NASD Series 65 & Series 65 Exam Prep Software

NASD Series 65 Text Book & Series 65 Exam Prep Software Package

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Series 65: Uniform Investment Advisor Law Examination

Qualifies a representative to act as an investment advisor and receive a fee.

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Series 65 Text Book - Uniform Investment Advisor Law Examination

Series 65 Exam Prep Software Package

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SERIES 65 EXAM INFORMATION:

The Uniform Investment Adviser Law Examination is developed by NASAA, The North American Securities Administrators Association. The Series 65 exam, is designed to qualify candidates as investment adviser representatives. The exam covers the following topics:

Ethics and legal guidelines: 45 questions

Investment Strategies: 39 questions

Investment Vehicles: 26 questions

Economics and Analysis: 20 questions

The Uniform Investment Adviser Law Examination consists of 130 questions. Each candidate will also receive 10 practice questions that do not count towards their score. Each candidate will be allowed 180 minutes to complete the examination. This time limit has been designed to provide enough time for all candidates to complete the exam. At least 89 (68.5%) of the questions must be answered correctly for an individual to pass the Series 65 exam.

The examination is conducted as a closed book test. Upon completion of the examination, the score for each section and the overall test score will immediately be made available to the candidate.

The examination is administered by the NASD. To schedule a candidate for the examination, an individual's firm should file an electronic Form U-4 or the individual should file a paper Form U-10 and pay the $110.00 examination fee to the NASD.

Series 65 Exam Prep Software - Uniform Investment Adviser Law

SERIES 65 EXAM INFORMATION:

Ethics and legal guidelines: 45 questions

Investment Strategies: 39 questions

Investment Vehicles: 26 questions

Economics and Analysis: 20 questions

The examination is conducted as a closed book test. Upon completion of the examination, the score for each section and the overall test score will immediately be made available to the candidate.

Portion of a Sample Chapter:

Risk vs. Reward

Risk is the reciprocal of reward. An investor must be offered a higher rate of return for each unit of additional risk the investor is willing to assume. There are many types of risk involved with investing money. They are as follows:

�� Capital Risk

�� Market Risk

�� Nonsystematic Risk

�� Legislative Risk

�� Timing Risk

�� Credit Risk

�� Reinvestment Risk

�� Call Risk

�� Liquidity Risk

Capital Risk

Capital risk is the risk that an investor may lose all or part of the capital they have invested.

Market Risk

Market risk is also known as a systematic risk and it is the risk that is inherent in any investment in the markets. For example, you could own stock in the greatest company in the world and you could still lose money because the value of your stock is going down, simply because the market as a whole is going down.

Nonsystematic Risk

Nonsystematic risk is the risk that pertains to one company or industry. For example, the problems that the tobacco industry faced a few years ago would not have affected a computer company.

Legislative Risk

Legislative risk is the risk that the government will do something that adversely affects your investment. For example, beer manufacturers probably did not fare too well when the government enacted prohibition.

Timing Risk

Timing risk is simply the risk that an investor will buy and sell at the wrong time and will lose money as a result.

Credit Risk

Credit risk is the risk of default inherent in debt securities. An investor may lose all or part of their money because the issuer has defaulted and cannot pay the interest or principal payments owed to the investor.

Reinvestment Risk

When interest rates decline and higher yielding bonds have been called or have matured, investors will not be able receive the same return given the same amount of risk. This is reinvestment risk and the investor is forced to either accept the lower rate or must take more risk to obtain the same rate.

Interest Rate Risk

Interest rate risk is the risk that the price of bonds will fall as interest rates increase. As interest rate rise the value of existing bonds fall and may subject the bondholder to a loss if they need to sell the bond.

Call Risk

Call risk is the risk that, as interest rates decline, higher yielding bonds and preferred stocks will be called and investors will be forced to reinvest the proceeds at a lower rate of return or at a higher rate of risk to achieve the same return. Call risk only applies to preferred stocks and bonds with a call feature.

Opportunity Risk

Investors who hold long term bonds until maturity must forgo the opportunities to invest that money in other potentially higher yielding investments.

Liquidity Risk

Liquidity risk is the risk that an investor will not be able to liquidate their investment when they need to or that they will not be able to liquidate their investment without adversely affecting the price.

Alpha

A stock’s alpha is its projected independent rate of change or the difference between an investment’s expected return and its actual return. Portfolio managers whose portfolios have positive alphas are adding value through their asset selection.