| About The Series 65 Exam |
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xxi | |
| About This Book |
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xxv | |
| About The Test Bank |
|
xxvii | |
| About The Securities Institute Of America |
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xxix | |
| Chapter 1 Equity Securities |
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1 | (34) |
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1 | (1) |
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2 | (1) |
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2 | (1) |
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2 | (2) |
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4 | (1) |
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4 | (1) |
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5 | (1) |
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Rights of Common Stockholders |
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5 | (1) |
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5 | (1) |
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Characteristics of a Rights Offering |
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6 | (1) |
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Determining the Value of a Right Cum Rights |
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7 | (1) |
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Determining the Value of a Right Ex Rights |
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7 | (1) |
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8 | (1) |
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9 | (1) |
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9 | (1) |
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10 | (1) |
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10 | (1) |
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11 | (1) |
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Inspection of Books and Records |
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11 | (1) |
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11 | (1) |
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Why Do People Buy Common Stock? |
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11 | (1) |
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11 | (1) |
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What Are the Risks of Owning Common Stock? |
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12 | (1) |
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How Does Someone Become a Stockholder? |
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13 | (1) |
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14 | (1) |
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Features of All Preferred Stock |
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14 | (2) |
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16 | (1) |
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17 | (1) |
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17 | (1) |
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18 | (2) |
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20 | (1) |
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20 | (1) |
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Dividend Disbursement Process |
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21 | (1) |
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21 | (1) |
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How Do People Get Warrants? |
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21 | (1) |
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American Depositary Receipts (ADRs)/American Depositary Shares (ADSs) |
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22 | (1) |
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23 | (1) |
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Functions of the Custodian Bank Issuing ADRs |
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23 | (1) |
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Real Estate Investment Trusts/REITs |
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23 | (1) |
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24 | (1) |
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Direct Participation Programs and Limited Partnerships |
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24 | (1) |
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25 | (3) |
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Tax Reporting for Direct Participation Programs |
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28 | (1) |
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Limited Partnership Analysis |
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28 | (1) |
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Tax Deductions vs. Tax Credits |
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29 | (1) |
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29 | (1) |
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30 | (1) |
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31 | (4) |
| Chapter 2 Corporate And Municipal Debt Securities |
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35 | (34) |
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35 | (1) |
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36 | (1) |
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37 | (1) |
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38 | (1) |
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38 | (1) |
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38 | (1) |
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38 | (1) |
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39 | (1) |
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Yield to Maturity: Premium Bond |
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40 | (1) |
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Yield to Maturity: Discount Bond |
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41 | (1) |
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Calculating the Yield to Maturity |
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41 | (1) |
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Calculating the Yield to Call |
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42 | (1) |
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Realized Compound Yield Returns |
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42 | (1) |
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43 | (1) |
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43 | (1) |
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43 | (1) |
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44 | (1) |
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44 | (2) |
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46 | (1) |
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46 | (1) |
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Converting Bonds into Common Stock |
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47 | (1) |
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47 | (1) |
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Advantages of Issuing Convertible Bonds |
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48 | (1) |
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Disadvantages of Issuing Convertible Bonds |
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48 | (1) |
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Convertible Bonds and Stock Splits |
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48 | (1) |
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The Trust Indenture Act of 1939 |
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49 | (1) |
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49 | (1) |
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49 | (1) |
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Exchange-Traded Notes (ETNs) |
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50 | (1) |
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50 | (1) |
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51 | (1) |
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51 | (2) |
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53 | (1) |
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54 | (4) |
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Taxation of Municipal Bonds |
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58 | (1) |
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58 | (1) |
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Purchasing a Municipal Bond Issued in the State in Which the Investor Resides |
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59 | (1) |
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59 | (1) |
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Original Issue Discount (OID) and Secondary Market Discounts |
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59 | (1) |
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Amortization of a Municipal Bond's Premium |
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60 | (1) |
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60 | (1) |
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Analyzing Municipal Bonds |
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60 | (1) |
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Analyzing General Obligation Bonds |
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61 | (1) |
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61 | (1) |
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62 | (1) |
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Bond Portfolio Management |
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62 | (1) |
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63 | (2) |
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65 | (4) |
| Chapter 3 Government And Government Agency Issues |
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69 | (12) |
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69 | (1) |
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70 | (1) |
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Treasury Bills, Notes, and Bonds |
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70 | (1) |
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Purchasing Treasury Bills |
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70 | (1) |
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71 | (1) |
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71 | (1) |
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Treasury Bond and Note Pricing |
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71 | (1) |
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72 | (1) |
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72 | (1) |
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Treasury Inflation Protected Securities (TIPS) |
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73 | (1) |
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74 | (1) |
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Government National Mortgage Association (GNMA) |
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74 | (1) |
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Federal National Mortgage Association (FNM) |
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75 | (1) |
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Federal Home Loan Mortgage Corporation (FHLMC) |
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75 | (1) |
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Federal Farm Credit System |
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76 | (1) |
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Collateralized Mortgage Obligation (CMO) |
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76 | (1) |
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76 | (1) |
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77 | (2) |
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79 | (2) |
| Chapter 4 Investment Companies |
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81 | (34) |
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Investment Company Philosophy |
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81 | (1) |
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Types of Investment Companies |
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82 | (1) |
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83 | (1) |
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Diversified vs. Nondiversified |
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84 | (1) |
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Investment Company Registration |
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85 | (1) |
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Registration Requirements |
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85 | (2) |
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Investment Company Components |
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87 | (2) |
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89 | (1) |
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89 | (1) |
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Distribution of No-Load Mutual Fund Shares |
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90 | (1) |
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Distribution of Mutual Fund Shares |
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90 | (1) |
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90 | (2) |
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Characteristics of Open-End Mutual Fund Shares |
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92 | (1) |
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Mutual Fund Investment Objectives |
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93 | (1) |
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94 | (1) |
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94 | (2) |
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96 | (1) |
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Valuing Mutual Fund Shares |
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97 | (1) |
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98 | (2) |
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Other Types of Sales Charges |
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100 | (1) |
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101 | (1) |
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Recommending Mutual Funds |
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101 | (1) |
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Calculating a Mutual Fund's Sales Charge Percentage |
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102 | (1) |
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Finding the Public Offering Price |
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103 | (1) |
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103 | (1) |
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104 | (1) |
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104 | (1) |
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105 | (1) |
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105 | (1) |
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Automatic Reinvestment of Distributions |
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106 | (1) |
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Other Mutual Fund Features |
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106 | (1) |
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107 | (2) |
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Mutual Funds Voting Rights |
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109 | (1) |
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110 | (1) |
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110 | (1) |
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111 | (4) |
| Chapter 5 Variable Annuities And Retirement Plans |
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115 | (36) |
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115 | (2) |
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117 | (1) |
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118 | (1) |
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Recommending Variable Annuities |
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119 | (1) |
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120 | (1) |
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121 | (1) |
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121 | (1) |
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122 | (1) |
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Factors Affecting the Size of the Annuity Payment |
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123 | (1) |
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The Assumed Interest Rate (AIR) |
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123 | (1) |
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124 | (1) |
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124 | (1) |
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125 | (1) |
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125 | (1) |
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Investment Management Fees |
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125 | (1) |
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Variable Annuity vs. Mutual Fund |
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125 | (1) |
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126 | (1) |
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126 | (1) |
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Individual Retirement Accounts (IRAs) |
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126 | (9) |
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135 | (1) |
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136 | (2) |
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Rolling Over a Pension Plan |
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138 | (1) |
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138 | (1) |
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Employee Retirement Income Security Act of 1974 (ERISA) |
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138 | (2) |
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140 | (1) |
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The Department of Labor Fiduciary Rules |
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141 | (1) |
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141 | (2) |
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Tax Implications of Life Insurance |
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143 | (1) |
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144 | (1) |
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145 | (2) |
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147 | (4) |
| Chapter 6 Fundamental And Technical Analysis |
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151 | (20) |
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151 | (1) |
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152 | (2) |
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154 | (1) |
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Changes in the Balance Sheet |
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154 | (4) |
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158 | (2) |
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160 | (1) |
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Top-Down and Bottom-Up Analysis |
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160 | (1) |
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Dividend Valuation Models |
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161 | (1) |
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161 | (4) |
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Market Theories and Indicators |
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165 | (1) |
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166 | (1) |
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167 | (1) |
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168 | (1) |
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169 | (2) |
| Chapter 7 Economic Fundamentals |
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171 | (18) |
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171 | (2) |
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173 | (1) |
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173 | (1) |
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173 | (2) |
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Schools of Economic Thought |
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175 | (1) |
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176 | (1) |
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Tools of the Federal Reserve Board |
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176 | (1) |
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176 | (2) |
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178 | (1) |
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Changing the Discount Rate |
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178 | (1) |
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Federal Open Market Committee |
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178 | (1) |
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179 | (1) |
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180 | (1) |
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180 | (1) |
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180 | (2) |
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International Monetary Considerations |
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182 | (1) |
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London Interbank Offered Rate/LIBOR |
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182 | (1) |
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183 | (2) |
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185 | (4) |
| Chapter 8 Recommendations, Professional Conduct, And Taxation |
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189 | (40) |
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Professional Conduct by Investment Advisers |
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190 | (1) |
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The Uniform Prudent Investors Act of 1994 |
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190 | |
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Fair Dealings with Clients |
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19 | (176) |
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Recommending Mutual Funds |
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195 | (1) |
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195 | (1) |
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Disclosure of Client Information |
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196 | (1) |
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Borrowing and Lending Money |
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196 | (1) |
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Developing the Client Profile |
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196 | (1) |
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Types of Advisory Clients |
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197 | (5) |
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202 | (2) |
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Capital Asset Pricing Model (CAPM) |
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204 | (1) |
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205 | (2) |
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207 | (1) |
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207 | (1) |
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208 | (1) |
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209 | (2) |
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211 | (2) |
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213 | (1) |
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Predicting Portfolio Income |
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214 | (2) |
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216 | (1) |
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216 | (1) |
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Calculating Gains and Losses |
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216 | (1) |
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Cost Base of Multiple Purchases |
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217 | (1) |
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218 | (1) |
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218 | (1) |
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Taxation of Interest Income |
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219 | (1) |
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Inherited and Gifted Securities |
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219 | (1) |
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Donating Securities to Charity |
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219 | (1) |
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220 | (2) |
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222 | (1) |
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222 | (1) |
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223 | (1) |
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Corporate Dividend Exclusion |
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223 | (1) |
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Alternative Minimum Tax (AMT) |
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223 | (1) |
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Taxes On Foreign Securities |
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223 | (2) |
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225 | (4) |
| Chapter 9 Securities Industry Rules And Regulations |
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229 | (28) |
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The Securities Act of 1933 |
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229 | (1) |
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230 | (1) |
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230 | (1) |
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231 | (1) |
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231 | (1) |
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The Securities Exchange Act of 1934 |
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232 | (1) |
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The Securities Exchange Commission (SEC) |
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232 | (1) |
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233 | (1) |
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Public Utilities Holding Company Act of 1935 |
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233 | (1) |
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Financial Industry Regulatory Authority (FINRA) |
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233 | (1) |
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The Trust Indenture Act of 1939 |
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234 | (1) |
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Investment Advisers Act of 1940 |
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234 | (1) |
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Investment Company Act of 1940 |
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235 | (1) |
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FINRA Member Communications with the Public |
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235 | (1) |
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FINRA Rule 2210 Communications with the Public |
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236 | (2) |
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238 | (1) |
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239 | (1) |
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239 | (1) |
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240 | (1) |
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240 | (1) |
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241 | (1) |
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Misleading Communications |
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242 | (1) |
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Securities Investor Protection Corporation Act of 1970 (SIPC) |
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242 | (1) |
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242 | (1) |
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243 | (1) |
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243 | (1) |
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The Securities Acts Amendments of 1975 |
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244 | (1) |
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The Insider Trading and Securities Fraud Enforcement Act of 1988 |
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244 | (1) |
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245 | (1) |
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The Telephone Consumer Protection Act of 1991 |
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245 | (1) |
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Exemption from the Telephone Consumer Protection Act of 1991 |
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246 | (1) |
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National Securities Market Improvement Act of 1996 |
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246 | (1) |
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The Uniform Securities Act |
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247 | (1) |
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247 | (1) |
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248 | (1) |
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249 | (1) |
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250 | (1) |
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FINRA Rules on Financial Exploitation of Seniors |
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250 | (3) |
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253 | (4) |
| Chapter 10 Trading Securities |
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257 | (26) |
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257 | (4) |
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261 | (1) |
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Priority of Exchange Orders |
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261 | (1) |
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The Role of the designated market MAKER (DMM) |
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261 | (1) |
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The DMM Acting as a Principal |
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262 | (1) |
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The DMM Acting as an Agent |
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262 | (2) |
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264 | (1) |
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265 | (1) |
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Adjustments for Stock Splits |
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265 | (1) |
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266 | (1) |
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267 | (1) |
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267 | (1) |
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267 | (1) |
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Super Display Book (SDBK) |
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267 | (1) |
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268 | (1) |
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Regulation of Short Sales/Regulation SHO |
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268 | (1) |
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Rule 200 Definitions and Order Marking |
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268 | (1) |
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Rule 203 Security Borrowing and Delivery Requirements |
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269 | (1) |
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270 | (1) |
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271 | (1) |
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Nasdaq Subscription Levels |
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271 | (1) |
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272 | (1) |
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273 | (1) |
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273 | (1) |
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Nasdaq Market Center Execution System (NMCES) |
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273 | (1) |
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274 | (1) |
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274 | (1) |
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274 | (1) |
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274 | (1) |
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275 | (1) |
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275 | (1) |
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276 | (1) |
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Markups/Markdowns When Acting as a Principal |
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276 | (1) |
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Riskless Principal Transactions |
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277 | (1) |
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278 | (1) |
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278 | (1) |
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279 | (4) |
| Chapter 11 Options |
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283 | (28) |
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283 | (1) |
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284 | (1) |
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284 | (1) |
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284 | (1) |
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Possible Outcomes for an Option |
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285 | (1) |
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Characteristics of All Options |
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286 | (1) |
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Managing an Option Position |
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286 | (1) |
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287 | (1) |
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287 | (1) |
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287 | (1) |
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Determining the Breakeven for Long Calls |
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288 | (1) |
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288 | (2) |
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290 | (1) |
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291 | (2) |
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293 | (1) |
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293 | (1) |
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293 | (1) |
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294 | (1) |
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Intrinsic Value and Time Value |
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294 | (1) |
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295 | (1) |
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Long Stock Long Puts/Married Puts |
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295 | (2) |
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Long Stock Short Calls/Covered Calls |
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297 | (2) |
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299 | (3) |
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302 | (3) |
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305 | (1) |
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305 | (2) |
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307 | (4) |
| Chapter 12 Definition Of Terms |
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311 | (20) |
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311 | (2) |
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313 | (1) |
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314 | (1) |
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315 | (1) |
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315 | (1) |
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316 | (1) |
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316 | (1) |
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316 | (1) |
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317 | (1) |
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317 | (2) |
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Investment Adviser Registration Database IARD |
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319 | (1) |
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Investment Adviser Representative |
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319 | (1) |
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320 | (1) |
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320 | (1) |
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320 | (1) |
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321 | (1) |
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321 | (1) |
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Private Investment Company |
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321 | (1) |
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Offer/Offer to Sell/Offer to Buy |
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|
322 | (1) |
|
|
|
322 | (1) |
|
|
|
322 | (1) |
|
|
|
322 | (1) |
|
Federally Covered Exemption |
|
|
323 | (1) |
|
|
|
323 | (1) |
|
|
|
323 | (1) |
|
Negotiable Certificate of Deposit |
|
|
324 | (1) |
|
|
|
325 | (6) |
| Chapter 13 Registration Of Broker Dealers, Investment Advisers, And Agents |
|
331 | (26) |
|
Registration of Broker Dealers and Agents |
|
|
331 | (5) |
|
Changes in an Agent's Employment |
|
|
336 | (1) |
|
Mergers and Acquisitions of Firms |
|
|
336 | (1) |
|
|
|
336 | (1) |
|
Canadian Firms and Agents |
|
|
336 | (1) |
|
Investment Adviser Registration |
|
|
337 | (4) |
|
Advertising and Sales Literature |
|
|
341 | (1) |
|
|
|
342 | (1) |
|
The Role of the Investment Adviser |
|
|
343 | (1) |
|
Additional Compensation for an Investment Adviser |
|
|
343 | (1) |
|
Agency Cross Transactions |
|
|
344 | (1) |
|
Disclosures by an Investment Adviser |
|
|
344 | (3) |
|
Investment Adviser Contracts |
|
|
347 | (1) |
|
Additional Roles of Investment Advisers |
|
|
347 | (1) |
|
Private Investment Companies/Hedge Funds |
|
|
348 | (1) |
|
|
|
348 | (1) |
|
|
|
348 | (1) |
|
|
|
348 | (3) |
|
|
|
351 | (6) |
| Chapter 14 Securities Registration, Exempt Securities, And Exempt Transactions |
|
357 | (16) |
|
|
|
357 | (1) |
|
|
|
358 | (3) |
|
Exempt Securities/Federally Covered Exemption |
|
|
361 | (1) |
|
|
|
362 | (1) |
|
Private Placements/Regulation D Offerings |
|
|
362 | (1) |
|
|
|
363 | (1) |
|
Rule 147 Intrastate Offering |
|
|
364 | (1) |
|
Transactions with Financial Institutions |
|
|
364 | (1) |
|
Transactions with Fiduciaries |
|
|
365 | (1) |
|
Transactions with Underwriters |
|
|
365 | (1) |
|
|
|
365 | (1) |
|
Transactions in Mortgage-Backed Securities |
|
|
365 | (1) |
|
|
|
366 | (1) |
|
Offers to Existing Securities Holders |
|
|
366 | (1) |
|
Preorganization Certificates |
|
|
366 | (1) |
|
Isolated Nonissuer Transactions |
|
|
366 | (1) |
|
|
|
367 | (2) |
|
|
|
369 | (4) |
| Chapter 15 State Securities Administrator: The Uniform Securities Act |
|
373 | (18) |
|
North America Securities Administrators Association |
|
|
373 | (1) |
|
Actions by the State Securities Administrator |
|
|
374 | (1) |
|
Cancellation of a Registration |
|
|
375 | (1) |
|
Withdrawal of a Registration |
|
|
375 | (1) |
|
Actions Against an Issuer of Securities |
|
|
375 | (1) |
|
|
|
376 | (1) |
|
|
|
376 | (1) |
|
|
|
377 | (1) |
|
|
|
377 | (1) |
|
|
|
378 | (1) |
|
Civil and Criminal Penalties |
|
|
378 | (1) |
|
Jurisdiction of the State Securities Administrator |
|
|
379 | (1) |
|
Administrator's Jurisdiction over Securities Transactions |
|
|
380 | (2) |
|
Radio, Television, and Newspaper Distribution |
|
|
382 | (1) |
|
|
|
382 | (1) |
|
|
|
383 | (2) |
|
|
|
385 | (6) |
| Answer Keys |
|
391 | (14) |
| Glossary Of Exam Terms |
|
405 | (66) |
| Index |
|
471 | |
