Series 65 Cheat Sheet

Economics + Business

15% of exam
Indicators Financial Reporting Analytics Risk

Investment Vehicles

25% of exam
Fixed Income Equity Funds Alternatives Product Picker

Client Strategies

30% of exam
Client Profile Portfolio Theory Taxes Accounts Strategy Picker

Laws + Ethics

30% of exam
Advisers Registration Fiduciary Duty Prohibited Conduct Law Picker

Quick Facts

Questions 130 scored
Total items 140 total
Time 180 min
Pass 92/130
Format Multiple choice
Sponsor Not required
Corequisite None
Fee $187

Systematic vs Unsystematic EC

Systematic

Marketwide
Cannot diversify away
Beta measures

Unsystematic

Company specific
Diversifiable
Business risk
Market vs issuer

Indicators EC

GDP Economic output
CPI Consumer inflation
Unemployment Lagging labor measure
Building permits Leading construction signal
Yield curve Rate expectations
Credit spreads Default risk pricing
Trade deficit Imports exceed exports

Financial Reporting EC

Balance sheet Assets, liabilities, equity
Income statement Revenue minus expenses
Cash flow Operating cash movement
Audited CPA examined
Accrual Earned, not collected
10-K Annual SEC filing
Prospectus Offering disclosure

Analytics EC

NPV Discounted net value
IRR Discount rate solution
Mean Average return
Median Middle value
Beta Market sensitivity
Alpha Excess return
Sharpe Risk-adjusted return
Correlation Return relationship

Risk EC

Systematic Marketwide risk
Unsystematic Company-specific risk
Interest-rate Bond price risk
Inflation Purchasing-power loss
Liquidity Cannot sell quickly
Opportunity cost Forgone alternative
Business risk Issuer operations risk

Bond Rates VE

Rates up | prices down
Inverse relationship Duration magnifies Coupon fixed Yield adjusts

Mutual Fund vs ETF VE

Mutual fund

Forward NAV
Redeemable shares
End-day pricing

ETF

Intraday trading
Market price
Exchange listed
NAV vs market

Product Picker VE

Need voting ownership → Common stock ( Equity )
Need fixed dividend → Preferred ( Hybrid )
Need interest income → Bond ( Debt )
Need tax-free income → Municipal ( Muni )
Need daily NAV → Mutual fund ( Open-end )
Need intraday basket → ETF ( Exchange )
Need insurer guarantee → Fixed annuity ( Insurance )
Need market subaccounts → Variable annuity ( Security )

Fixed Income VE

Treasury Federal debt
Agency Government-sponsored debt
Corporate bond Company borrowing
Municipal bond State/local debt
GO bond Tax-backed muni
Revenue bond Project-backed muni
TIPS Inflation-indexed principal
Duration Rate sensitivity

Fund Pricing VE

Mutual NAV | ETF market
Forward pricing Intraday trading Premium/discount

Fixed vs Variable Annuity VE

Fixed

General account
Insurer risk
Not security

Variable

Separate account
Client risk
Security product
Guarantee vs market

Equity VE

Common Voting ownership
Preferred Fixed dividend
Convertible Exchange feature
Restricted stock Resale limits
Dividend Issuer payout
Book value Accounting equity
P/E Price divided earnings
Technical Price pattern analysis

Funds VE

Mutual fund Open-end NAV
Closed-end Market-priced shares
ETF Intraday basket
UIT Fixed portfolio
Hedge fund Private pooled fund
REIT Real estate pool
12b-1 Distribution fee
Breakpoint Load discount

Alternatives VE

ETN Issuer debt note
Leveraged fund Magnified daily return
Inverse fund Opposite daily return
Structured product Packaged payoff
Limited partnership Pass-through vehicle
Commodity Physical asset exposure
Digital asset Crypto-related exposure

Insurance Products VE

Fixed annuity Insurer guarantee
Variable annuity Separate account risk
Indexed annuity Index-linked crediting
Term life Temporary death benefit
Whole life Permanent cash value
Universal life Flexible premium policy
Variable life Securities subaccounts

Domain Weights ST

15 | 25 | 30 | 30
Economics 15 Vehicles 25 Strategies 30 Law 30

Strategic vs Tactical ST

Strategic

Long-term mix
Policy driven
Rebalanced

Tactical

Short-term shift
Market views
Timing risk
Policy vs timing

Strategy Picker ST

Long-term target mix → Strategic allocation ( Policy )
Short-term market tilt → Tactical allocation ( Timing )
Reduce company risk → Diversification ( Unsystematic )
Fixed periodic investing → DCA ( Volatility )
Need tax efficiency → After-tax return ( Taxable )
Need estate transfer → TOD ( Beneficiary )

Client Profile ST

Objective Goal of account
Risk tolerance Loss comfort
Time horizon Investment period
Liquidity need Cash timing
Tax status Bracket and account
Net worth Assets minus liabilities
Experience Investment familiarity
Values Nonfinancial preferences

JTWROS vs TIC ST

JTWROS

Survivor owns
Avoids probate
Equal interests

TIC

Estate receives
Probate possible
Unequal interests
Survivor vs estate

Account Picker ST

Minor owns assets → UGMA/UTMA ( Custodial )
Survivor should inherit → JTWROS ( Probate avoided )
Separate estate shares → TIC ( No survivorship )
Education savings → 529 plan ( Qualified costs )
Medical savings → HSA ( Health expenses )
Employer retirement → 401(k) ( Qualified plan )

Portfolio Theory ST

MPT Efficient diversification
CAPM Expected return model
EMH Prices reflect information
Strategic Long-term allocation
Tactical Short-term tilts
Active Manager selection
Passive Index tracking
DCA Periodic fixed investing

Tax + Retirement ST

Capital gain Sale profit
Qualified dividend Preferential tax rate
Tax basis Cost for taxes
Traditional IRA Pretax growth
Roth IRA After-tax growth
401(k) Employer plan
QDRO Divorce plan order
AMT Parallel tax system

Accounts + Estate ST

JTWROS Survivor gets all
TIC Proportional estate share
TBE Spousal ownership
TOD Transfer at death
UGMA Minor custodial gift
UTMA Minor custodial transfer
529 Education savings
HSA Health savings

Adviser Test LA

Advice plus business plus compensation
Advice Business Compensation All three

State vs Federal Adviser LA

State adviser

State registered
Administrator oversight
State filings

Federal covered

SEC registered
Notice files
State antifraud
Registration vs notice

Law Picker LA

New securities issue → 1933 Act ( Disclosure )
Secondary market trading → 1934 Act ( SEC )
Investment adviser conduct → Advisers Act ( Fiduciary )
Investment company rules → Company Act ( Funds )
State registration issue → USA ( Blue sky )
Private placement exemption → Reg D ( Exempt )

Adviser Registration LA

IA Advice for compensation
IAR Adviser representative
State adviser State registered
Federal covered SEC registered
Notice filing State SEC notice
Form ADV Adviser disclosure
Brochure Client disclosure document
U4 Representative filing

Fiduciary Duties LA

Care knows | loyalty discloses
Reasonable basis Best execution Conflict disclosure Client consent

Agent vs IAR LA

Agent

Represents broker-dealer
Effects transactions
Commission role

IAR

Represents adviser
Gives advice
Fee role
Sales vs advice

Securities Law LA

1933 Act Primary offerings
1934 Act Secondary trading
1940 Advisers Adviser regulation
1940 Company Fund regulation
USA State securities law
Blue sky State regulation
Reg D Private offering
Administrator State regulator

Broker vs Adviser LA

Broker-dealer

Transaction business
Agency/principal
Commissions/spreads

Adviser

Advice business
Fiduciary duty
Fees/compensation
Transaction vs advice

Ethics LA

Fiduciary Client first
Duty care Reasonable advice basis
Duty loyalty Conflict disclosure
Custody Asset access control
Discretion Trading authority
Soft dollars Research benefit
Pay to play Political contribution risk
Reg S-P Privacy protection

Care vs Loyalty LA

Care

Reasonable inquiry
Suitable advice
Best execution

Loyalty

Client first
Conflict disclosure
Informed consent
Competence vs conflicts

Prohibited Conduct LA

Guarantees Promise against loss
Churning Excessive trading
Insider trading MNPI misuse
Selling away Unapproved securities activity
Commingling Mixed client assets
Forgery Unauthorized signature
Market manipulation Artificial price activity
Performance fraud Misleading returns

Common Traps

Score Trap

92 scored correct ≠ Not 92 total

Sponsorship Trap

No sponsor needed ≠ Registration still required

Adviser Test

Advice plus compensation ≠ Incidental advice excluded

Federal Covered

SEC registers adviser ≠ States notice file

Fiduciary Trap

Disclose conflicts ≠ Cannot waive duty

Guarantee Trap

No loss guarantees ≠ Past returns not promises

Bond Math

Rates rise ≠ Bond prices fall

Diversification

Reduces unsystematic risk ≠ Not systematic risk

Annuity Trap

Fixed is insurance ≠ Variable is security

Ownership Trap

JTWROS survivor ≠ TIC estate

Last Minute

1. Weights: 15/25/30/30
2. 130 scored; 140 total
3. Passing score: 92/130
4. No SIE or sponsor
5. Passing alone gives no license
6. Adviser = ABC test
7. Federal covered notice-files states
8. IAR registration is state-based
9. Fiduciary = care plus loyalty
10. Rates up; bonds down
11. Diversification cuts unsystematic risk
12. Mutual funds forward-price NAV
13. ETF trades intraday
14. Fixed annuity not security
15. Variable annuity is security
16. No guarantees against loss