Series 66 Review

How many years do you need to work in order for Social Security benefits to hit?

10

If a discount or premium is mentioned, the term being discussed is _____

NAV

If a dealer is buying or selling securities, think …

markup/markdown

For an FCA, if there is a material change, the document must be amended …

immediately

For a state-registered IAR, if there is a material change, the document must be amended …

within 30 days

Cash dividend tax rate for lower tax bracket

15%

Cash dividend tax rate for lower tax bracket

20%

LLC/LLP traits:

limited liability; flow-through taxation

GP traits:

flow-through taxation; no limited liability

S corp

flow-through taxation; limited liability; max 100 shareholders

C corp (most exchange-traded companies are these)

unique tax identification number; limited liability; unlimited number of investors;

Communication directed to a specific audience, rather than the general public

sales literature

an insurance policy against theft/embezzlement; NOT a security

surety bond

Commission charged on the transaction must be disclosed to the customer on the _________ of the transaction.

confirmation

BD withholds the IPO issue from the public with the intention of taking a “free ride” on the upward movement of the stock

free riding and withholding

An RIA can only borrow money from a client if the client is a …

BD; bank; IA affiliate

Registration by Filing(Notification)

seasoned issuer; simplest method

Registration by Coordination

issuer registers with SEC and state at the same time

Registration by Qualification

most complicated; can be used for any security; usually for an IPO where there isn’t federal SEC registration

Where does an RIA have to retain records?

only in state where it has its main place of business

When can an IA take custody of client funds?

surety bond has been taken out

Criminal penalty for violation of USA

$5k per violation; 3 years of prison per violation

IA political campaign contribution limit

$350 per election IA can vote in

IA custody is considered if ____ or more of prepaid advisory fees are collected within the upcoming ___ months or less

$500; 6

When an administrator suspends a party’s license, the license can ask for a hearing and it must be held within …

15 days of written request

A registered investment advisor must maintain its articles of incorporation until …

3 years after termination

type of trust that distributes all its income to beneficiaries in the year its earned

simple trust

type of trust that doesn’t always distribute all earned income to beneficiaries; undistributed earnings will be donated to charity or taxable to the trust

complex trust

type of trust that can be changed at any time prior to the death of the person who owns the assets; AVOIDS PROBATE

revocable(inter vivos) trust

trust that is set up after trustor dies; arranged according to a will; trustee carries out will’s instructions; GOES THROUGH PROBATE

testamentary trust

Components of the numerator of a mutual fund expense ratio:

other expenses; 12b-1 fees; management fee

breakpoints means buy ____(A,B, or C) shares

A

inserting a third party between a broker-dealer and the best available price in the market resulting in a higher price to the customer

interpositioning

When do registrations need to be renewed by?

December 31 of each year

3 things IRAs can hold

US minted gold coins and bullion; partnership units; REITs

3 things IRAs can’t hold

collectibles; art; life insurance

qualified dividends at taxed at

capital gains rates

Who are qualified dividends made by:

U.S. corporations; foreign corporations with U.S. ties

Forward contracts are traded:

OTC

deposits or withdrawals >$10,000 require a CTR, which is the

Department of Treasury

tenants by entirety

married couples; each party owns 100% of the property

qualified clients requirements:

$1.4 million AUM; net worth of $2.7 million excluding primary residence

1-5% match of investor’s premium by annuity company

bonus annuity

Mortgages (are/are not) securities

are not