Contact for further consultation
Series 65 Brian Lee
Comprehensive
Questions (Frequently
Tested) with Verified
Answers Graded A+
, Contact for further consultation
1. yield curveAnswer: longer term bonds have higher yields than shorter term bonds
2. balance sheetsAnswer: Assets= liabilities + shareholders equity
3. current ratiosAnswer: current assets divided by current liabilities
4. Quick Ratio (Acid Test)Answer: (Current Assets - Inventories) / Current Liabilities
5. betaAnswer: A measure of a stock's volatility compared to changes in the overall stock market.
6. alphaAnswer: (actual return − risk-free rate) - (beta × [market return − risk-freerate])
7. meanAnswer: add up all the #'s and divide by the # of #'s
8. medianAnswer: middle
9. modeAnswer: occurs most often
10. rangeAnswer: Distance between highest and lowest #'s
11. correlationAnswer: how two ditterent investments react at the same time
12. negative correlationAnswer: when one stock goes up the other goes down
13. systematic riskAnswer: market risk, interest rate risk, currency risk
14. unsystematic riskAnswer: business risk, regulatory risk, political risk
15. record dateAnswer: must be share holder on or before to receive dividend
16. Coupon/Nominal rateAnswer: The interest the investor receives for lending money to
corporation. Tells us how much income is received
17. Interest rateAnswer: the risk for bonds
18. If investor buys bond at discount what does this do to their
incomeAnswer: Has NO EFFECT on income, income is FIXED
19. YieldAnswer: return on investment
20. buying bond at a discountAnswer: investors yield will be greater
21. Current YieldAnswer: annual income divided by current market value (current price)
22. IF you buy bond at premiumAnswer: Current Yield, Yield to Maturity, & Yield to Call
will all be lower than coupon rate
23. IF you buy bond at discountAnswer: Current Yield, Yield to Maturity, & Yield to Call
will all be higher than coupon rate
24. Long term Bonds vs Short Term BondsAnswer: long term are more volatile
than short term
25. Bonds with same maturityAnswer: If bonds have same maturity one with lowest
coupon rate is more volatile
, Contact for further consultation
26. zero coupon bondAnswer: Do NOT pay income (hold till maturity); these bonds are
the MOST volatile
, Contact for further consultation
27. bond ratingsAnswer: if it starts with letter B has to have three letters to be investment
grade; if it starts with B and has 2 it is junk bond
28. preferred stockAnswer: pays fixed income & interest rate sensitive
29. current market priceAnswer: Does NOT determine how much income bond
receives
30. top down methodAnswer: first look at economic factors, then industry, then company
31. bottom up methodAnswer: first look at company then industry then economic
factors
32. Risk for bondsAnswer: ALL have reinvestment risk and interest rate risk
33. Treasury Inflation-Protected Securities (TIPS)Answer: security that is
adjusted based on CPI (con- sumer price index(inflation)). Adjusted semiannually; principal
adjusted also
34. Yankee BondsAnswer: Foreign issued bonds to raise capital but paid in US dollars
35. Brady BondsAnswer: U.S. issued foreign debt
36. Municipal bonds/securitiesAnswer: interest on these bonds are federally
EXEMPT; no fed taxes on income, no state income tax. ONLY suitable for HIGH tax bracket
37. Capital GainsAnswer: NEVER an exemption
38. Tax Equivalent Yield/ Tax Free (corporation) YieldAnswer: Municipal yield
—100% - tax bracket
39. Money Market SecuritiesAnswer: debt instruments or securities with maturities of one
year or less; cash & cash equivalent mean same thing
40. Money MarketAnswer: marketplace for trading securties; short term high quality debt
instruments; very LIQUID, safe income. NOT INSURED. *Used to save for short term (less than a
year)*
41. (TQ) Customer looking to save for down payment on
houseAnswer: money market mutual fund
42. Pooled investments (investment companies)Answer: Issue new
shares which give prospectus. Lawed under Securities Act of 1933; *bought at NAV plus
sales charge*
43. Unit Investment Trust (UIT)Answer: A type of investment company where
investments are selected, not traded/managed. Issue new shares which give prospectus. Lawed
under Securities Act of 1933; *bought at NAV plus sales charge*
Series 65 Brian Lee
Comprehensive
Questions (Frequently
Tested) with Verified
Answers Graded A+
, Contact for further consultation
1. yield curveAnswer: longer term bonds have higher yields than shorter term bonds
2. balance sheetsAnswer: Assets= liabilities + shareholders equity
3. current ratiosAnswer: current assets divided by current liabilities
4. Quick Ratio (Acid Test)Answer: (Current Assets - Inventories) / Current Liabilities
5. betaAnswer: A measure of a stock's volatility compared to changes in the overall stock market.
6. alphaAnswer: (actual return − risk-free rate) - (beta × [market return − risk-freerate])
7. meanAnswer: add up all the #'s and divide by the # of #'s
8. medianAnswer: middle
9. modeAnswer: occurs most often
10. rangeAnswer: Distance between highest and lowest #'s
11. correlationAnswer: how two ditterent investments react at the same time
12. negative correlationAnswer: when one stock goes up the other goes down
13. systematic riskAnswer: market risk, interest rate risk, currency risk
14. unsystematic riskAnswer: business risk, regulatory risk, political risk
15. record dateAnswer: must be share holder on or before to receive dividend
16. Coupon/Nominal rateAnswer: The interest the investor receives for lending money to
corporation. Tells us how much income is received
17. Interest rateAnswer: the risk for bonds
18. If investor buys bond at discount what does this do to their
incomeAnswer: Has NO EFFECT on income, income is FIXED
19. YieldAnswer: return on investment
20. buying bond at a discountAnswer: investors yield will be greater
21. Current YieldAnswer: annual income divided by current market value (current price)
22. IF you buy bond at premiumAnswer: Current Yield, Yield to Maturity, & Yield to Call
will all be lower than coupon rate
23. IF you buy bond at discountAnswer: Current Yield, Yield to Maturity, & Yield to Call
will all be higher than coupon rate
24. Long term Bonds vs Short Term BondsAnswer: long term are more volatile
than short term
25. Bonds with same maturityAnswer: If bonds have same maturity one with lowest
coupon rate is more volatile
, Contact for further consultation
26. zero coupon bondAnswer: Do NOT pay income (hold till maturity); these bonds are
the MOST volatile
, Contact for further consultation
27. bond ratingsAnswer: if it starts with letter B has to have three letters to be investment
grade; if it starts with B and has 2 it is junk bond
28. preferred stockAnswer: pays fixed income & interest rate sensitive
29. current market priceAnswer: Does NOT determine how much income bond
receives
30. top down methodAnswer: first look at economic factors, then industry, then company
31. bottom up methodAnswer: first look at company then industry then economic
factors
32. Risk for bondsAnswer: ALL have reinvestment risk and interest rate risk
33. Treasury Inflation-Protected Securities (TIPS)Answer: security that is
adjusted based on CPI (con- sumer price index(inflation)). Adjusted semiannually; principal
adjusted also
34. Yankee BondsAnswer: Foreign issued bonds to raise capital but paid in US dollars
35. Brady BondsAnswer: U.S. issued foreign debt
36. Municipal bonds/securitiesAnswer: interest on these bonds are federally
EXEMPT; no fed taxes on income, no state income tax. ONLY suitable for HIGH tax bracket
37. Capital GainsAnswer: NEVER an exemption
38. Tax Equivalent Yield/ Tax Free (corporation) YieldAnswer: Municipal yield
—100% - tax bracket
39. Money Market SecuritiesAnswer: debt instruments or securities with maturities of one
year or less; cash & cash equivalent mean same thing
40. Money MarketAnswer: marketplace for trading securties; short term high quality debt
instruments; very LIQUID, safe income. NOT INSURED. *Used to save for short term (less than a
year)*
41. (TQ) Customer looking to save for down payment on
houseAnswer: money market mutual fund
42. Pooled investments (investment companies)Answer: Issue new
shares which give prospectus. Lawed under Securities Act of 1933; *bought at NAV plus
sales charge*
43. Unit Investment Trust (UIT)Answer: A type of investment company where
investments are selected, not traded/managed. Issue new shares which give prospectus. Lawed
under Securities Act of 1933; *bought at NAV plus sales charge*
