SERIES 66 FINAL 1 Questions and
Answers A+ Graded (2025)
Which .of .the .following .BEST .defines .the .term ."finder" .in .securities .markets?
A. .Individuals .who .attempt .to .find .potential .investors .for .private .companies.
B. .Unregistered .individuals .who .solicit .investment .advisory .services.
C. .A .broker-dealer .that .clears .and .settles .stock .market .transactions.
D. .An .attorney .who .refers .illegal .activity .to .the .state .Administrator(s). .-
.CORRECT .ANSWER-Individuals .who .attempt .to .find .potential .investors .for
.private .companies.
Finders .are .individuals .who .attempt .to .find .buyers .for .privately .held .firms .that
.are .selling .securities .in .a .private .placement. .Finders .often .work .with .larger
.investment .banks .to .sell .private .placements.
A .client .purchases .an .equity-indexed .annuity .contract .that .guarantees .a .4%
.return .or .80% .of .the .performance .of .the .S&P .500, .whichever .is .greater. .The
.index .declines .over .the .course .of .the .next .year. .What .return .will . your .client
.receive? .- .CORRECT .ANSWER-4%
An .equity-indexed .annuity .guarantees .the .contract .owner .a .minimum .interest
.rate .or .the .performance .of .a .stock .index .such .as .the .S&P .500 . Index. .If .the
.return .on .this .index .is .less .than .the .guaranteed .rate, .the .owner .receives .the
.guaranteed .rate. .If .the .index .return .is .greater .than .the .guarantee, .the .owner
.receives .the .greater .return.
Which .of .the .following .statements .is .TRUE .regarding .digital .assets?
A. .Digital .assets .are .exempt .from .registration .with .state .Administrator(s).
B. .All .digital .assets .are .securities.
C. .Digital .assets .are .exempt .from .the .anti-fraud .provisions .of .the .USA.
D. .Some .digital .assets .are .securities. .- .CORRECT .ANSWER-Some .digital .assets
.are .securities.
,NASAA's .Model .Rule .on .Unethical .Business .Practices .of .Investment .Advisers,
.Investment . Adviser .Representatives, .and .Federal .Covered .Advisers .states .that
.any .fee .arrangement .based .on .capital .gains .or .portfolio .appreciation .may .only
.be .used .if .which .of .the .following .disclosures .is .made .in .writing?
A. .That .the .arrangement .may .cause .the .adviser .to .recommend .strategies .that
.encourage .a .client .to .take .greater-than-normal .risks
B. .That .the .arrangement .always .leads .to .lower .fees .over .a .long .period
C. .That .the .arrangement .never .results .in .excessive .fees
D. .The .adviser .must .abstain .from .any .such .arrangement .because .the .conflict .of
.interest .is .too .great .- .CORRECT .ANSWER-That .the .arrangement .may .cause .the
.adviser .to .recommend .strategies .that .encourage .a .client .to .take .greater-than-
normal .risks.
Approximately .15 .years .ago, .a .client .signed .an .agreement .that .provided .his .wife
.with .power .of .attorney .over . his .account. . The .agreement .also .stated .that, .in .the
.event .his .wife .dies, .his .investment .adviser .will .be .named .as .power .of .attorney.
.Which .of .the .following .statements .about .this .arrangement .is .TRUE?
A. .This .is .considered .a .durable .power .of .attorney.
B. .This .arrangement .is .prohibited .since .a .person .cannot .provide .two .agents
.with .power .of .attorney.
C. .The .client's .wife .and .IA .are .considered .consecutive .agents.
D. .Investment .advisers .are .never .permitted .to .accept .power .of .attorney .from .a
.client. .- .CORRECT .ANSWER-The .client's .wife .and .IA .are .considered .consecutive
.agents.
According .to .the .Investment .Advisers .Act .of .1940, .when .must .an .access .person
.submit .a .transaction .report?
A. .No .later .than .10 .days .after .the .end .of .the .calendar .quarter .in .which .the
.transaction .was .effected
B. .Promptly
C. .No .later .than .30 .days .after .the .end .of .each .calendar .quarter
D. .Within .90 .days .of .the .end .of .the .adviser's .fiscal .year .- .CORRECT .ANSWER-No
.later .than .30 .days .after .the .end .of .each .calendar .quarter
An .agent .is .bullish .on .XYZ .stock .and .intends .to .recommend .the .stock .to .three
.of .her .clients. .Before .the .recommendations .are .made, .the .agent .buys .a .large
.block .of .XYZ .stock .for .her .own .account. .Then, .once .the .clients' .orders .are
.completed, .the .RR .sells .her .shares .for .a .large .profit. .The .agent .s .action .is
.referred .to .as:
A. .Pegging
B. .Making .unsuitable .recommendations
C. .Front-running
D. .A .wash .sale .- .CORRECT .ANSWER-Front-running
, The .disadvantages .of .hedge .funds .for .investors .include .all .of .the .following
.choices, .EXCEPT:
A. .Lack .of .liquidity
B. .Lack .of .transparency
C. .Sophisticated .investment .strategies
D. .Complicated .tax .structures .- .CORRECT .ANSWER-Sophisticated .investment
.strategies
Which .types .of .investments .have .historically .shown .a .great .deal .of .exposure .to
.regulatory .risk?
A. .Limited .partnerships
B. .Corporate .bonds
C. .Common .stocks
D. .Variable .annuities .- .CORRECT .ANSWER-Limited .partnerships
Which .TWO .of .the .following .are .considered .exempt .reporting .advisers .(ERAs)?
I. .Venture .capital .advisers
II. .Private .fund .advisers .with .assets .under .management .of .less .than .$150 .million
III. .Family .office .advisers
IV. .Private .fund .advisers .with .assets .under .management .exceeding .$150 .million
A. .I .and .II
B. .I .and .III
C. .II .and .III
D. .III .and .IV .- .CORRECT .ANSWER-I .and .II
An .investment .adviser .will .NOT .violate .NASAA's .model .rules .by .charging .a
.different .fee .to .different .clients .for .the .same .advisory .service .if:
A. .The .fees .are .reasonable .based .on .industry .standards .and .are .disclosed.
B. .It .discloses .that .the .fees .are .negotiable.
C. .It .receives .written .acceptance .from .each .client.
D. .It .provides .separate .and .distinct .contracts .to .each .client. .- .CORRECT
.ANSWER-The .fees .are .reasonable .based .on .industry .standards .and .are
.disclosed
An .investment .adviser's .client .is .considering .acquiring .a .company .for .$10
.million. .The .company's .expected .future .cash .flows .are .$2 .million .in .the .first
.year, .$4 .million .in .the .second .year, .and .$8 .million .in .the .third .year. . Which .of .the
.following .measures .would .be .most .helpful .when .evaluating .this .investment?
A. .Estimated .payback .period
B. .Internal .rate .of .return .(IRR)
C. .Future .value .of .current .cash .flows
D. .Average .rate .of .return .- .CORRECT .ANSWER-Internal .rate .of .return .(IRR)
Answers A+ Graded (2025)
Which .of .the .following .BEST .defines .the .term ."finder" .in .securities .markets?
A. .Individuals .who .attempt .to .find .potential .investors .for .private .companies.
B. .Unregistered .individuals .who .solicit .investment .advisory .services.
C. .A .broker-dealer .that .clears .and .settles .stock .market .transactions.
D. .An .attorney .who .refers .illegal .activity .to .the .state .Administrator(s). .-
.CORRECT .ANSWER-Individuals .who .attempt .to .find .potential .investors .for
.private .companies.
Finders .are .individuals .who .attempt .to .find .buyers .for .privately .held .firms .that
.are .selling .securities .in .a .private .placement. .Finders .often .work .with .larger
.investment .banks .to .sell .private .placements.
A .client .purchases .an .equity-indexed .annuity .contract .that .guarantees .a .4%
.return .or .80% .of .the .performance .of .the .S&P .500, .whichever .is .greater. .The
.index .declines .over .the .course .of .the .next .year. .What .return .will . your .client
.receive? .- .CORRECT .ANSWER-4%
An .equity-indexed .annuity .guarantees .the .contract .owner .a .minimum .interest
.rate .or .the .performance .of .a .stock .index .such .as .the .S&P .500 . Index. .If .the
.return .on .this .index .is .less .than .the .guaranteed .rate, .the .owner .receives .the
.guaranteed .rate. .If .the .index .return .is .greater .than .the .guarantee, .the .owner
.receives .the .greater .return.
Which .of .the .following .statements .is .TRUE .regarding .digital .assets?
A. .Digital .assets .are .exempt .from .registration .with .state .Administrator(s).
B. .All .digital .assets .are .securities.
C. .Digital .assets .are .exempt .from .the .anti-fraud .provisions .of .the .USA.
D. .Some .digital .assets .are .securities. .- .CORRECT .ANSWER-Some .digital .assets
.are .securities.
,NASAA's .Model .Rule .on .Unethical .Business .Practices .of .Investment .Advisers,
.Investment . Adviser .Representatives, .and .Federal .Covered .Advisers .states .that
.any .fee .arrangement .based .on .capital .gains .or .portfolio .appreciation .may .only
.be .used .if .which .of .the .following .disclosures .is .made .in .writing?
A. .That .the .arrangement .may .cause .the .adviser .to .recommend .strategies .that
.encourage .a .client .to .take .greater-than-normal .risks
B. .That .the .arrangement .always .leads .to .lower .fees .over .a .long .period
C. .That .the .arrangement .never .results .in .excessive .fees
D. .The .adviser .must .abstain .from .any .such .arrangement .because .the .conflict .of
.interest .is .too .great .- .CORRECT .ANSWER-That .the .arrangement .may .cause .the
.adviser .to .recommend .strategies .that .encourage .a .client .to .take .greater-than-
normal .risks.
Approximately .15 .years .ago, .a .client .signed .an .agreement .that .provided .his .wife
.with .power .of .attorney .over . his .account. . The .agreement .also .stated .that, .in .the
.event .his .wife .dies, .his .investment .adviser .will .be .named .as .power .of .attorney.
.Which .of .the .following .statements .about .this .arrangement .is .TRUE?
A. .This .is .considered .a .durable .power .of .attorney.
B. .This .arrangement .is .prohibited .since .a .person .cannot .provide .two .agents
.with .power .of .attorney.
C. .The .client's .wife .and .IA .are .considered .consecutive .agents.
D. .Investment .advisers .are .never .permitted .to .accept .power .of .attorney .from .a
.client. .- .CORRECT .ANSWER-The .client's .wife .and .IA .are .considered .consecutive
.agents.
According .to .the .Investment .Advisers .Act .of .1940, .when .must .an .access .person
.submit .a .transaction .report?
A. .No .later .than .10 .days .after .the .end .of .the .calendar .quarter .in .which .the
.transaction .was .effected
B. .Promptly
C. .No .later .than .30 .days .after .the .end .of .each .calendar .quarter
D. .Within .90 .days .of .the .end .of .the .adviser's .fiscal .year .- .CORRECT .ANSWER-No
.later .than .30 .days .after .the .end .of .each .calendar .quarter
An .agent .is .bullish .on .XYZ .stock .and .intends .to .recommend .the .stock .to .three
.of .her .clients. .Before .the .recommendations .are .made, .the .agent .buys .a .large
.block .of .XYZ .stock .for .her .own .account. .Then, .once .the .clients' .orders .are
.completed, .the .RR .sells .her .shares .for .a .large .profit. .The .agent .s .action .is
.referred .to .as:
A. .Pegging
B. .Making .unsuitable .recommendations
C. .Front-running
D. .A .wash .sale .- .CORRECT .ANSWER-Front-running
, The .disadvantages .of .hedge .funds .for .investors .include .all .of .the .following
.choices, .EXCEPT:
A. .Lack .of .liquidity
B. .Lack .of .transparency
C. .Sophisticated .investment .strategies
D. .Complicated .tax .structures .- .CORRECT .ANSWER-Sophisticated .investment
.strategies
Which .types .of .investments .have .historically .shown .a .great .deal .of .exposure .to
.regulatory .risk?
A. .Limited .partnerships
B. .Corporate .bonds
C. .Common .stocks
D. .Variable .annuities .- .CORRECT .ANSWER-Limited .partnerships
Which .TWO .of .the .following .are .considered .exempt .reporting .advisers .(ERAs)?
I. .Venture .capital .advisers
II. .Private .fund .advisers .with .assets .under .management .of .less .than .$150 .million
III. .Family .office .advisers
IV. .Private .fund .advisers .with .assets .under .management .exceeding .$150 .million
A. .I .and .II
B. .I .and .III
C. .II .and .III
D. .III .and .IV .- .CORRECT .ANSWER-I .and .II
An .investment .adviser .will .NOT .violate .NASAA's .model .rules .by .charging .a
.different .fee .to .different .clients .for .the .same .advisory .service .if:
A. .The .fees .are .reasonable .based .on .industry .standards .and .are .disclosed.
B. .It .discloses .that .the .fees .are .negotiable.
C. .It .receives .written .acceptance .from .each .client.
D. .It .provides .separate .and .distinct .contracts .to .each .client. .- .CORRECT
.ANSWER-The .fees .are .reasonable .based .on .industry .standards .and .are
.disclosed
An .investment .adviser's .client .is .considering .acquiring .a .company .for .$10
.million. .The .company's .expected .future .cash .flows .are .$2 .million .in .the .first
.year, .$4 .million .in .the .second .year, .and .$8 .million .in .the .third .year. . Which .of .the
.following .measures .would .be .most .helpful .when .evaluating .this .investment?
A. .Estimated .payback .period
B. .Internal .rate .of .return .(IRR)
C. .Future .value .of .current .cash .flows
D. .Average .rate .of .return .- .CORRECT .ANSWER-Internal .rate .of .return .(IRR)
