Wiley Series 66 Securities Licensing Exam Review 2020 + Test Bank The Uniform Combined State Law Examination

The go-to guide to acing the Series 66 Exam!

Passing the Uniform Combined State Law Examination (Series 66) qualifies an individual to represent both a broker-dealer and an investment adviser. It covers such topics as client investment strategies and ethical business practices. Taken as a corequisite with the Series 7 Exam, candidates must complete the Series 66 Exam in order to register as an agent with a state securities administrator.

Created by the experts at The Securities Institute of America, Inc., Wiley Series 66 Exam Review 2020 arms you with what you need to score high on this tough 100-question test. Designed to help you build and fine-tune your knowledge of all areas covered in the exam and to guarantee that you're prepared mentally and strategically to take the test, it provides:

• Dozens of examples
• Assorted practice questions for each subject area covered in the exam
• Priceless test-taking tips and strategies
• Helpful hints on how to study for the test, manage stress, and stay focused

About the Series 66 Exam xiii

About this Book xvii

About the Test Bank xix

About the Securities Institute of America xxi

Chapter 1 Definition of Terms 1

Security 1

Person 3

Broker Dealer 4

Agent 4

Issuer 5

Nonissuer 5

Investment Adviser 5

Pension Consultants 6

Investment Counsel 6

Form ADV 7

Investment Adviser Registration Database (IARD) 8

Investment Adviser Representative 9

Solicitor 9

Access Person 10

Institutional Investor 10

Accredited Investor 11

Qualified Purchaser 11

Private Investment Company 11

Offer/Offer to Sell/Offer to Buy 11

Sale/Sell 12

Guarantee/Guaranteed 12

Contumacy 12

Federally Covered Exemption 12

Escheatment 13

12B-1 Fees 13

Power of Attorney 14

Option Contracts 14

Call Options 15

Put Options 15

Futures and Forwards 15

Secondary Market Orders 15

Market Orders 16

Buy Limit Orders 16

Sell Limit Orders 16

Stop Orders/Stop Loss Orders 17

Buy Stop Orders 17

Sell Stop Orders 18

Pretest 19

Chapter 2 Securities Industry Rules and Regulations 25

The Securities Act of 1933 25

The Securities Exchange Act of 1934 27

Public Utilities Holding Company Act of 1935 29

Financial Industry Regulatory Authority (FINRA) 29

The Trust Indenture Act of 1939 30

Investment Advisers Act of 1940 30

Investment Company Act of 1940 30

Retail Communications/Communications with the Public 31

FINRA Rule 2210 Communications with the Public 32

Blind Recruiting Ads 34

Generic Advertising 34

Tombstone Ads 35

Testimonials 35

Free Services 36

Misleading Communications 36

Securities Investor Protection Corporation Act of 1970 (SIPC) 37

The Securities Acts Amendments of 1975 38

The Insider Trading and Securities Fraud Enforcement Act of 1988 38

Firewall 39

The Telephone Consumer Protection Act of 1991 39

National Securities Market Improvement Act of 1996 40

The Uniform Securities Act 41

The Patriot Act 41

Regulation S-P 43

Identity Theft 44

FINRA Rules on Financial Exploitation of Seniors 44

Pretest 49

Chapter 3 Economic Fundamentals 53

Gross Domestic Product 53

Recession 55

Depression 55

Economic Indicators 55

Schools of Economic Thought 57

Economic Policy 58

Tools of the Federal Reserve Board 58

Interest Rates 58

Reserve Requirement 59

Changing the Discount Rate 60

Federal Open Market Committee 60

Money Supply 61

Disintermediation 62

Moral Suasion 62

Fiscal Policy 62

International Monetary Considerations 64

London Interbank Offered Rate (LIBOR) 64

Yield Curve Analysis 64

Pretest 67

Chapter 4 Customer Recommendations, Professional Conduct, and Taxation 71

Professional Conduct by Investment Advisers 72

The Uniform Prudent Investors Act of 1994 72

Fair Dealings with Clients 73

Periodic Payment Plans 77

Disclosure of Client Information 78

Borrowing and Lending Money 78

Developing the Client Profile 78

Investment Objectives 81

Risk vs. Reward 83

Alpha 85

Beta 85

Predicting Portfolio Income 92

Fundamental Analysis 94

Capitalization 97

Tax Structure 99

Investment Taxation 99

Calculating Gains and Losses 99

Cost Base of Multiple Purchases 100

Deducting Capital Losses 101

Wash Sales 101

Taxation of Interest Income 102

Inherited and Gifted Securities 102

Donating Securities to Charity 102

Trusts 103

Totten Trust 103

Gift Taxes 103

Estate Taxes 104

Withholding Tax 105

Corporate Dividend Exclusion 105

Alternative Minimum Tax (AMT) 105

Taxes on Foreign Securities 105

Pretest 107

Chapter 5 Variable Annuities, Retirement Plans, and Life Insurance 111

Annuities 111

Equity-Indexed Annuities 114

Recommending Variable Annuities 115

Annuity Purchase Options 116

Accumulation Units 116

Annuity Units 117

Annuity Payout Options 117

Factors Affecting the Size of the Annuity Payment 118

The Assumed Interest Rate (AIR) 119

Taxation 119

Sales Charges 120

Variable Annuity vs. Mutual Fund 120

Retirement Plans 120

Individual Plans 121

Individual Retirement Accounts (IRAs) 121

529 Plans 124

Local Government Investment Pools (LGIPs) 125

IRA Contributions 126

IRA Accounts 126

IRA Investments 126

It is Unwise to Put a Municipal Bond in an IRA 127

Rollover vs. Transfer 127

Keogh Plans (HR-10) 128

Contributions 128

Tax-Sheltered Annuities/Tax-Deferred Account 129

Contributions 130

Tax Treatment of Distributions 131

Corporate Plans 131

Non-Qualified Corporate Retirement Plans 131

Payroll Deductions 131

Deferred Compensation Plans 132

Qualified Plans 132

Types of Plans 132

Rolling Over a Pension Plan 134

Employee Retirement Income Security Act of 1974 (ERISA) 134

ERISA 404C Safe Harbor 136

The Department of Labor Fiduciary Rules 137

Life Insurance 137

Premiums and Death Benefits 139

Assumed Interest Rate 140

Variable Policy Features 141

Sales Charges 142

Life Settlements 143

Tax Implications of Life Insurance 143

Health Savings Accounts 144

ABLE Accounts 145

Pretest 147

Chapter 6 Registration of Broker Dealers, Investment Advisers, and Agents 151

Registration of Broker Dealers 151

Financial Requirements 152

Agent Registration 153

Hiring New Employees 155

Resignation of a Registered Representative 156

Registering Agents 157

Changes in an Agent’s Employment 158

Mergers and Acquisitions of Firms 158

Renewing Registrations 158

Canadian Firms and Agents 158

Investment Adviser State Registration 159

The National Securities Market Improvement Act of 1996 (The Coordination Act) 159

Investment Adviser Representative 160

State Investment Adviser Registration 161

Capital Requirements 161

Exams 162

Advertising and Sales Literature 163

Brochure Delivery 164

The Role of the Investment Adviser 165

Additional Compensation for an Investment Adviser 165

Agency Cross Transactions 165

Disclosures by an Investment Adviser 165

Investment Adviser Contracts 167

Additional Roles of Investment Advisers 168

Private Investment Companies/Hedge Funds 168

Fulcrum Fees 168

Wrap Accounts 169

Soft Dollars 169

Pretest 171

Chapter 7 Securities Registration, Exempt Securities, and Exempt Transactions 177

Exempt Securities 177

Securities Registration 178

Exempt Securities/Federally Covered Exemptions 181

Exempt Transactions 182

Pretest 189

Chapter 8 State Securities Administrator: The Uniform Securities Act 195

Actions by the State Securities Administrator 195

Actions Against an Issuer of Securities 197

Rule Changes 198

Investigations 200

Civil and Criminal Penalties 200

Jurisdiction of the State Securities Administrator 201

Administrator’s Jurisdiction over Securities Transactions 201

Radio, Television, and Newspaper Distribution 204

Right of Rescission 204

Statute of Limitations 205

Pretest 207

Answer Keys 213

Glossary of Exam Terms 223

Index 289

The Securities Institute of America, Inc. has an 18 year track record for excellence in securities exam training. Jeffrey Van Blarcom author from The Securities Institute of America, Inc. helps thousands of securities and insurance professionals build successful careers in the financial services industry every year Learn more at : https://securitiesce.com

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