SERIES 66 FINAL 1 COMPLETE
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS LATEST
UPDATE 2025/2026
Which of the following BEST defines the term "finder" in securities markets?
A. Individuals who attempt to find potential investors for private companies.
B. Unregistered individuals who solicit investment advisory services.
C. A broker-dealer that clears and settles stock market transactions.
D. An attorney who refers illegal activity to the state Administrator(s). -
CORRECT ANSWER - Individuals who attempt to find potential investors for
private companies.
Finders are individuals who attempt to find buyers for privately held firms
that are selling securities in a private placement. Finders often work with
larger investment banks to sell private placements.
A client purchases an equity-indexed annuity contract that guarantees a 4% return
or 80% of the performance of the S&P 500, whichever is greater. The index
declines over the course of the next year. What return will your client receive? -
CORRECT ANSWER - 4%
An equity-indexed annuity guarantees the contract owner a minimum interest
rate or the performance of a stock index such as the S&P 500 Index. If the
return on this index is less than the guaranteed rate, the owner receives the
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,guaranteed rate. If the index return is greater than the guarantee, the owner
receives the greater return.
Which of the following statements is TRUE regarding digital assets?
A. Digital assets are exempt from registration with state Administrator(s).
B. All digital assets are securities.
C. Digital assets are exempt from the anti-fraud provisions of the USA.
D. Some digital assets are securities. - CORRECT ANSWER - Some digital assets
are securities.
NASAA's Model Rule on Unethical Business Practices of Investment Advisers,
Investment Adviser Representatives, and Federal Covered Advisers states that any
fee arrangement based on capital gains or portfolio appreciation may only be used
if which of the following disclosures is made in writing?
A. That the arrangement may cause the adviser to recommend strategies that
encourage a client to take greater-than-normal risks
B. That the arrangement always leads to lower fees over a long period
C. That the arrangement never results in excessive fees
D. The adviser must abstain from any such arrangement because the conflict of
interest is too great - CORRECT ANSWER - That the arrangement may cause the
adviser to recommend strategies that encourage a client to take greater-than-normal
risks.
Approximately 15 years ago, a client signed an agreement that provided his wife
with power of attorney over his account. The agreement also stated that, in the
event his wife dies, his investment adviser will be named as power of attorney.
Which of the following statements about this arrangement is TRUE?
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,A. This is considered a durable power of attorney.
B. This arrangement is prohibited since a person cannot provide two agents with
power of attorney.
C. The client's wife and IA are considered consecutive agents.
D. Investment advisers are never permitted to accept power of attorney from a
client. - CORRECT ANSWER - The client's wife and IA are considered
consecutive agents.
According to the Investment Advisers Act of 1940, when must an access person
submit a transaction report?
A. No later than 10 days after the end of the calendar quarter in which the
transaction was effected
B. Promptly
C. No later than 30 days after the end of each calendar quarter
D. Within 90 days of the end of the adviser's fiscal year - CORRECT ANSWER -
No later than 30 days after the end of each calendar quarter
An agent is bullish on XYZ stock and intends to recommend the stock to three of
her clients. Before the recommendations are made, the agent buys a large block of
XYZ stock for her own account. Then, once the clients' orders are completed, the
RR sells her shares for a large profit. The agent s action is referred to as:
A. Pegging
B. Making unsuitable recommendations
C. Front-running
D. A wash sale - CORRECT ANSWER - Front-running
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, The disadvantages of hedge funds for investors include all of the following
choices, EXCEPT:
A. Lack of liquidity
B. Lack of transparency
C. Sophisticated investment strategies
D. Complicated tax structures - CORRECT ANSWER - Sophisticated investment
strategies
Which types of investments have historically shown a great deal of exposure to
regulatory risk?
A. Limited partnerships
B. Corporate bonds
C. Common stocks
D. Variable annuities - CORRECT ANSWER - Limited partnerships
Which TWO of the following are considered exempt reporting advisers (ERAs)?
I. Venture capital advisers
II. Private fund advisers with assets under management of less than $150 million
III. Family office advisers
IV. Private fund advisers with assets under management exceeding $150 million
A. I and II
B. I and III
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QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS LATEST
UPDATE 2025/2026
Which of the following BEST defines the term "finder" in securities markets?
A. Individuals who attempt to find potential investors for private companies.
B. Unregistered individuals who solicit investment advisory services.
C. A broker-dealer that clears and settles stock market transactions.
D. An attorney who refers illegal activity to the state Administrator(s). -
CORRECT ANSWER - Individuals who attempt to find potential investors for
private companies.
Finders are individuals who attempt to find buyers for privately held firms
that are selling securities in a private placement. Finders often work with
larger investment banks to sell private placements.
A client purchases an equity-indexed annuity contract that guarantees a 4% return
or 80% of the performance of the S&P 500, whichever is greater. The index
declines over the course of the next year. What return will your client receive? -
CORRECT ANSWER - 4%
An equity-indexed annuity guarantees the contract owner a minimum interest
rate or the performance of a stock index such as the S&P 500 Index. If the
return on this index is less than the guaranteed rate, the owner receives the
1|Page
,guaranteed rate. If the index return is greater than the guarantee, the owner
receives the greater return.
Which of the following statements is TRUE regarding digital assets?
A. Digital assets are exempt from registration with state Administrator(s).
B. All digital assets are securities.
C. Digital assets are exempt from the anti-fraud provisions of the USA.
D. Some digital assets are securities. - CORRECT ANSWER - Some digital assets
are securities.
NASAA's Model Rule on Unethical Business Practices of Investment Advisers,
Investment Adviser Representatives, and Federal Covered Advisers states that any
fee arrangement based on capital gains or portfolio appreciation may only be used
if which of the following disclosures is made in writing?
A. That the arrangement may cause the adviser to recommend strategies that
encourage a client to take greater-than-normal risks
B. That the arrangement always leads to lower fees over a long period
C. That the arrangement never results in excessive fees
D. The adviser must abstain from any such arrangement because the conflict of
interest is too great - CORRECT ANSWER - That the arrangement may cause the
adviser to recommend strategies that encourage a client to take greater-than-normal
risks.
Approximately 15 years ago, a client signed an agreement that provided his wife
with power of attorney over his account. The agreement also stated that, in the
event his wife dies, his investment adviser will be named as power of attorney.
Which of the following statements about this arrangement is TRUE?
2|Page
,A. This is considered a durable power of attorney.
B. This arrangement is prohibited since a person cannot provide two agents with
power of attorney.
C. The client's wife and IA are considered consecutive agents.
D. Investment advisers are never permitted to accept power of attorney from a
client. - CORRECT ANSWER - The client's wife and IA are considered
consecutive agents.
According to the Investment Advisers Act of 1940, when must an access person
submit a transaction report?
A. No later than 10 days after the end of the calendar quarter in which the
transaction was effected
B. Promptly
C. No later than 30 days after the end of each calendar quarter
D. Within 90 days of the end of the adviser's fiscal year - CORRECT ANSWER -
No later than 30 days after the end of each calendar quarter
An agent is bullish on XYZ stock and intends to recommend the stock to three of
her clients. Before the recommendations are made, the agent buys a large block of
XYZ stock for her own account. Then, once the clients' orders are completed, the
RR sells her shares for a large profit. The agent s action is referred to as:
A. Pegging
B. Making unsuitable recommendations
C. Front-running
D. A wash sale - CORRECT ANSWER - Front-running
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, The disadvantages of hedge funds for investors include all of the following
choices, EXCEPT:
A. Lack of liquidity
B. Lack of transparency
C. Sophisticated investment strategies
D. Complicated tax structures - CORRECT ANSWER - Sophisticated investment
strategies
Which types of investments have historically shown a great deal of exposure to
regulatory risk?
A. Limited partnerships
B. Corporate bonds
C. Common stocks
D. Variable annuities - CORRECT ANSWER - Limited partnerships
Which TWO of the following are considered exempt reporting advisers (ERAs)?
I. Venture capital advisers
II. Private fund advisers with assets under management of less than $150 million
III. Family office advisers
IV. Private fund advisers with assets under management exceeding $150 million
A. I and II
B. I and III
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