STUDY FOR THE SERIES 66 EXAM

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.

Taking the Series 66 exam? Then make sure that you are familiar with the "best execution rule." Lets suppose that there are three market-makers in GKLM common shares.  Dealer A quotes GKLM at 30.55 bid, 30.93 offer. Dealer B quotes 30.61-30.98. Dealer C quotes 30.45-30.89. All three quotes are firm for up to 1,000 shares. Widow Jones wishes to sell 500 shares of GKLM and puts in her order with her brokerage firm, DEF Co. According to the best execution rule, DEF Co. should send Widow Jones' order to Dealer B. Why? Dealer B's bid is the highest bid for GKLM, and Widow Jones wants the highest dealer bid for her sale of 500 GKLM. Our book  Study for the Series 66 Exam  covers the Best Execution Rule on page 156, including practice questions and examples. Here is a link to NASAA's Test Specifications for the Series 66 exam .  See  III (J) (3) of the  Series 66 Test Specifications  for inclusion of the best execution rule. Study for the Series 66 Exam ...

If you plan to take the Series 66 exam, make sure that you know, and are familiar with, various valuation ratios. What are these ratios? The price earnings ratio. The PEG ratio. The Price to Book ratio. And the Price to Sales ratio. For this posting, we discus the PEG ratio, or price/earnings ratio divided by the growth rate expected in the current year. Here's an example. The price/earnings ratio of XYZ Corp. is 12, or its P/E multiple is 12. The growth percentage expected in the current year is 14. The PEG ratio is therefore 12 divided by 14, or 0.857. This example shows that the growth percentage expected of XYZ Corp. is greater than its P/E ratio. Thus, an investor in XYZ is getting a good value because XYZ's growth rate exceeds its price-to-earnings, or the P/E ratio is less than the growth rate.  Therefore, ideally no investor should buy a stock unless its growth percentage exceeds its P/E ratio. Our book  Study for the Series 66 Exam  covers the various valuation r...