STUDY FOR THE SERIES 66 EXAM

NASAA publishes Test Specifications for the Series 66 exam, and it includes in Section II (B) (1-4) Methods of Valuing Equity Securities. These include technical analysis, fundamental analysis, dividend discount, and discounted cash flow. NASAA indicates that the Series 66 exam contains three questions. If you are going to sit for the Series 66, make sure that you know how dividend discount and discounted cash flow work. Bob Eder discusses equity valuation methods on pages 52-53 of  his Series 66 study manual,  Study for the Series 66 Exam . Here is a sample of Bob Eder's treatment of the dividend discount model : EXAMPLE OF DIVIDEND DISCOUNT MODEL ABC Corp. stock paid an annual dividend of $3.30 last year. Today, ABC announces that it will boost its dividend by eight percent for the coming year. Joe tries to earn 12 percent on his money. To find the price based on the dividend discount model, divide this year's expected dividend of $3.56 ($3.30 multiplied by 1.08) by the d...

The Series 66 exam asks questions about "descriptive statistics." This term includes Alpha, Beta, Sharpe Ratios, as well as Standard Deviation. Before sitting for the Series 66, make sure that you are familiar with, and know how to calculate, these ratios. Bob Eder's Study for the Series 66 Exam devotes its first chapter to economic analysis, including a discussion with example and sample question on Standard Deviation. Here is a link to NASAA's Test Specifications for the Series 66 exam .  See  I (A) (2) of NASAA's  Series 66 Test Specifications  for inclusion of the best execution rule. Study for the Series 66 Exam  is available from Amazon in either paperback or Kindle e-book versions.  Here is a link to Bob Eder's Series 66 book on Amazon . Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law in 2001.