SERIES 66 EXAM COVERS DOLLAR WEIGHTED RETURN, SO BE PREPARED!
Are you planning to sit for the Series 66? This is the exam that is required by most states for those wishing to register as investment adviser representatives, provided that the applicant has a valid Series 7 registration (or plans to acquire one in the near future). If so, be aware that the Series 66 Test Specifications published by NASAA includes topics such as time-weighted return and dollar-weighted return. Therefore, do not go into the Series 66 exam unless you are adequately prepared how to apply the formulas for the above returns. For example, dollar-weighted return takes into account deposits of cash and withdrawals during the period, i.e., usually for the calendar year. It is not correct to simply take the gain (or loss) for the year and divide it by the beginning balance, as of January 1. Dollar-weighted return, a more correct but complex approach, makes adjustment for any withdrawals and for any deposits. If, for example, a deposit is made into the investment accoun