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Series 65/66 — Practice Questions flashcards

6 of 70 questions free to study here · 18 topics · the whole deck is built into Willys

Multiple-choice practice questions, one best answer each, across economics, investment vehicles, client strategies, taxes and retirement plans, weighted toward state law, adviser regulation and ethics as both exams are.

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Practice deck · part of NASAA Series 65 and Series 66 · written against: NASAA Series 65 and 66 content outlines; Uniform Securities Act, NASAA model rules and the Investment Advisers Act of 1940 as of 2026. Updated 2026-10-10.

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6 questions from the deck as they are. Flip, rate yourself, filter by topic; your progress stays in this browser.

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  1. To slow inflation, the Federal Open Market Committee drains reserves from the banking system through open-market operations. Which result is most likely?

    A) The money supply expands as banks lend more
    B) Bank reserves rise and short-term rates fall
    C) Bank reserves fall and short-term rates rise
    D) The discount rate is automatically lowered
    C) Bank reserves fall and short-term rates rise

    Buyers pay for the Treasuries out of bank reserves, leaving less to lend and pushing short-term rates up. Rising reserves and falling rates are what happen when the Fed buys securities.
    Economic Factors
  2. A client holds long-term investment-grade corporate bonds. Which risk will not shrink if she spreads her money across many more issuers?

    A) Business risk of one company
    B) Default risk of any single issuer
    C) Interest-rate risk
    D) Risk of one issuer's downgrade
    C) Interest-rate risk

    Rising rates push down the prices of nearly all bonds at once, so interest-rate risk is systematic. Default, business and downgrade risk are specific to issuers and fall as the portfolio is diversified.
    Investment Risks
  3. A client wants her assets to pass to her children without probate, to keep full control while she lives and to have a successor manage them if she becomes incapacitated. Which arrangement fits best?

    A) An irrevocable trust
    B) An UTMA custodial account
    C) A revocable living trust
    D) A transfer-on-death registration
    C) A revocable living trust

    A revocable trust avoids probate, can be changed at will and names a successor trustee to step in on incapacity. TOD registration avoids probate but provides no one to manage the assets if she becomes incapacitated.
    Client Profile & Accounts
  4. A client bought 100 shares at 40 dollars and later another 100 at 60. She sells 100 shares at 70 and identifies no lot. Using FIFO, what is her gain?

    A) 1,000 dollars
    B) 3,000 dollars
    C) 2,000 dollars
    D) No gain is reported
    B) 3,000 dollars

    FIFO treats the first shares bought as the first sold: (70 − 40) × 100 = 3,000. Selling the 60-dollar lot through specific identification would give 1,000.
    Taxation
  5. An individual works for an SEC-registered adviser, has an office in State X and manages accounts for her dozens of retail clients. How must she register in State X?

    A) As an investment adviser representative
    B) As an agent of a broker-dealer
    C) She need not register at all
    D) As a federal covered adviser
    A) As an investment adviser representative

    States may require registration of a federal covered adviser's representatives who have a place of business in the state. The firm is the federal covered adviser; she is its representative.
    Registration & Exemptions
  6. A client tells her adviser on the phone to use his judgment with her account, and he places a trade that afternoon. Under NASAA's rules, what is the latest he may obtain her written discretionary authority?

    A) 30 days after the phone call
    B) Before the first discretionary trade
    C) At the next annual account review
    D) 10 business days after the first trade
    D) 10 business days after the first trade

    NASAA allows an adviser to act on oral discretion if written authority follows within ten business days of the first trade. Written authority before the first trade is the rule for broker-dealer agents.
    Ethics & Prohibited Practices

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About these cards

Review status: Second-reader reviewed, with corrections applied.

Checked against:

  • Topic outline follows the NASAA Series 65 and Series 66 content outlines effective June 12, 2023 (outline only; no outline text reproduced).
  • Checked against the Uniform Securities Act (1956, as amended), NASAA model rules, the Investment Advisers Act of 1940 and SEC rules (17 CFR Part 275), and IRS Publications 550 and 559; public domain U.S. government sources where federal.
  • Also checked against the Uniform Securities Act (2002) with official comments and NASAA's amended text of the 1956 Act, the Securities Act of 1933 and the Securities Exchange Act of 1934 with 17 CFR Parts 230 and 240 and SEC interpretive releases, the Internal Revenue Code and IRS Publications 575 and 970, ERISA, FINRA rules, state enactments of the Uniform Prudent Investor Act and the Uniform Transfers to Minors Act, and NASAA's Series 65 and 66 exam overviews (US government sources public domain; reference only, no text copied).
  • Original questions and wording; no textbook, prep-course or question-bank text copied. Figures indexed yearly are excluded. All worked math computed by the author with hypothetical numbers.
  • The Series 65 and Series 66 exams are developed by NASAA and administered by FINRA; neither is affiliated with, or endorses, this product.

These are independent study notes written for Willys. They are not official exam material, may contain mistakes, and are no substitute for your course, your teacher or the exam owner's own publications. Found an error? Tell us — corrections ship as a new version of the deck.

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The Series 65 and Series 66 exams are developed by NASAA and administered by FINRA; neither is affiliated with, or endorses, this product.

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