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Series 65 Vocabulary
Comprehensive
Questions (Frequently
Tested) with Verified
Answers Graded A+
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1. Insured Deposits Answer: Deposits that are held as cash in a bank or credit union that are
insured against loss by another company
2. Demand Deposit Answer: Deposits from checking and savings accounts which can be
demanded at any time without advanced notice
3. Certificate of Deposit (CD) Answer: Savings certificate promising the holder of the CD a
specific rate of interest
4. Money Market Instruments Answer: Short maturity debts issued by governments,
large companies, and financial institutions
5. Commercial Paper Answer: Money market instrument characterized by a short duration and
an unsecured nature
6. Individual Answer: A singular person that invests for him or herself
7. Sole Proprietorship Answer: A business that is formed by the owner and not structured
as a limited liability corporation, but a sole proprietorship, may report it's income and losses on the
individual owner's income tax returns.
8. General Partnership Answer: Business venture in which two partners or more accept
liability for debts accepted by the business, personal assets are at stake
9. Limited Partnership Answer: Business venture in which general partners manage the
business and assume liability for the company's debt, but the partners are only liable for up to the
amount of their investment
10. Limited Liability Company (LLC) Answer: Business venture in which the owners
are limited in their liability regarding the company's debt, non taxable entity
11. C-Corporation Answer: Business structure by which the company itself is made into a
legal person and assumes all legal and financial liabilities, revenues are taxed to the corporation
12. S-Corporation Answer: Business structure in which the company itself is made into a legal
person and assumes all legal and financial liabilities, no more than 100 investors can be involved,
revenues are passed on to the investors and not taxed at the corporate level
13. Trust Answer: Legal arrangements by which investors may protect their assets, trustee is
assigned to carry out the deceased's wishes in accordance with trust documents and make the passing
of wealth and assets an easier transition
14. Estate Answer: The property left behind by a deceased person, the deceased need to
leave behind details or it will go to a probate court where the decedent's assets and heirs will lose
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value and money respectively
15. Determining A Client's Financial Goals Answer: All objectives are essential to
consider. These objectives may have a long time horizon, such as retirement, or a shorter time
horizon, such as saving for a child's education.
16. Client's Time Horizon Answer: Period of time in which the assets are to be invested.
Knowing he time horizon is essential for providing suitable investment advice. Shorter time horizon
warrants more conservative investments while a longer time horizon warrants more aggressive
investments.
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17. Client's Risk Tolerance Answer: Many factors are important to be considered, time
horizon is one of the more important considerations. Investor personality is also a factor in the risk
tolerance.
18. Client's Investment Profile Answer: A multifaceted look at the client's current
situation and goals. Factors the advisor must be aware of Answer: current income, goals regarding
investment, plans regarding their eventual death, possible disability, time horizon, risk tolerance, cash flows,
balance sheet of assets, existing investments, tax situation, values, attitude, experience, level of
sophistication, and demographics.
19. Client's Income Needs Answer: Current income and the need for current income, if
needs are being met by current occupation.
20. Retirement Answer: When determining how to invest retirement funds, the advisor needs
to know the time horizon, the length of time the investor needs the money, how to ensure it will last
the length of the entire time horizon. Also important to know whether the client desires a high level
spending in retirement or to maintain their current spending in retirement. High level of
spending=aggressive investment while current level of spending=conservative investment.
21. Eventual Demise Answer: Clients can prepare for eventual demise by purchasing life
insurance and participating in estate planning, and possibility setting up a trust. Life insurance policies
can help beneficiaries cope with the loss of income caused by the death. Estate planning helps ensure
that the deceased's wishes are fulfilled with minimal loss of assets due to taxation and legal fees.
22. Disability Answer: Many investors experience disability at some point in their life, this can
involve loss of income, which can endanger assets that guarantee financial liabilities. Disability insurance
is a policy that helps the insured cope with the loss of income resulting from disability by providing
payments to the injured party, usually for a specific period of time.
23. Cash Flow Answer: The clients need for cash should be regularly discussed to ensure
current needs are being met and future needs will be met. Ensuring present and future cash flows
should be considered with every decision the client makes as it is part of the fiduciary responsibility of
the advisor.
24. Investing Needs Answer: The client's balance sheet is a summary of the client's net
worth as related to their assets and liabilities. The advisor can use to balance sheet to determine the
solvency of the investor and make a suitable judgment as to their needs involving investing and
financial planning. Sheet can also be used to show why the advisor gives certain financial advice to the
Series 65 Vocabulary
Comprehensive
Questions (Frequently
Tested) with Verified
Answers Graded A+
, Contact for further consultation
1. Insured Deposits Answer: Deposits that are held as cash in a bank or credit union that are
insured against loss by another company
2. Demand Deposit Answer: Deposits from checking and savings accounts which can be
demanded at any time without advanced notice
3. Certificate of Deposit (CD) Answer: Savings certificate promising the holder of the CD a
specific rate of interest
4. Money Market Instruments Answer: Short maturity debts issued by governments,
large companies, and financial institutions
5. Commercial Paper Answer: Money market instrument characterized by a short duration and
an unsecured nature
6. Individual Answer: A singular person that invests for him or herself
7. Sole Proprietorship Answer: A business that is formed by the owner and not structured
as a limited liability corporation, but a sole proprietorship, may report it's income and losses on the
individual owner's income tax returns.
8. General Partnership Answer: Business venture in which two partners or more accept
liability for debts accepted by the business, personal assets are at stake
9. Limited Partnership Answer: Business venture in which general partners manage the
business and assume liability for the company's debt, but the partners are only liable for up to the
amount of their investment
10. Limited Liability Company (LLC) Answer: Business venture in which the owners
are limited in their liability regarding the company's debt, non taxable entity
11. C-Corporation Answer: Business structure by which the company itself is made into a
legal person and assumes all legal and financial liabilities, revenues are taxed to the corporation
12. S-Corporation Answer: Business structure in which the company itself is made into a legal
person and assumes all legal and financial liabilities, no more than 100 investors can be involved,
revenues are passed on to the investors and not taxed at the corporate level
13. Trust Answer: Legal arrangements by which investors may protect their assets, trustee is
assigned to carry out the deceased's wishes in accordance with trust documents and make the passing
of wealth and assets an easier transition
14. Estate Answer: The property left behind by a deceased person, the deceased need to
leave behind details or it will go to a probate court where the decedent's assets and heirs will lose
, Contact for further consultation
value and money respectively
15. Determining A Client's Financial Goals Answer: All objectives are essential to
consider. These objectives may have a long time horizon, such as retirement, or a shorter time
horizon, such as saving for a child's education.
16. Client's Time Horizon Answer: Period of time in which the assets are to be invested.
Knowing he time horizon is essential for providing suitable investment advice. Shorter time horizon
warrants more conservative investments while a longer time horizon warrants more aggressive
investments.
, Contact for further consultation
17. Client's Risk Tolerance Answer: Many factors are important to be considered, time
horizon is one of the more important considerations. Investor personality is also a factor in the risk
tolerance.
18. Client's Investment Profile Answer: A multifaceted look at the client's current
situation and goals. Factors the advisor must be aware of Answer: current income, goals regarding
investment, plans regarding their eventual death, possible disability, time horizon, risk tolerance, cash flows,
balance sheet of assets, existing investments, tax situation, values, attitude, experience, level of
sophistication, and demographics.
19. Client's Income Needs Answer: Current income and the need for current income, if
needs are being met by current occupation.
20. Retirement Answer: When determining how to invest retirement funds, the advisor needs
to know the time horizon, the length of time the investor needs the money, how to ensure it will last
the length of the entire time horizon. Also important to know whether the client desires a high level
spending in retirement or to maintain their current spending in retirement. High level of
spending=aggressive investment while current level of spending=conservative investment.
21. Eventual Demise Answer: Clients can prepare for eventual demise by purchasing life
insurance and participating in estate planning, and possibility setting up a trust. Life insurance policies
can help beneficiaries cope with the loss of income caused by the death. Estate planning helps ensure
that the deceased's wishes are fulfilled with minimal loss of assets due to taxation and legal fees.
22. Disability Answer: Many investors experience disability at some point in their life, this can
involve loss of income, which can endanger assets that guarantee financial liabilities. Disability insurance
is a policy that helps the insured cope with the loss of income resulting from disability by providing
payments to the injured party, usually for a specific period of time.
23. Cash Flow Answer: The clients need for cash should be regularly discussed to ensure
current needs are being met and future needs will be met. Ensuring present and future cash flows
should be considered with every decision the client makes as it is part of the fiduciary responsibility of
the advisor.
24. Investing Needs Answer: The client's balance sheet is a summary of the client's net
worth as related to their assets and liabilities. The advisor can use to balance sheet to determine the
solvency of the investor and make a suitable judgment as to their needs involving investing and
financial planning. Sheet can also be used to show why the advisor gives certain financial advice to the
