STUDY FOR THE SERIES 66 EXAM

The Series 66 exam qualifies a person for state registration as an investment adviser representative, but is available only for those candidates who hold a current valid Series 7 registration, or who plan to take the Series 7 in the near future. Planning to take the Series 66 exam? Then study up on analytical methods used in investment analysis. Because you will be asked about these on the Series 66. By analytical methods, the Series 66 refers to time value of money concepts, such as internal rate of return, and net present value. Also included are descriptive statistics, such as mean, median, mode, range, standard deviation, alpha, beta, correlation and Sharpe Ratios. Also financial ratios and their uses, such as balance sheet and income statement ratios. Lastly, the Series 66 tests on valuation ratios, such as price-to-book, price earnings, and price earnings over growth, or PEG ratio. Bob Eder's book, Study for the Series 66 Exam , has several chapters on the topics ...

As part of your preparation for taking the Series 66 exam, study the characteristics of limited liability corporations or LLC's. Here are some facts about LLC's that you should know and study. An LLC is a true direct participation program (DPP), because it passes through all income and tax deductions to the owners or shareholders. It thus avoids double taxation, unlike a “C” or regular corporation.  An LLC also offers a corporate shield to officers, employees, and shareholders, protecting them from being sued for any damages caused by the LLC.  Imagine that you open an account for an LLC. Obtain the tax ID of the LLC; its certificate of incorporation; the business of the LLC; and its principal place of business.  Obtain a written corporate authorization; and the names of persons empowered to enter trades.  Obtain a list of share owners and their tax ID numbers. Verify the information that the LLC presents. Here is a link to NASAA's Study Outline for the...

An important part of the Series 66 Exam is the section on Ethical Practices and Fiduciary Obligations. An investment adviser rep has fiduciary obligations to his/her clients. This means that the I.A. rep must always do what is in the best interest of the client, without taking into consideration the I.A. rep's own profit. For example, let's suppose that James, an I.A. representative, determines that three mutual funds are suitable for Widow Jones, a client. Fund A, Fund B, and Fund C. All three are suitable in themselves, suitable for Widow Jones, and suitable insofar as they do not offend quantitative suitability. However, Fund A has an expense ratio of 1.25 percent and a front-end sales charge of 3.25 percent. Fund B has an expense ratio of 0.95 percent and a front-end sales charge of 3.50 percent. Fund C has an expense ratio of 0.45 percent and a front-end sales charge of 2.50 percent. A fiduciary obligation means that James has an obligation to recommend Fund C because ...

If you are planning to take the Series 66 Exam, be careful to study carefully the topic of alternate investments. Under Section II (E) of NASAA's Study Outline for the Series 66 , here's what is listed: Characteristics, Risks, and Application of Alternative Investments 1.  exchange traded notes 2. leveraged funds 3. inverse funds 4. structured products 5. viatical/life settlements Note the presence of exchange-traded notes (ETN's). You might be unfamiliar with how these ETN's are set up, and what they entail. Above all, be sure you can enumerate the differences between ETN's and ETF's (exchange-traded funds). Bob Eder's book, Study for the Series 66 Exam, goes into detail on the differences, and covers much much more. Study for the Series 66 Exam is available at Amazon in either paperback or Kindle e-book versions. Here is a link to Bob Eder's book on Amazon.

If you are planning to sit for the Series 66 —Investment Adviser Representative—exam in the near future, don't neglect studying the various types of return and how to compute them. For example, be able to compute time-weighted return, dollar-weighted return, expected return, inflation-adjusted return, etc. Bob Eder's book,  Study for the Series 66 Exam , shows a student how to compute each of the above returns, as well as other returns. Bob Eder gives examples of the computations, and includes practice questions embedded in the text, to test the reader's comprehension and mastery of the computations. For your reference here is a  link to the NASAA Study Outline for the Series 66 Exam . Note that the Study Outline indicates various forms of return that you need to know for the exam. See III (K) (1) in the Study Outline. Bob Eder's  Study for the Series 66 Exam  is available from Amazon in either Kindle e-book version or paperback. Here is the  link to Amazon'...