Free Series 66 Practice Test

Heads up: these are full-difficulty, exam-level questions — harder than most free Series 66 questions online, on purpose. A low score before studying is normal. Answer all 8 to see your score and a full explanation for each.

Question 1 of 8 · Adviser Regulation

An investment adviser registered with the SEC (federal covered) does business in a state. The state Administrator may require it to:

Question 2 of 8 · Fiduciary & Ethics

An IAR can place a client in either of two share classes with identical portfolios; one costs more and pays the IAR more. Recommending the costlier class without disclosure:

Question 3 of 8 · Portfolio Analysis

Combining two assets provides the GREATEST diversification benefit when their returns have a correlation of:

Question 4 of 8 · Adviser Regulation

Under the SEC's amended Marketing Rule, an SEC-registered adviser using client testimonials in ads must:

Question 5 of 8 · Economic Factors

A factory permanently closes because its industry moved overseas, leaving workers whose skills no longer match available jobs. This unemployment is:

Question 6 of 8 · Client Recommendations

A 68-year-old retiree with a 25-year potential horizon insists on a 100% high-grade bond portfolio 'for safety.' The adviser's most important counterpoint is:

Question 7 of 8 · Custody & Client Funds

A client mails the adviser a check made payable to a THIRD party (the client's mortgage company). To avoid having custody, the adviser must:

Question 8 of 8 · Retirement & Tax

A retiring employee's 401(k) holds employer stock with a $40,000 cost basis now worth $140,000. Using the net unrealized appreciation (NUA) election on an in-kind distribution to a taxable account, the tax treatment is: