STC Series 66 Final Exams 7, 8, 9, 10,
11 Questions and Answers 100% Pass
According to the Securities Exchange Act of 1934, which of the following is NOT
required to be included on the confirmation for a bond trade? - ANSWER✔✔-
Disclosure of the bond's rating
Although a bond's rating is not required to be included on a confirmation, if the bond is
unrated, this fact must be disclosed. A bond's price and its yield-to-maturity at the time
of the trade must be disclosed on a confirmation.
A registered investment adviser is normally required to post a surety bond to satisfy the
Uniform Securities Act requirements. Under which TWO of the following conditions
could this requirement be waived?
The investment adviser does not maintain custody of client assets.
The investment adviser has a net worth of $35,000.
The investment adviser is a subsidiary of a broker-dealer.
The investment adviser maintains custody of customer assets. - ANSWER✔✔-I and II
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 1/233
,If an investment adviser does not maintain custody of client assets A N D has a
minimum net worth of $35,000, the surety bonding requirement could be waived by the
Administrator.
Which of the following is NOT an option exercise style? - ANSWER✔✔-Uncovered
Uncovered is a term that relates to an option position or strategy that investors may
employ and it's in no way connected to an option exercise style. American, European,
and Capped are option exercise styles. American style options allow the owners to
exercise their contracts any time prior to expiration. European style options allow the
owners to exercise their contracts only during a specified period, typically on the
business day of expiration. Capped style options will be exercised automatically if the
value of the underlying security hits or exceeds a specified capped price.
Which of the following items is not included in an income statement? - ANSWER✔✔-
Retained earnings
The income statement for a business will disclose its sales (revenues) less its expenses.
Interest and taxes are both expenses which are reflected on a company's income
statement. However, retained earnings reflects a company's historical earnings and is
found on the company's balance sheet, not its income statement.
Which of the following statements best describes an Administrator's right to examine
the books and records of a broker-dealer? - ANSWER✔✔-Books and records of any
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,broker-dealer registered with the state Administrator may be inspected at any time by
the state administrator
A state Administrator may conduct a surprise inspection at any time. Providing one
day's verbal notice would not be a surprise inspection. It is not necessary to obtain a
court order, or to notify the office of the Administrator in the state in which the broker-
dealer is located.
Which TWO of the following statements are TRUE regarding Subchapter S
Corporations?
Their status is terminated if there are more than 100 shareholders.
They have a federal charter.
Shareholders have unlimited liability.
Income and losses flow through to shareholders. - ANSWER✔✔-I and IV
Subchapter S status is revoked if there are more than 100 shareholders. As with limited
partners, shareholders have limited liability, and income and losses flow through to
shareholders. Subchapter S Corporations have state charters
When does a person become eligible for Social Security benefits? - ANSWER✔✔-After
she's worked 40 quarters (think 40 hour work week)
Social Security eligibility is based on credits that taxpayers earn by working.
Individuals become eligible for Social Security benefits if they have earned 40 credits.
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 3/233
, Taxpayers can earn up to four credits for every year they work (i.e., one per quarter)
and taxpayers become eligible by earning 40 credits. If an individual is earning the
maximum credits per year, she can become eligible after 10 years (4 credits per year x 10
years = 40 credits). Be careful, even if a person has earned enough credits, she cannot
take benefits until she turns age 62.
A client portfolio is invested in a well-diversified group of large-cap stocks. Which of
the following strategies would minimize the market risk connected with this portfolio? -
ANSWER✔✔-Buying puts on a large-cap index
Buying puts is a way to hedge a stock portfolio against market downturns. By buying
puts on a large-cap index, the investor could minimize her losses in the event of a
downturn in the large-cap market. (
A sector rotation strategy would include investing in which of the following? -
ANSWER✔✔-Industrial stocks in an expanding economy
A sector rotation strategy involves investing in businesses that will grow along with the
economy. Industrial stocks are cyclical and will rise and fall with the economy. The best
time to buy technology stocks is right before an expansion, not during a contraction.
Commodities help protect against inflation, but inflation is generally not anticipated if
the market is peaking. Consumer goods companies make staples (e.g., groceries and
household products) and would generally perform well during a recession. (67731)
An Administrator from State A has jurisdiction over an offer made:
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11 Questions and Answers 100% Pass
According to the Securities Exchange Act of 1934, which of the following is NOT
required to be included on the confirmation for a bond trade? - ANSWER✔✔-
Disclosure of the bond's rating
Although a bond's rating is not required to be included on a confirmation, if the bond is
unrated, this fact must be disclosed. A bond's price and its yield-to-maturity at the time
of the trade must be disclosed on a confirmation.
A registered investment adviser is normally required to post a surety bond to satisfy the
Uniform Securities Act requirements. Under which TWO of the following conditions
could this requirement be waived?
The investment adviser does not maintain custody of client assets.
The investment adviser has a net worth of $35,000.
The investment adviser is a subsidiary of a broker-dealer.
The investment adviser maintains custody of customer assets. - ANSWER✔✔-I and II
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 1/233
,If an investment adviser does not maintain custody of client assets A N D has a
minimum net worth of $35,000, the surety bonding requirement could be waived by the
Administrator.
Which of the following is NOT an option exercise style? - ANSWER✔✔-Uncovered
Uncovered is a term that relates to an option position or strategy that investors may
employ and it's in no way connected to an option exercise style. American, European,
and Capped are option exercise styles. American style options allow the owners to
exercise their contracts any time prior to expiration. European style options allow the
owners to exercise their contracts only during a specified period, typically on the
business day of expiration. Capped style options will be exercised automatically if the
value of the underlying security hits or exceeds a specified capped price.
Which of the following items is not included in an income statement? - ANSWER✔✔-
Retained earnings
The income statement for a business will disclose its sales (revenues) less its expenses.
Interest and taxes are both expenses which are reflected on a company's income
statement. However, retained earnings reflects a company's historical earnings and is
found on the company's balance sheet, not its income statement.
Which of the following statements best describes an Administrator's right to examine
the books and records of a broker-dealer? - ANSWER✔✔-Books and records of any
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 2/233
,broker-dealer registered with the state Administrator may be inspected at any time by
the state administrator
A state Administrator may conduct a surprise inspection at any time. Providing one
day's verbal notice would not be a surprise inspection. It is not necessary to obtain a
court order, or to notify the office of the Administrator in the state in which the broker-
dealer is located.
Which TWO of the following statements are TRUE regarding Subchapter S
Corporations?
Their status is terminated if there are more than 100 shareholders.
They have a federal charter.
Shareholders have unlimited liability.
Income and losses flow through to shareholders. - ANSWER✔✔-I and IV
Subchapter S status is revoked if there are more than 100 shareholders. As with limited
partners, shareholders have limited liability, and income and losses flow through to
shareholders. Subchapter S Corporations have state charters
When does a person become eligible for Social Security benefits? - ANSWER✔✔-After
she's worked 40 quarters (think 40 hour work week)
Social Security eligibility is based on credits that taxpayers earn by working.
Individuals become eligible for Social Security benefits if they have earned 40 credits.
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 3/233
, Taxpayers can earn up to four credits for every year they work (i.e., one per quarter)
and taxpayers become eligible by earning 40 credits. If an individual is earning the
maximum credits per year, she can become eligible after 10 years (4 credits per year x 10
years = 40 credits). Be careful, even if a person has earned enough credits, she cannot
take benefits until she turns age 62.
A client portfolio is invested in a well-diversified group of large-cap stocks. Which of
the following strategies would minimize the market risk connected with this portfolio? -
ANSWER✔✔-Buying puts on a large-cap index
Buying puts is a way to hedge a stock portfolio against market downturns. By buying
puts on a large-cap index, the investor could minimize her losses in the event of a
downturn in the large-cap market. (
A sector rotation strategy would include investing in which of the following? -
ANSWER✔✔-Industrial stocks in an expanding economy
A sector rotation strategy involves investing in businesses that will grow along with the
economy. Industrial stocks are cyclical and will rise and fall with the economy. The best
time to buy technology stocks is right before an expansion, not during a contraction.
Commodities help protect against inflation, but inflation is generally not anticipated if
the market is peaking. Consumer goods companies make staples (e.g., groceries and
household products) and would generally perform well during a recession. (67731)
An Administrator from State A has jurisdiction over an offer made:
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 4/233
