Series 66: Chapter 4 Practice Questions

Taken from our Series 66 Online Guide

Chapter 4 Practice Questions

1. All of the following are pass-through tax entities except:

A. S-corp

B. C-corp

C. LLC

D. General partnership

2. Which of the following would result in a joint owner automatically receiving all ownership of an account’s assets in the event of another owner’s death?

A. Joint tenants with rights of survivorship

B. Joint tenants in common

C. General partnership

D. LLC

3. A client who wishes to retire in 40 years but does not have any desire to experience negative changes in his portfolio between now and then could best be described as having:

A. A conservative risk tolerance

B. A moderate risk tolerance

C. Current income as their primary goal

D. Very little investment experience

4. John is 25 years old and earns $45,000 as an Emergency Medical Technician. He has saved $15,000 to invest and would like to purchase a house in five to seven years. Which of the following would be the least suitable recommendation for him?

A. Tax-free municipal bonds

B. Large-cap equity fund

C. Preferred stocks issued by an NYSE-listed company

D. A balanced fund

5. Alex is a 55-year-old executive for a Fortune 500 company. His wife, who does not work, likes to live beyond their means. He has just inherited $500,000 and would like to invest it so that he can supplement his income when needed. What would be the most suitable investment for him?

A. Blue chip stocks

B. Tax-free municipal bonds

C. REITs

D. High-yield corporate bonds

6. Sarah is a 34-year-old dental hygienist and makes $40,000 per year. She is a single mother and has a chronically sick child. She sometimes has trouble paying her son’s medical bills. She has just inherited $400,000 and would like to invest it. She would like an investment that is relatively safe and liquid in case she needs to cash out of the investment. Of the following recommendations, which would be most suitable for Sarah?

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