STUDY FOR THE SERIES 66 EXAM

The Series 66 exam is designed for those candidates who have already passed the Series 7 general securities exam, or for those who intend to sit for the Series 7 shortly. However, if you are thinking of sitting for the Series 66 exam, don't think that because you have a Series 7 this exam will be a piece of cake. Why do I say this? Because consider the topics contained in the Series 66 Test Specifications put out by NASAA, the creator of the exam. Section I (A) (2) discusses descriptive statistics, including mean, median, mode, range, standard deviation, alpha, beta, and the Sharpe ratio. Therefore, don't go into the test without being adequately prepared. Bob Eder's study text, Study for the Series 66 Exam , has a full treatment of descriptive statistics and the topics included, as mentioned above, in its Chapter 1, entitled Economic Analysis. For example, Study for the Series 66 Exam discusses standard deviation, and gives an example how to calculate it, then follows...

In order to take the Series 66 exam, you must either have passed the Series 7 or else you plan to sit for it shortly. Some of the material asked on the Series 66 duplicates material in the Series 7. However, a candidate for the Series 66 may be a bit rusty on some of these Series 7 subjects. But here they are again—for example, how to value bonds and fixed income securities. Under Section II of the Content Outline  entitled  Investment Vehicle Characteristics   for the Series 66, there are 20 questions, of which five are on fixed income securities. Included in the material for these five questions is "conversion valuation," referring to convertible bonds. So, do you know the difference between conversion ratio and conversion price? Suppose the Series 66 asks for the difference between parity price and conversion price. Do you know the meaning of these terms and how they differ one from the other? Lastly, suppose the Series 66 asks about parity price of the bond. How...

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 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'...