Free Series 65 Practice Exam

What’s on the Series 65

• Economic Factors and Business Information15%

  • Basic Economic Concepts

    Covers business cycles, monetary and fiscal policy, global/currency and geopolitical factors, inflation and deflation, interest rates and yield curves, and core economic indicators like GDP, employment data, trade deficit, and CPI.

  • Financial Reporting

    Covers reading core financial statements (income statement, balance sheet, cash flow statement), auditor opinions, SEC filings and annual reports, and the distinction between audited/unaudited and cash/accrual accounting.

  • Analytical Methods

    Covers time-value-of-money math (IRR, NPV, future value), descriptive statistics (mean, standard deviation, alpha/beta/Sharpe, correlation), liquidity/leverage ratios, and valuation multiples like P/E and price-to-book.

  • Types of Risk

    Covers systematic vs. unsystematic risk categories, opportunity cost, and capital structure/liquidation priority across debt, preferred, and common equity.

• Investment Vehicle Characteristics25%

  • Cash and Cash Equivalents

    Insured deposit products (demand deposits, CDs) and money-market instruments such as commercial paper and Treasury bills.

  • Types of Fixed Income Securities

    Government, agency, corporate, municipal (GO, revenue, insured), and foreign-issued debt, including their tax treatment.

  • Fixed Income Characteristics and Valuation

    Bond features (ratings, call provisions, duration, pricing at par/premium/discount) and valuation math (yield to call/maturity, coupon, discounted cash flow, credit spread).

  • Types and Characteristics of Equity Securities

    Common stock (domestic, foreign, ADRs), preferred variants, shareholder rights (voting, preemptive, liquidation), restricted stock, dividends, and employee stock options (ISO vs. NQSO).

  • Equity Valuation Methods

    Technical analysis, fundamental analysis, dividend discount, and discounted cash flow approaches to valuing equities.

  • Equity Public Offerings

    IPOs, secondary offerings, and SPACs/blind pools/blank-check companies.

  • Types and Characteristics of Pooled Investments

    Mutual funds (open/closed-end), private funds (hedge, PE, VC), UITs, ETFs, and REITs, along with share classes, liquidity, fees, NAV/premium-discount pricing, and comparison factors like benchmarks and manager tenure.

  • Derivative Securities

    Basic definitions and characteristics of options, warrants, and futures, including their costs, benefits, and risks.

  • Alternative Investments and Other Assets

    Limited partnerships, exchange-traded notes, leveraged/inverse funds, structured products, commodities/precious metals, and digital assets (definitions, characteristics, and risks).

  • Insurance-Based Products

    Annuity types (variable, fixed, indexed) and life insurance types (whole, term, universal, variable).

• Client Investment Recommendations and Strategies30%

  • Type of Client

    Individuals and business entities (partnerships, LLCs, C/S-corps), trusts and estates, and foundations/charities as distinct client categories.

  • Client Profile

    Gathering and using client data — goals, cash flow/balance sheet, existing holdings, tax situation, risk tolerance, nonfinancial factors (ESG, life stage, behavioral finance), and time horizon — to inform suitability.

  • Capital Market Theory

    Core portfolio theories including CAPM, Modern Portfolio Theory, and the Efficient Market Hypothesis.

  • Portfolio Management Strategies, Styles and Techniques

    Strategic vs. tactical allocation, style categories (active/passive, growth/value/income), and techniques like diversification, sector rotation, dollar-cost averaging, leveraging, and volatility management.

  • Tax Considerations

    Individual and entity-level income tax fundamentals (capital gains, qualified dividends, AMT, RMDs) plus estate and gift tax basics such as the unified credit and portability.

  • Retirement Plans

    IRAs (traditional/Roth), solo 401(k)s, and qualified/nonqualified employer plans (401(k), 403(b), 457, SIMPLE, SEP).

  • ERISA Issues

    Fiduciary duties under ERISA, qualified default investment alternatives, investment policy statements, and prohibited transactions.

  • Special Types of Accounts

    Education-focused accounts (529s, Coverdell), UTMA/UGMA custodial accounts, and HSAs.

  • Ownership and Estate Planning Techniques

    Forms of asset titling (JTWROS, tenancy in common, TBE), TOD/POD designations, beneficiary rules, trusts/wills basics, QDROs, and donor-advised funds.

  • Trading Securities

    Order types and mechanics (market/limit/stop, short sales, margin), the roles of broker-dealers/market makers/exchanges, and trading costs (commissions, markups, spreads, best execution).

  • Portfolio Performance Measures

    Return calculation methods (risk-adjusted, time- vs. dollar-weighted, IRR, after-tax) and use of relevant benchmarks.

• Laws, Regulations, and Guidelines Including Prohibition on Unethical Business Practices30%

  • Regulation of Investment Advisers

    Definitions and registration/notice-filing rules for state-registered and federal-covered advisers, including books-and-records and IAR supervision obligations.

  • Regulation of Investment Adviser Representatives

    IAR definition, registration and post-registration duties, and continuing education/reportable-event requirements.

  • Regulation of Broker-Dealers and Their Agents

    Definitions and regulatory treatment of broker-dealers and their registered agents.

  • Regulation of Securities and Issuers

    Securities registration, exemptions, issuer definitions and agent/finder registration, plus state antifraud and enforcement authority.

  • Remedies and Administrative Provisions

    Powers of the state securities Administrator, including administrative actions and other penalties/liabilities.

  • Communication with Clients and Prospects

    Required disclosures, prohibitions on misrepresenting registration status or guaranteeing performance, client contract requirements, and rules on advertising/correspondence including social media and digital communications.

  • Ethical Practices and Fiduciary Obligations

    Fee/compensation disclosure, custody and discretion rules, AML, conflicts of interest and prohibited conduct (insider trading, selling away, market manipulation, exploitation of vulnerable adults), plus cybersecurity/privacy and business continuity planning.