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Series 65 Sample Questions

Under modern portfolio theory all portfolios should operate:

A) Inside the efficient frontier
B) At least equal to the efficient frontier
C) Outside the efficient frontier only for equities
D) Outside the efficient frontier only for bonds

An individual who is giving advice relating to securities but who is not required to register as an adviser:

A) Must give only non personal advice
B) Is not exempt from the antifraud provisions of the Investment Advisers Act of 1940
C) May not charge more than $199 for an annual subscription for a market letter
D) Is exempt from the antifraud provisions of the Investment Advisers Act of 1940

A decrease in the available credit in a client's account would follow each of the following, except:

A) The open market sale of securities by the Federal Reserve.
B) An increase in the discount rate.
C) A lowering of the margin requirement.
D) An increase in the reserve requirement.

A technical analysis of the market would be based on all of the following, except:

A) New highs and lows.
B) Advances and declines.
C) An in-depth analysis of the 30 stocks in the Dow-Jones Industrial Average.
D) The amount of Dow-Jones Industrial Stocks sold short.

An investment adviser from a neighboring state may direct advice to how many people within the state during a 12 month period and still qualify for the de minimis exemption ?

A) 3
B) 4
C) 5
D) 9

An economist looking at the consumer price index has noticed that is has been consistently rising over the last four quarters. Which of the following is true?

I. Consumer prices are rising
II. Bond yields are falling
III Bond yields are rising
IV. Bond prices are falling

A) I & IV
B) II & IV
C) I & II
D) I, III, & IV

A blue chip exemption is offered to which of the following ?

A) Subordinated debentures of XYZ Corp. XYZ's Common stock is listed on the Pacific Stock Exchange
B) Pre organization certificates
C) US Treasury bonds
D) Commercial paper

Which of the following is the most useful in determining the price volatility of a bond to a significant change in interest rates ?

A) Convexity
B) Duration
C) Sharpe ratio
D) Standard deviation

Regarding cash dividends, which of the following statements is correct?

A) The amount of the dividend may never exceed the current earnings of the corporation.
B) A cash dividend becomes a current liability when it is declared.
C) Dividends are taxed in the same manner as long-term capital gains.
D) Cash dividends must be paid if the earnings for the year exceed the amount of the stated dividend.

As it relates to 3 (C)(7) funds which of the following is not true ?

A) They may change performance based fees
B) They may charge asset based fees
C) Participating corporations must have a net worth of at least $25,000,000
D) They may be offered to investors who invest a minimum of $1,000,000