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  3. SERIES 66

FINRA SERIES 66 Exam (page: 6)
FINRA Series66 (Series66) NASD Series 66
Updated on: 15-Feb-2026

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SERIES 66 PDF 251 Questions

Which of the following people would not qualify for a 403(b) retirement plan?

  1. A volunteer for a non-profit organization
  2. A school teacher
  3. St. Anthony''s Church
  4. A school janitor

Answer(s): A

Explanation:

403(b) retirement plans allow for tax-deferred retirement savings for tax-exempt, non-profit organizations, such as public school systems and churches. The volunteer is not specified as an employee of either so we'd have to assume this person would not qualify



Mr and Mrs Rodriguez have amassed a very comfortable income from their import business, which has been formed as a limited liability company (LLC). They seek advice from their financial advisor regarding a new investment that would simultaneously act as a tax shelter, which they hope will allow them to have more money to leave to their heirs.
Which two of the following should their advisor consider when making a suitable recommendation to the Rodriguez couple?

  1. Tax Situation
    II. Heirs
    III. Cash Flow
    IV. Executor of Estate
  2. General Partnership
  3. III and IV
  4. I and V
  5. II and IV
  6. I and III

Answer(s): D

Explanation:

When determining a suitable investment, it is important to understand the client's current financial situation. A profile should be taken of the current income, cash flow, company balance sheet, current tax situation, net worth, amount of liquidity and the investment strategy currently in place. The Rodriguez couple has a specific goal in mind: to shelter their income from income tax. Of the choices listed, cash flow and current tax situation are the only possible correct answers. For this particular goal, the heirs or the executor of the estate are not relevant factors. The Rodriguez's business is a limited liability company (LLC) and not a general partnership, which is structured differently than an LLC



Mrs Struthers consults Felix, her financial advisor, about his best recommendation for preserving the money she has saved for retirement.
Which of the following represent suitable investments?

  1. T-Bills and Corporate Bonds
  2. Hedge Funds and Common Stock
  3. Zero Coupon Bonds and Common Stock
  4. Hedge Funds and T-Bills

Answer(s): A

Explanation:

Treasury securities are guaranteed by the federal government and corporate bond holders receive priority over common stockholders in the event of a bankruptcy. These would be the two safest choices for preservation of capital. Hedge funds are high-risk, potentially high- yield investments that aim for growth



When evaluating an individual''s current financial status, liquid net worth would be identified as:

  1. The same as total net worth
  2. Assets held in checking, savings and money-market accounts
  3. Real property and other tangible assets
  4. Assets that can be easily converted into cash

Answer(s): D

Explanation:

Total net worth is defined as all assets minus all liabilities. Liquid net worth is all assets that can be easily converted into cash. Checking, savings and money-market accounts can be easily converted into cash, along with other assets like equities and securities



Randy McMahon, agent for Jansen Securities, calls his prospective client, Celia, and suggests she open an account so she can purchase a hot stock they''ve been discussing. Two days later, Celia calls Randy and agrees to open the account. This transaction is an example of:

  1. A sale
  2. Private placement
  3. An offer
  4. Cross-agency transaction

Answer(s): C

Explanation:

One of the factors that determines whether a state administrator has jurisdiction over a particular situation may depend on whether an offer or sale has been made. In this case, when Randy called Celia, he made an offer to sell her securities, which brought the activity under the administrator's jurisdiction.



Mrs Daley has just met with her registered investment advisor, Keith Maylor, and opened a new account that she is very excited about. She likes to trade often within the account and feels that she will enjoy major cost savings as a result of the new account structure Keith has set up for her. This is known as:

  1. A wrap fee account
  2. A full disclosure account
  3. A volume discount account
  4. A managed account program

Answer(s): A

Explanation:

Mrs Daley's new wrap fee account will allow her to pay one specified fee for advisory services and the execution of her transactions. With a traditional managed account program, Mrs. Daley was previously charged advisory fees as well as a commission for each transaction



Peterson Jewels plans to offer $200,000 in securities to finance its expansion to two neighboring states; it does not plan to register federally with the SEC. What method of filing is required at the state level?

  1. Filing by coordination
  2. Filing by letter of intent
  3. Registration by qualification
  4. Notification by filing

Answer(s): C

Explanation:

Peterson Jewels will need to register by qualification and, as is the case with most state securities laws, will need to meet certain conditions and provide pertinent, required information to the state administrator. Most small and local companies who do not plan to register with the SEC will register by qualification



Under the Uniform Securities Act, an investment advisor is asked to furnish financial reports as required by:

  1. The Secretary of State
  2. The Governor
  3. The Department of Revenue Services
  4. The state administrator

Answer(s): D

Explanation:

Under the Uniform Securities Act, the state administrator governs the rules and regulations, including the registration and post-registration requirements, of investment advisory professionals



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Jay 9/26/2023 8:00:00 AM

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