Free SERIES66 Braindumps


  • Exam Number: SERIES66
  • Provider: FINRA
  • Questions: 251
  • Updated On: 5-Dec-2018

Series 66
QUESTION: 1
Tiffany's brother, Jamal, is a new investor but believes that the markets are basically efficient
and that he doesn't have the knack for or interest in predicting trends. He also believes in saving
money on transaction costs and taxes. Jamal's investment style is best described by which of
the following:

A. Indexing
B. Tactical asset allocation
C. Buy and hold
D. Diversification

Answer(s): C
Explanation:
A buy-and-hold strategy describes a passive investment approach. This approach assumes that
markets are efficient and that it is impossible to time the purchase or sale of securities or to
manage the balance of assets in order to take advantage of market movements. Since this is a
passive strategy, there are reduced transactions costs and also reduced tax consequences. The
downside to a buy-and- hold approach is that over time, the risk and reward of the asset
allocation wil change and may not be in alignment with the client's original risk tolerance and
objectives

QUESTION: 2

In 2004, inflation has risen to 4%. The Seymour Jones family has owned an 8% callable
corporate bond for seven years. Calculate the 2004 real interest rate on this bond.

A. .04%
B. 12%
C. 98%
D. 4%

Answer(s): D
Explanation:
The formula for inflation-adjusted return factors the eroding effect of inflation on an investment's
annual yield (8%-4%= 4%). It makes no difference that the bond is callable or that the family
has owned the bond for seven years.

QUESTION: 3

Samantha Peterson felt that she had made a great investment in Zip Wow, a growing company
in Kalamazoo. She had purchased 10 of Zip Wow' s 11% bonds at 103 and hoped to make a
profit before the bonds were called. In 2003, inflation rose from 2% to 3% and Zip Wow' s stock
dropped to $12 per share. Calculate the inflation- adjusted return on one of Samantha' s bonds
for 2003.

A. $11.33
B. 8%
C. 10%
D. $113.30

Answer(s): B

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