STC SERIES 66 LATEST
GREENLIGHT EXAMS
In a JTWROS account, if one person dies, which of the following
statements is TRUE? - ANSWERS-With proper documentation, the
assets in the account become the property of the other person.
In a Joint Tenants with Right of Survivorship (JTWROS) account, after
the presentation of a death certificate, the ownership is transferred to the
other person who is named on the account title. Depending on the state,
additional documentation may be required. If the account was
established by two persons as Joint Tenants in Common (JTIC), a
portion of the account's assets are transferred to the survivor and the
remainder is distributed to the estate of the deceased person.
The Modern Portfolio Theory uses which of the following to measure
volatility? - ANSWERS-Standard deviation
The primary measure of volatility used in the Modern Portfolio Theory
is standard deviation. Standard deviation is a statistical measures of the
amount of variability or dispersion around an average. In simple terms,
volatility is a reflection of the degree to which a security's price moves.
A stock with a price that has wide fluctuations or moves erratically is
volatile. On the other hand, a stock that maintains a relatively stable
price has low volatility. Beta shows the sensitivity of a fund's, security's,
or portfolio's performance in relation to the market as a whole. Alpha is
considered a risk-adjusted return and represents the difference between
an asset's expected return and its actual return. The Sharpe Ratio is a
risk-adjusted return measurement that indicates the amount of return
END OF
PAGE
1
, STC SERIES 66 LATEST
GREENLIGHT EXAMS
earned per unit of risk. The basic idea is to determine how much
additional return is being received for the willingness to hold a risky
asset
According to the Uniform Securities Act, which of the following persons
is an agent? - ANSWERS-A CEO who sells shares of his company's IPO
to family, friends, and other retail investors
This question is about identifying when a person who represents the
issuer of securities is considered an agent. Since the CEO is representing
his company by selling its stock to the public, he is considered an agent
of the issuer. One exclusion from the definition of an issuer agent exists
when the individual effects transactions in securities that are exempt,
such as U.S. government of municipal securities. Another exclusion
from the definition is when the person is involved in exempt
transactions, including private placements, sales to qualified purchasers,
and transactions between the issuer and its underwriter. If an individual
represents a broker-dealer in effecting securities transactions, he is
always considered an agent and required to be registered.
An investor has set aside a large sum of money to purchase a
corporation. The legal details of the acquisition should be completed
within the next six months, but he is unsure of the exact date on which
this will happen. If the investor decides to temporarily invest his money
END OF
PAGE
2
, STC SERIES 66 LATEST
GREENLIGHT EXAMS
in Treasury bonds until he needs the funds to complete the purchase,
which TWO of the following risks are the most serious for him?
Currency risk
Interest-rate risk
Timing risk
Credit risk - ANSWERS-II and III
In a variable annuity, the investment risk is assumed by the investor. In
fact, for variable contracts, the insurance company directs the assets to a
separate account. In a fixed annuity, the investment risk is assumed by
the insurance company. For fixed contracts, the insurance company
directs the assets to its general account.
When comparing variable annuities to fixed annuities, which TWO
statements are TRUE regarding the assumption of investment risk?
It is assumed by the investor in a variable annuity.
It is assumed by the insurance company in a variable annuity.
It is assumed by the investor in a fixed annuity.
It is assumed by the insurance company in a fixed annuity. -
ANSWERS-Analyzing the duration in her portfolio
Duration is a measurement of how sensitive a bond's price is to small
changes in interest rates. Bonds with longer maturities tend to be more
END OF
PAGE
3
, STC SERIES 66 LATEST
GREENLIGHT EXAMS
sensitive to interest-rate swings—in other words, the bonds have longer
durations. Conversely, bonds with shorter maturities are less sensitive to
interest-rate swings—they have shorter durations.
An investor maintains a portfolio of debt securities. She is concerned
that the FRB may tighten the money supply, leading to an increase in
interest rates. To measure the effect that this change will have on the
value of her portfolio, which of the following choices will be the BEST
in providing her with this information? - ANSWERS-Analyzing the
duration in her portfolio
Duration is a measurement of how sensitive a bond's price is to small
changes in interest rates. Bonds with longer maturities tend to be more
sensitive to interest-rate swings—in other words, the bonds have longer
durations. Conversely, bonds with shorter maturities are less sensitive to
interest-rate swings—they have shorter durations.
Which of the following statements is TRUE regarding a client's
occupation as it relates to her financial status and the suitability of
recommendations? - ANSWERS-It can influence the liquidity needs of
the client's portfolio.
Some clients have stable jobs that provide a steady, reliable income,
while others may have jobs that provide volatile and unpredictable
income. Obviously, a person's occupation represents how she makes
END OF
PAGE
4
GREENLIGHT EXAMS
In a JTWROS account, if one person dies, which of the following
statements is TRUE? - ANSWERS-With proper documentation, the
assets in the account become the property of the other person.
In a Joint Tenants with Right of Survivorship (JTWROS) account, after
the presentation of a death certificate, the ownership is transferred to the
other person who is named on the account title. Depending on the state,
additional documentation may be required. If the account was
established by two persons as Joint Tenants in Common (JTIC), a
portion of the account's assets are transferred to the survivor and the
remainder is distributed to the estate of the deceased person.
The Modern Portfolio Theory uses which of the following to measure
volatility? - ANSWERS-Standard deviation
The primary measure of volatility used in the Modern Portfolio Theory
is standard deviation. Standard deviation is a statistical measures of the
amount of variability or dispersion around an average. In simple terms,
volatility is a reflection of the degree to which a security's price moves.
A stock with a price that has wide fluctuations or moves erratically is
volatile. On the other hand, a stock that maintains a relatively stable
price has low volatility. Beta shows the sensitivity of a fund's, security's,
or portfolio's performance in relation to the market as a whole. Alpha is
considered a risk-adjusted return and represents the difference between
an asset's expected return and its actual return. The Sharpe Ratio is a
risk-adjusted return measurement that indicates the amount of return
END OF
PAGE
1
, STC SERIES 66 LATEST
GREENLIGHT EXAMS
earned per unit of risk. The basic idea is to determine how much
additional return is being received for the willingness to hold a risky
asset
According to the Uniform Securities Act, which of the following persons
is an agent? - ANSWERS-A CEO who sells shares of his company's IPO
to family, friends, and other retail investors
This question is about identifying when a person who represents the
issuer of securities is considered an agent. Since the CEO is representing
his company by selling its stock to the public, he is considered an agent
of the issuer. One exclusion from the definition of an issuer agent exists
when the individual effects transactions in securities that are exempt,
such as U.S. government of municipal securities. Another exclusion
from the definition is when the person is involved in exempt
transactions, including private placements, sales to qualified purchasers,
and transactions between the issuer and its underwriter. If an individual
represents a broker-dealer in effecting securities transactions, he is
always considered an agent and required to be registered.
An investor has set aside a large sum of money to purchase a
corporation. The legal details of the acquisition should be completed
within the next six months, but he is unsure of the exact date on which
this will happen. If the investor decides to temporarily invest his money
END OF
PAGE
2
, STC SERIES 66 LATEST
GREENLIGHT EXAMS
in Treasury bonds until he needs the funds to complete the purchase,
which TWO of the following risks are the most serious for him?
Currency risk
Interest-rate risk
Timing risk
Credit risk - ANSWERS-II and III
In a variable annuity, the investment risk is assumed by the investor. In
fact, for variable contracts, the insurance company directs the assets to a
separate account. In a fixed annuity, the investment risk is assumed by
the insurance company. For fixed contracts, the insurance company
directs the assets to its general account.
When comparing variable annuities to fixed annuities, which TWO
statements are TRUE regarding the assumption of investment risk?
It is assumed by the investor in a variable annuity.
It is assumed by the insurance company in a variable annuity.
It is assumed by the investor in a fixed annuity.
It is assumed by the insurance company in a fixed annuity. -
ANSWERS-Analyzing the duration in her portfolio
Duration is a measurement of how sensitive a bond's price is to small
changes in interest rates. Bonds with longer maturities tend to be more
END OF
PAGE
3
, STC SERIES 66 LATEST
GREENLIGHT EXAMS
sensitive to interest-rate swings—in other words, the bonds have longer
durations. Conversely, bonds with shorter maturities are less sensitive to
interest-rate swings—they have shorter durations.
An investor maintains a portfolio of debt securities. She is concerned
that the FRB may tighten the money supply, leading to an increase in
interest rates. To measure the effect that this change will have on the
value of her portfolio, which of the following choices will be the BEST
in providing her with this information? - ANSWERS-Analyzing the
duration in her portfolio
Duration is a measurement of how sensitive a bond's price is to small
changes in interest rates. Bonds with longer maturities tend to be more
sensitive to interest-rate swings—in other words, the bonds have longer
durations. Conversely, bonds with shorter maturities are less sensitive to
interest-rate swings—they have shorter durations.
Which of the following statements is TRUE regarding a client's
occupation as it relates to her financial status and the suitability of
recommendations? - ANSWERS-It can influence the liquidity needs of
the client's portfolio.
Some clients have stable jobs that provide a steady, reliable income,
while others may have jobs that provide volatile and unpredictable
income. Obviously, a person's occupation represents how she makes
END OF
PAGE
4
