SERIES 66 EXAM QUIZZES CANDIDATES ON CAPITAL MARKET THEORY, SO BE PREPARED!

 If you plan to sit for the Series 66 Exam, know in advance that the Series 66 contains questions on Capital Market Theory. How do I know this? I know it because NASAA Series 66 Test Specifications clearly indicate in Section III(C)(2) that questions exist that ask about investment theories, such as Capital Market Theory, Capital Asset Pricing Model, Modern Portfolio Theory, and Efficient Market Hypothesis.

Bob Eder in his Study for the Series 66 Exam devotes Chapter 8 to Portfolio Management and discusses Capital Market Theory and Capital Asset Pricing Model (CAPM) in detail. Here is an example of Bob Eder's treatment:

Capital Market Theory                                                                      III(C)(1)

When we talk about capital market theory, we mean the various ways that finance academics explain market portfolio techniques, analysis of pricing, returns, risk, and preservation of capital.

Capital Asset Pricing Model (CAPM)                                                            III(C)(1)

This theory tries to determine a fair return for individual securities based on their betas or their volatility, in relation to the whole market. CAPM evaluates individual securities, and their varying vulnerability to systematic risk. Stocks having higher betas are more risky in the event of a "systematic" crash.

Here is the link to NASAA's Test Specifications for the Series 66 Exam. See the references to Capital Market Theory in NASAA's Series 66 Test Specifications, Section III(C)(1).

Study for the Series 66 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's book on Amazon.

For questions about Bob Eder's Series 66 manual, Study for the Series 66 Exam, or questions in general about the Series 66 Exam, or about Capital Market Theory, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. See Bob Eder's Author Page on Amazon.com.