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Series 66 Cheat Sheet

Practice this exam

Economics + Analysis

  • 8% of exam
  • Ratios Statistics TVM Valuation Ratio Picker

Investment Vehicles

  • 17% of exam
  • Cash + Debt Equity Funds Alternatives Vehicle Picker

Recommendations + Strategies

  • 30% of exam
  • Client Profile Portfolio Theory Retirement Estate Account Picker

Laws + Ethics

  • 45% of exam
  • Registration Administrator Disclosure Fiduciary Registration Picker

Quick Facts

  • Exam Series 66
  • Name Uniform Combined State Law
  • Scored 100 MCQ
  • Pretest 10 unscored
  • Time 150 min
  • Pass 73/100
  • Fee $177
  • Corequisite Series 7
  • Window 120 days

Ratio Picker EC

  • Stock earnings multiple → P/E
  • Accounting value comparison → P/B
  • Short-term solvency → Current ratio
  • Strict liquidity → Quick ratio
  • Leverage level → Debt/equity
  • Income return → Dividend yield

Ratios EC

  • P/E Price per earnings
  • P/B Price per book
  • Current ratio Current asset coverage
  • Quick ratio No inventory liquidity
  • Debt/equity Leverage measure
  • Dividend yield Income per price
  • Payout ratio Dividends per earnings

Statistics EC

  • Mean Arithmetic average
  • Median Middle value
  • Mode Most frequent
  • Range High minus low
  • Std dev Volatility around mean
  • Beta Market sensitivity
  • Alpha Excess benchmark return
  • Sharpe Risk-adjusted return

TVM + Valuation EC

  • PV Discounted future cash
  • FV Compounded current cash
  • NPV PV minus cost
  • IRR NPV equals zero
  • DCF Cash-flow valuation
  • Correlation Relationship strength
  • Rule 72 Doubling estimate

Bond Risk VE

  • Long duration hates rising rates.
  • Duration Rates Price Inverse

Technical vs Fundamental VE

Technical

  • Price patterns
  • Volume trends
  • Market behavior

Fundamental

  • Financial statements
  • Business value
  • Ratios matter
  • Chart versus company

Vehicle Picker VE

  • Principal protection → CD ( Bank deposit )
  • Short Treasury cash → T-bill
  • Voting ownership → Common stock
  • Fixed dividend → Preferred
  • NAV redemption → Mutual fund
  • Intraday fund → ETF
  • Private pooled strategy → Hedge fund
  • Market-risk annuity → Variable annuity

Cash + Debt VE

  • CD Bank time deposit
  • T-bill Short Treasury
  • Commercial paper Short corporate debt
  • Coupon Stated interest
  • YTM Hold-to-maturity yield
  • YTC Yield if called
  • Duration Rate sensitivity
  • Credit spread Default-risk premium

Equity + Offerings VE

  • Common Voting residual ownership
  • Preferred Fixed dividend priority
  • Convertible Exchange into common
  • ADR Foreign equity receipt
  • Preemptive right Maintain ownership percent
  • Restricted stock Resale limits
  • IPO First public sale
  • SPAC Blank-check company

Funds + Alternatives VE

  • Mutual fund Redeemable NAV shares
  • Closed-end fund Market-priced shares
  • ETF Intraday fund trading
  • UIT Fixed portfolio
  • Hedge fund Private pooled fund
  • REIT Real estate pool
  • ETN Issuer debt note
  • Inverse fund Opposite index move

Insurance Products VE

  • Fixed annuity Insurer guaranteed return
  • Variable annuity Subaccount market risk
  • Indexed annuity Index-linked crediting
  • Term life Temporary death benefit
  • Whole life Permanent cash value
  • Universal life Flexible premiums
  • Variable life Securities registration

Profile Core RE

  • GTRLT drives suitable advice.
  • Goals Time Risk Liquidity Tax

Suitability vs Fiduciary RE

Suitability

  • Reasonable recommendation
  • Client profile
  • Transaction focus

Fiduciary

  • Client-first duty
  • Full disclosure
  • Ongoing advice
  • Suitable not enough

Account Picker RE

  • Education savings → 529 plan
  • Minor gift → UTMA/UGMA
  • Medical tax savings → HSA
  • Spousal survivorship → JTWROS
  • Separate estate shares → TIC
  • Retirement employer plan → 401(k)

Client Profile RE

  • Objectives Client goals
  • Time horizon Investment deadline
  • Risk tolerance Loss comfort
  • Liquidity needs Cash access
  • Tax status After-tax impact
  • Financial situation Assets and income
  • Experience Investor sophistication
  • ESG values Nonfinancial constraints

JTWROS vs TIC RE

JTWROS

  • Survivor receives
  • Avoids probate
  • Equal interest

TIC

  • Estate receives
  • Specified shares
  • Probate possible
  • Survivor versus estate

Portfolio Theory RE

  • MPT Diversification frontier
  • CAPM Expected return model
  • EMH Prices reflect information
  • Strategic allocation Long-term target mix
  • Tactical allocation Short-term tilts
  • Active Manager seeks alpha
  • Passive Tracks benchmark
  • DCA Fixed periodic investing

Retirement + Accounts RE

  • Traditional IRA Pre-tax possible
  • Roth IRA After-tax contributions
  • 401(k) Employer defined contribution
  • 403(b) School/nonprofit plan
  • 457 Deferred-comp plan
  • SEP IRA Employer-funded IRA
  • SIMPLE IRA Small-employer plan
  • HSA Medical tax account

Estate + Ownership RE

  • JTWROS Survivor owns all
  • TIC Decedent share transfers
  • TBE Spouses only
  • TOD Securities beneficiary
  • POD Bank beneficiary
  • Per stirpes Branch inheritance
  • Trust Fiduciary ownership
  • QDRO Divorce plan order

Exam Weights LA

  • Eight, seventeen, thirty, forty-five.
  • Economics Vehicles Recommendations Laws

Series 66 vs Series 65 LA

Series 66

  • Needs Series 7
  • Agent plus IAR
  • 100 scored

Series 65

  • No Series 7
  • IAR qualification
  • 130 scored
  • Dual versus adviser

Registration Picker LA

  • Firm effects trades → BD registration
  • Rep sells securities → Agent registration
  • Firm gives advice → IA registration
  • Rep gives advice → IAR registration
  • SEC adviser in state → Notice filing
  • Listed security sold → Federal covered
  • Private Reg D sale → Rule 506
  • Fraud suspected → Administrator action

Registration Parties LA

  • BD Effects securities trades
  • Agent Represents broker-dealer
  • IA Paid securities advice
  • IAR Represents adviser
  • Issuer Creates securities
  • Person Legal entity
  • Administrator State securities regulator
  • Federal covered SEC preempted security

Adviser Test LA

  • ABC makes an IA.
  • Advice Business Compensation

Agent vs IAR LA

Agent

  • Represents BD
  • Effects transactions
  • Commission focus

IAR

  • Represents IA
  • Gives advice
  • Fiduciary focus
  • Sales versus advice

Adviser Rules LA

  • Form ADV Adviser registration
  • Brochure Client disclosure
  • Notice filing State copy filing
  • Custody Client asset access
  • Discretion Trade decision authority
  • Soft dollars Research via commissions
  • Performance fee Qualified-client exception
  • Code ethics Personal trading controls

Antifraud LA

  • Exemptions never exempt fraud.
  • Securities Transactions Federal covered Notice filings

BD vs IA LA

BD

  • Transactions business
  • Broker/dealer capacity
  • Trade compensation

IA

  • Advice business
  • Securities advice
  • Advisory compensation
  • Trades versus advice

Securities Law LA

  • USA 1956 Tested state act
  • Howey Investment contract test
  • Registration State securities filing
  • Exempt security Security exempted
  • Exempt transaction Transaction exempted
  • Rule 506 Federal covered offering
  • Accredited investor Reg D status
  • Antifraud Always applies

Security vs Transaction Exemption LA

Exempt security

  • Security status
  • All sales exempt
  • Example Treasury

Exempt transaction

  • Sale status
  • One transaction exempt
  • Example unsolicited
  • What versus how

Ethics + Prohibited LA

  • Fiduciary Client-first standard
  • Best execution Favorable reasonable terms
  • Churning Excessive trading
  • Front running Trade ahead
  • Selling away Outside securities sales
  • Guarantees Improper performance promise
  • Pay to play Political contribution conflict
  • Vulnerable adult Exploitation protection

State vs Federal Covered LA

State registered

  • State review
  • State filing
  • Administrator authority

Federal covered

  • SEC preemption
  • Notice filing
  • Antifraud remains
  • Preempted still policed

Common Traps

Passing Score

  • 73 correct ≠ Not 72%

Corequisite Order

  • Either exam first ≠ Both before registration

Model Law

  • USA 1956 tested ≠ Not USA 2002

Federal Covered

  • Registration preempted ≠ Antifraud remains

Exempt Transaction

  • Transaction exempt ≠ Security may not

Administrator Power

  • Can investigate ≠ Court imprisons

Discretion

  • Written authority needed ≠ Time/price exception

Performance Fees

  • Generally prohibited ≠ Qualified-client exception

Soft Dollars

  • Research allowed ≠ Office rent disallowed

Registration Result

  • Exam passes ≠ State licenses

Last Minute

  • 1. Laws are 45%
  • 2. Pass = 73/100
  • 3. Series 7 corequisite
  • 4. USA 1956 tested
  • 5. ABC defines adviser
  • 6. Agent represents BD
  • 7. IAR represents IA
  • 8. Exemptions never exempt fraud
  • 9. Federal covered still antifraud
  • 10. Discretion needs writing
  • 11. Performance guarantees prohibited
  • 12. Administrator cannot imprison

Series 66

  • Practice Questions 488 questions Study Guide 47 topics Cheat Sheet 117 facts Flashcards 49 cards Shorts 6 short s Videos 75 videos Blogs 14 blogs Free CE Podcast