given as a bonus in connection with the sale of another security, it is also
considered a sale. Because an assessable stock may require a payment made by
the recipient, the gift is considered a sale. The gift of a non-assessable stock is not
a sale as it is not a contract for value. An offering of securities is not a transaction
or sale of securities until the offer is accepted.
A broker-dealer is NOT considered an investment adviser if the: -
(ANSWER)Excluded from the definition of investment adviser are financial
institutions, publishers, investment adviser representatives, and certain
professionals, including broker-dealers, whose advice is incidental to their
profession and who are not compensated for it.
Under the Investment Advisers Act of 1940, an adviser is required to be registered
with the SEC if: - (ANSWER)Advisers to registered investment companies are
required to be SEC-registered. Under the Advisers Act, as modified by the Dodd-
Frank Act, advisers are exempt from SEC registration if they manage less than
$100 million in assets and have no investment company clients. Persons are
excluded from the Advisers Act definition of investment adviser if they are
publishers of news or business/financial publications of general and regular
circulation or if their advice relates solely to U.S. government securities.
,2
According to North American Securities Administrators Association's (NASAA)
Statement of Policy on Dishonest or Unethical Business Practices of Broker-
Dealers and Agents, which of the following practices is NOT unethical? -
(ANSWER)The THREE A's: Action, Amount, Asset
An agent of a broker-dealer may exercise discretion in deciding the time or the
price at which a sale takes place during the trading day without express written
discretionary authority. Such action is not unethical because time and price are
not considered true discretion. An agent may not exercise discretion over the
number of shares to be sold without prior written discretionary authority. Oral
discretion is only permitted for investment advisers and their representatives,
(never broker-dealers or agents), during the first 10 business days after the initial
discretionary transaction in the account.
Reference: 2.11.5 in the License Exam Manual
An investor in the 28% income tax bracket is considering purchasing either an 8%
municipal bond or a 10% corporate bond. Which of the following regarding the
bonds is TRUE? - (ANSWER)Investors are interested in their return after taxes
(what they get to keep). The 2 bonds must be compared on a tax-equivalent basis.
For example, the tax-equivalent yield of a municipal bond equals tax-free yield
divided by 100% minus tax rate. The tax equivalent rate in this case is .08 ÷ .72
(100% − 28%) = 11.11%. In other words, a client in the 28% tax bracket would
have to invest in a taxable bond that yields 11.11% to get the same after-tax
return that the 8% tax-free bond offers.
Which of the following statements is TRUE about futures and forwards? -
(ANSWER)Futures contracts are traded on exchanges and, therefore, have
,3
standardized terms. In forwards, the terms of each contract are separately
negotiated.
Reference: 9.2.1 in the License Exam Manual
George and Martha Washington are both in their mid-70s, very active in their
community, and both work part-time at the local community bank. They would
like to contribute a small portion of their earnings to some form of retirement
plan. Which of the following choices would be the most appropriate for this
couple? - (ANSWER)One of the distinguishing characteristics of the Roth IRA is
that contributions may be continued past age 70 ½ as long as the participant has
earned income.
Reference: 20.1.2.1 in the License Exam Manual
An employee is offered a non-qualified stock option with an exercise price of $20
per share. If the option is exercised when the current market value of the stock is
$30, the employee: - (ANSWER)In the case of NSOs, the difference between the
exercise (or strike) price and the current market value is considered salary to the
employee.
Reference: 4.1.8 in the License Exam Manual
MaryBeth is an agent with QuickTrade Securities, a subsidiary of QuickLoan
Bankcorp, a holding company that also owns QuickIssue Capital Markets, an
underwriter specializing in bringing new issues to market. Under the NASAA
Statement of Policy on Dishonest or Unethical Business Practices of Broker-
Dealers and Agents, MaryBeth would be permitted to split commissions resulting
from securities transactions with any of the following individuals EXCEPT -
(ANSWER)Under the NASAA Policy, in order to split commissions, both individuals
must be licensed as agents with either the same broker-dealer, or ones under
, 4
common control (ownership). What about sharing with your principal? Why not?
In fact, many managers (principals) have commission overrides as a fundamental
part of their compensation package. Remember, as we state in your License Exam
Manual, under the Uniform Securities Act, there is no separate principal
registration as there is with FINRA; all principals are registered as agents (or IARs
as the case may be), just the same as you.
Reference: 2.11.26.4 in the License Exam Manual
Among the differences between C corporations and S corporations is: -
(ANSWER)Unlike C corporations, there is a limit placed on the number of
shareholders in an S corp. At the time of this printing, that maximum is 100, none
of whom may be a non-resident alien (C corps have no residency restrictions). The
primary practical difference is the fact that S corporation earnings (and losses)
flow through to the shareholders, whereas C corporation earnings are only
received by shareholders when dividends are paid.
Reference: 14.3.6 in the License Exam Manual
Under the Uniform Securities Act, an investment adviser who has custody of
client securities or funds must do which of the following? - (ANSWER)The adviser
must send clients quarterly, itemized statements listing the funds and securities in
the adviser's custody at the end of the period and all transactions during the
period. Unless using a qualified custodian, the adviser must deposit client funds
into one or more bank accounts, not commingled with adviser funds, and notify
the clients in writing of where and in what manner the funds are held. The adviser
must also arrange for an annual, surprise audit by an independent public
accountant of client funds and securities. The adviser must notify the
Administrator that the adviser has or may have custody of client securities or
funds.
Reference: 3.11 in the License Exam Manual
SERIES 65 EXAM STUDY GUIDE
2025/2026 ACCURATE QUESTIONS AND
VERIFIED CORRECT SOLUTIONS WITH
RATIONALES || 100% GUARANTEED PASS
<RECENT VERSION>
Under the Uniform Securities Act, which of the following are defined as sales? -
(ANSWER)A sale is a contract or transaction for value. Therefore, when a security
is given as a bonus in connection with the sale of another security, it is also
considered a sale. Because an assessable stock may require a payment made by
the recipient, the gift is considered a sale. The gift of a non-assessable stock is not
a sale as it is not a contract for value. An offering of securities is not a transaction
or sale of securities until the offer is accepted.
A broker-dealer is NOT considered an investment adviser if the: -
(ANSWER)Excluded from the definition of investment adviser are financial
institutions, publishers, investment adviser representatives, and certain
professionals, including broker-dealers, whose advice is incidental to their
profession and who are not compensated for it.
Under the Investment Advisers Act of 1940, an adviser is required to be registered
with the SEC if: - (ANSWER)Advisers to registered investment companies are
required to be SEC-registered. Under the Advisers Act, as modified by the Dodd-
Frank Act, advisers are exempt from SEC registration if they manage less than
$100 million in assets and have no investment company clients. Persons are
excluded from the Advisers Act definition of investment adviser if they are
publishers of news or business/financial publications of general and regular
circulation or if their advice relates solely to U.S. government securities.
,2
According to North American Securities Administrators Association's (NASAA)
Statement of Policy on Dishonest or Unethical Business Practices of Broker-
Dealers and Agents, which of the following practices is NOT unethical? -
(ANSWER)The THREE A's: Action, Amount, Asset
An agent of a broker-dealer may exercise discretion in deciding the time or the
price at which a sale takes place during the trading day without express written
discretionary authority. Such action is not unethical because time and price are
not considered true discretion. An agent may not exercise discretion over the
number of shares to be sold without prior written discretionary authority. Oral
discretion is only permitted for investment advisers and their representatives,
(never broker-dealers or agents), during the first 10 business days after the initial
discretionary transaction in the account.
Reference: 2.11.5 in the License Exam Manual
An investor in the 28% income tax bracket is considering purchasing either an 8%
municipal bond or a 10% corporate bond. Which of the following regarding the
bonds is TRUE? - (ANSWER)Investors are interested in their return after taxes
(what they get to keep). The 2 bonds must be compared on a tax-equivalent basis.
For example, the tax-equivalent yield of a municipal bond equals tax-free yield
divided by 100% minus tax rate. The tax equivalent rate in this case is .08 ÷ .72
(100% − 28%) = 11.11%. In other words, a client in the 28% tax bracket would
have to invest in a taxable bond that yields 11.11% to get the same after-tax
return that the 8% tax-free bond offers.
Which of the following statements is TRUE about futures and forwards? -
(ANSWER)Futures contracts are traded on exchanges and, therefore, have
,3
standardized terms. In forwards, the terms of each contract are separately
negotiated.
Reference: 9.2.1 in the License Exam Manual
George and Martha Washington are both in their mid-70s, very active in their
community, and both work part-time at the local community bank. They would
like to contribute a small portion of their earnings to some form of retirement
plan. Which of the following choices would be the most appropriate for this
couple? - (ANSWER)One of the distinguishing characteristics of the Roth IRA is
that contributions may be continued past age 70 ½ as long as the participant has
earned income.
Reference: 20.1.2.1 in the License Exam Manual
An employee is offered a non-qualified stock option with an exercise price of $20
per share. If the option is exercised when the current market value of the stock is
$30, the employee: - (ANSWER)In the case of NSOs, the difference between the
exercise (or strike) price and the current market value is considered salary to the
employee.
Reference: 4.1.8 in the License Exam Manual
MaryBeth is an agent with QuickTrade Securities, a subsidiary of QuickLoan
Bankcorp, a holding company that also owns QuickIssue Capital Markets, an
underwriter specializing in bringing new issues to market. Under the NASAA
Statement of Policy on Dishonest or Unethical Business Practices of Broker-
Dealers and Agents, MaryBeth would be permitted to split commissions resulting
from securities transactions with any of the following individuals EXCEPT -
(ANSWER)Under the NASAA Policy, in order to split commissions, both individuals
must be licensed as agents with either the same broker-dealer, or ones under
, 4
common control (ownership). What about sharing with your principal? Why not?
In fact, many managers (principals) have commission overrides as a fundamental
part of their compensation package. Remember, as we state in your License Exam
Manual, under the Uniform Securities Act, there is no separate principal
registration as there is with FINRA; all principals are registered as agents (or IARs
as the case may be), just the same as you.
Reference: 2.11.26.4 in the License Exam Manual
Among the differences between C corporations and S corporations is: -
(ANSWER)Unlike C corporations, there is a limit placed on the number of
shareholders in an S corp. At the time of this printing, that maximum is 100, none
of whom may be a non-resident alien (C corps have no residency restrictions). The
primary practical difference is the fact that S corporation earnings (and losses)
flow through to the shareholders, whereas C corporation earnings are only
received by shareholders when dividends are paid.
Reference: 14.3.6 in the License Exam Manual
Under the Uniform Securities Act, an investment adviser who has custody of
client securities or funds must do which of the following? - (ANSWER)The adviser
must send clients quarterly, itemized statements listing the funds and securities in
the adviser's custody at the end of the period and all transactions during the
period. Unless using a qualified custodian, the adviser must deposit client funds
into one or more bank accounts, not commingled with adviser funds, and notify
the clients in writing of where and in what manner the funds are held. The adviser
must also arrange for an annual, surprise audit by an independent public
accountant of client funds and securities. The adviser must notify the
Administrator that the adviser has or may have custody of client securities or
funds.
Reference: 3.11 in the License Exam Manual
