Complete the sentence.
Pick the word that completes the sentence.
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About this test
This is a free 15-question Series 66 practice exam, written by the StudyPDF team from the published NASAA content outline for the Uniform Combined State Law Examination. The Series 66 blends state securities law with investment adviser topics, so the questions cover adviser and representative registration, client communications, ethical practices, client profiles, estate basics and a few products and ratios. You will meet multiple choice, select all that apply and fill in the blank. Answer all 15 questions, then check your score and read the explanation for every question. Nothing here is legal, tax or investment advice.
All 15 questions at a glance
Prefer to read before you play? Every question in the sampler is listed below. Answers and explanations stay collapsed until you open them.
1.Complete the sentence.
A company has current assets of 900,000 dollars, of which 300,000 dollars is inventory, and current liabilities of 400,000 dollars. Its current ratio is _____ and its quick ratio is _____.
Options for blank 1: 1.50, 2.25, 3.00, 0.44
Options for blank 2: 1.50, 2.25, 0.75, 3.00
Answer: 2.25, 1.50
The current ratio is current assets divided by current liabilities: 900,000 / 400,000 = 2.25. The quick ratio takes inventory out first, because inventory can be slow to turn into cash: (900,000 - 300,000) / 400,000 = 1.50. The 3.00 option adds the inventory to current assets instead of taking it out, and 0.44 turns the current ratio upside down. A quick ratio above 1 means the company can cover its short-term bills without selling inventory.
2.An investor buys an exchange traded note (ETN) linked to a stock index. Which statement about the ETN is correct?
- A. It is a fund that holds the index stocks, so the investor owns the underlying shares
- B. It is an unsecured debt obligation of the issuer, so the investor also carries the issuer's credit risk
- C. It is backed by deposit insurance, so the investor cannot lose principal
- D. It pays a fixed coupon and returns the note's face value at maturity whatever the index does
Answer: B. It is an unsecured debt obligation of the issuer, so the investor also carries the issuer's credit risk
An ETN is a debt instrument. The issuer, usually a bank, promises a return tied to an index minus fees, but it holds no basket of securities for the investor. That is the difference from an ETF, which owns the underlying assets. If the issuer's credit deteriorates or it fails, the note can lose value or be worth nothing even when the index is up. There is no deposit insurance on it, and any coupon is not the fixed, guaranteed kind a plain bond pays.
3.A client bought a stock at 50 and it now trades at 58. She wants to protect part of her gain and enters a sell stop order at 54. Which statement is correct?
- A. Once the stock trades at or below 54, the order becomes a market order, so the sale can happen below 54
- B. The order guarantees that the stock will be sold at exactly 54
- C. The order becomes active when the stock rises to 54
- D. The order becomes a limit order at 54 as soon as it is triggered
Answer: A. Once the stock trades at or below 54, the order becomes a market order, so the sale can happen below 54
A sell stop sits below the current price and is triggered when the stock trades at or below the stop price. Then it turns into a market order, which fills at the next available price. In a fast drop that can be under 54, so a stop controls when you sell and not at what price. A sell stop limit order is the version that turns into a limit order, and it can end up not filling at all. A buy stop is the one that waits for the price to rise.
4.While building a client profile, which item belongs on the client's balance sheet and not on the client's cash-flow statement?
- A. The client's monthly take-home salary
- B. The client's yearly spending on vacations
- C. The 210,000 dollars the client still owes on a mortgage
- D. The monthly premium on the client's car insurance
Answer: C. The 210,000 dollars the client still owes on a mortgage
A balance sheet is a snapshot at one date: what the client owns (assets), what the client owes (liabilities), and the difference, which is net worth. The mortgage balance is a liability. A cash-flow statement tracks money moving in and out over a period, so salary, vacation spending and insurance premiums go there. An adviser needs both, because the balance sheet shows what the client has to work with and the cash flow shows how much can be saved or spent without strain.
5.A grandfather opens a UTMA account for his granddaughter, funds it with stock and later asks the custodian to give him the money back. Which statement is correct?
- A. He can take the assets back at any time because he paid for them
- B. The assets belong to the custodian until the child reaches 18 in every state
- C. The assets stay in his estate until he dies, then pass to the child
- D. The gift is irrevocable and the assets belong to the minor, with the custodian managing them until the age set by state law
Answer: D. The gift is irrevocable and the assets belong to the minor, with the custodian managing them until the age set by state law
A UGMA or UTMA account is a completed, irrevocable gift to a minor. The minor owns the assets, the custodian manages them for the minor's benefit, and the donor cannot take them back. Control passes to the child at the age of majority or the age of termination, and the state sets that age, so it is not 18 everywhere. Because the child is the owner, the account can also affect financial aid and the child's tax picture.
6.Which of the following assets generally pass to heirs by beneficiary designation or transfer-on-death registration, outside the owner's will?
Select all that apply.
- A. A life insurance policy with a named beneficiary
- B. A traditional IRA with a named beneficiary
- C. Stock in a brokerage account held in the owner's name alone, with no transfer-on-death registration
- D. A brokerage account registered with a transfer-on-death beneficiary
- E. A checking account in the owner's name alone with no payable-on-death designation
Answer: A. A life insurance policy with a named beneficiary, B. A traditional IRA with a named beneficiary, D. A brokerage account registered with a transfer-on-death beneficiary
Assets with a named beneficiary or a TOD or POD registration pass directly to that person when the owner dies, and the will does not control them. That is why the beneficiary form on file matters more than a will written years earlier. Assets in the owner's sole name with no such designation, such as the plain brokerage and checking accounts here, usually go through probate and pass under the will, or under state law if there is no will. A common review step for an adviser is to compare the beneficiary forms with what the client wants today.
7.A portfolio's policy calls for 60 percent stocks and 40 percent bonds. After a sharp market decline, the manager temporarily moves to 70 percent stocks and 30 percent bonds because she believes stocks are undervalued, and she plans to return to 60/40 later. Which strategy is this?
- A. Strategic asset allocation
- B. Dollar-cost averaging
- C. Tactical asset allocation
- D. Passive indexing
Answer: C. Tactical asset allocation
Strategic asset allocation sets long-term target weights from the client's goals and risk profile and sticks to them, rebalancing back to target. Tactical asset allocation makes short-term deviations from those weights to take advantage of a market view, with a plan to return. Dollar-cost averaging is investing a fixed amount at regular intervals, and passive indexing means tracking a benchmark without market calls. Tactical moves are a form of active management and can cost more in fees and taxes.
8.An investment adviser wants to charge a client a fee that is a share of the capital gains in the client's account. Which statement is correct?
- A. It is permitted for any client who signs a waiver of the performance-fee prohibition
- B. It is generally permitted only for a qualified client, meaning one who meets the net worth or assets-under-management tests in the SEC rule
- C. It is permitted for any client over a stated age
- D. It is permitted for any client as long as the fee is disclosed in the adviser's brochure
Answer: B. It is generally permitted only for a qualified client, meaning one who meets the net worth or assets-under-management tests in the SEC rule
A performance-based fee, such as a percentage of capital gains or appreciation, is generally prohibited. The main exception is a qualified client, which the SEC rule defines through net worth and assets under management, and the dollar tests are adjusted over time, so look up the current numbers. A client cannot waive the protection, and disclosure alone does not make the fee legal. A flat fee or a percentage of the assets managed is not a performance fee, because it does not depend on gains. Check your state's version of the rule too.
9.Which of the following are investment advisers under the Uniform Securities Act, as opposed to persons it excludes?
Select all that apply.
- A. A financial planner who charges a flat fee for a written plan that recommends specific securities
- B. The publisher of a bona fide financial newspaper of general and regular circulation
- C. A firm that sells subscriptions to a monthly report with buy and sell calls on individual stocks, as part of its regular business
- D. A broker-dealer agent whose investment advice is solely incidental to brokerage and who gets no special compensation for it
- E. A neighbor who occasionally shares stock ideas over dinner and charges nothing
Answer: A. A financial planner who charges a flat fee for a written plan that recommends specific securities, C. A firm that sells subscriptions to a monthly report with buy and sell calls on individual stocks, as part of its regular business
The definition has three pieces: advising others about securities, doing it for compensation, and doing it as part of a regular business. The planner and the paid research firm meet all three, and issuing analyses or reports on securities for pay counts. The publisher of a general circulation publication is excluded, and so is a broker-dealer or its agent whose advice is solely incidental and carries no special compensation. The neighbor gets no compensation and has no business, so no. Federal law and your state's version list further exclusions and exemptions, so check them too.
10.An investment adviser representative of an SEC-registered firm works from an office in State B. She has 12 retail clients who live in State A, where she has no place of business. Which statement is correct?
- A. State A can require her to register because she has retail clients there
- B. State A can require her to register only if she visits the clients in person
- C. State A can require her to pass its own exam before she may keep those clients
- D. State A cannot require her to register as a representative, but it keeps its antifraud authority over her
Answer: D. State A cannot require her to register as a representative, but it keeps its antifraud authority over her
Federal law lets a state require registration of a representative of a federal covered adviser only where that person has a place of business in the state, and only if the person meets the federal definition of an investment adviser representative. With no office in State A, State A cannot make her register, however many clients she has there. State B, where she works, is the state that can. No state loses its power to investigate and act against fraud. Representatives of state-registered advisers and the rules for the firm itself follow different tests.
11.An investment adviser representative is named in a written customer complaint alleging sales practice violations, and the complaint is the kind that Form U4 asks about. What should happen?
- A. The Form U4 should be updated promptly to disclose it, and hiding it can lead to discipline of its own
- B. Nothing is required unless the Administrator asks about it
- C. It is disclosed on the next annual renewal and not before
- D. It is disclosed only if a court later enters a final judgment against the representative
Answer: A. The Form U4 should be updated promptly to disclose it, and hiding it can lead to discipline of its own
Registration is not a one-time event. The representative and the firm must keep the registration record current, and a reportable event such as a qualifying customer complaint has to be added to the Form U4 promptly, not saved for renewal. Waiting for a judgment is wrong because many reportable events are allegations, settlements or pending actions. Failing to disclose is itself a violation, and regulators treat it as seriously as the conduct behind it. The reporting thresholds and deadlines are in the form instructions and state rules, so look up the current ones.
12.Which of the following are prohibited in an investment adviser's communications with clients and prospects?
Select all that apply.
- A. Showing only the three best-performing client accounts and leaving out the rest, as if they were typical
- B. Using an advisory contract clause that has the client waive rights under the securities laws
- C. Telling prospects that being registered with the state means the Administrator has endorsed the adviser's skill
- D. Giving a prospect a brochure that lists the adviser's fees
- E. Telling a prospect that past performance does not guarantee future results
Answer: A. Showing only the three best-performing client accounts and leaving out the rest, as if they were typical, B. Using an advisory contract clause that has the client waive rights under the securities laws, C. Telling prospects that being registered with the state means the Administrator has endorsed the adviser's skill
Cherry-picked performance is misleading, because it leaves out facts needed to read it fairly. A clause that has the client give up rights under the securities laws is void and a prohibited practice, since a client cannot waive those protections. Registration only means the filing is on record and fees were paid. It is never an endorsement, and saying otherwise is an unlawful representation. A fee brochure and a past-performance caution are required or helpful disclosure, not violations.
13.An investment adviser representative serves an 83-year-old client who has always been sharp. Over two weeks the client becomes confused and asks to wire a large part of her account to a person she met online. What should the representative do first?
- A. Send the wire at once, because the client's instructions control in every case
- B. Raise it with a supervisor or compliance right away and, where the firm's policy and state law allow, contact the trusted contact person the client named and consider a temporary hold
- C. Call the client's neighbors and relatives to warn them, whether or not the client agreed to that
- D. Say nothing and wait, so the client is not offended
Answer: B. Raise it with a supervisor or compliance right away and, where the firm's policy and state law allow, contact the trusted contact person the client named and consider a temporary hold
Sudden confusion plus an unusual transfer to a stranger is a classic red flag for financial exploitation. The representative should escalate to a supervisor or compliance and use the tools the firm has: asking the client for, or reaching, a trusted contact person named in advance, and where state law and firm policy allow, delaying the disbursement while it is looked into. Many states have adopted NASAA's model act on this, and details differ by state. Sending the wire ignores the red flags, and sharing the account with relatives or neighbors who were not named breaks client confidentiality.
14.Complete the sentence.
Under an adviser's code of ethics, an access person gives an initial holdings report when joining and then reports personal securities transactions _____.
Options for blank 1: monthly, quarterly, semiannually, only when asked
Answer: quarterly
Federal rules built around the code of ethics have access persons, people with access to client trades or recommendations, file an initial holdings report when they join, an annual holdings report, and a transaction report every quarter. The firm reviews those reports to spot front running and other conflicts between personal trading and client trading. NASAA lists initial holdings and quarterly reports on the Series 66 outline for this reason. Reports made only on request would give the firm no way to find a problem in time.
15.Complete the sentence.
A representative who sells a client a private deal without the employing firm's knowledge or approval is engaged in _____, and a representative who trades a client's account far more than its goals justify, to earn commissions, is engaged in _____.
Options for blank 1: selling away, front running, parking, matched orders
Options for blank 2: scalping, churning, marking the close, layering
Answer: selling away, churning
Selling away means selling a security outside the firm's knowledge and supervision, which exposes the client to a product nobody has reviewed and the firm to liability for what it never approved. Churning, or excessive trading, means the volume of trading is driven by the representative's pay and not by the client's objectives. Front running is trading ahead of a client order, parking is hiding ownership of a position, and marking the close and layering are forms of market manipulation. Both selling away and excessive trading appear on the Series 66 outline as unethical practices.
What the Series 66 exam asks and how it is scored
The Series 66 is the Uniform Combined State Law Examination. NASAA, the North American Securities Administrators Association, writes it, and FINRA administers it. According to FINRA, the exam has 100 scored questions plus 10 unscored questions, you get 150 minutes, and you must answer at least 73 of the 100 scored questions correctly to pass. That is 73 percent. The 10 unscored questions are pretest items and you cannot tell which ones they are, so treat every question as if it counts. NASAA runs it as a closed book test and shows your result as soon as you finish.
NASAA publishes the content outline, and it gives the largest share to the law. Laws, regulations and guidelines, including the ban on unethical business practices, is 45 percent, about 45 questions. Client investment recommendations and strategies is 30 percent, about 30 questions. Investment vehicle characteristics is 17 percent, about 17 questions. Economic factors and business information is only 8 percent, about 8 questions. So three of every four questions are about rules and about advising clients, and product knowledge is a smaller slice than on the Series 65.
The Series 66 qualifies you in two capacities, as an agent of a broker-dealer and as an investment adviser representative, as if you had passed both the Series 63 and the Series 65. NASAA also says the FINRA Series 7 is a co-requisite: you can take either exam first, but you need both before you can register as an investment adviser representative on the strength of a Series 66. Who must hold which exam is decided by your state securities regulator, so check the state and FINRA for the current fee, the scheduling window and your own requirements. Nothing on this page is legal advice.
How this sampler differs from the Series 63 and Series 65 pages
The Series 66 is the two state exams in one, which makes it easy to study the wrong half. This sampler leans on the topics that sit on the adviser and conduct side: who counts as an investment adviser, when a representative must register in a state, what an adviser may and may not say to clients, performance fees, how to spot and handle exploitation of an older client, and the personal trading reports a firm collects. It also keeps a few questions on the client profile, estate basics and products, because 30 percent of the real exam is about advising a person. Agent and broker-dealer state law, such as who must register as an agent and the powers of the state Administrator, has its own sampler on the Series 63 page. Portfolio theory, custody and fiduciary duty in depth are on the Series 65 page.
Take all 15 in one sitting, without notes, then read the explanation for every question, including the ones you got right. Eight of the 15 questions are about law and conduct, which is close to how the exam weighs it. Treat each miss as a topic. If you missed the investment adviser definition question and the communications question, you are probably reading past the qualifying words, such as solely incidental, regular business and general circulation. Underline those as you read.
Expect a little arithmetic too. The ratio question here is typical: write the formula first, then plug in the numbers. Several rules on this exam, from the age at which UTMA control passes to who can be registered where, are set by each state, so your own state's statute and your prep provider's material come first.
How StudyPDF builds full practice exams from your own prep material
Fifteen questions can show you which part of the exam is weakest. They cannot get you ready on their own, and a generic set does not know which prep book you bought or which mistakes you keep repeating.
StudyPDF works from your material instead. Upload your Series 66 prep book, your course provider's notes or slides, or the outline you annotated yourself. Then press New material, pick a practice test, choose those files as the sources and set how long it should be. You get a test written from those exact pages, and every explanation cites where the answer comes from. Narrow one to a single area, such as client communications or estate planning, and run it again after you review.
Bo is the tutor for the rest. Ask why an answer is right and Bo explains it from your own pages, with a hint first if you want one.
You do not have to upload anything to start. Name a topic instead, for example investment adviser registration or the client profile, and you get practice questions on it. Starting is free.
Written by the StudyPDF team. Last updated August 19, 2026.
Good to know
Is this Series 66 practice exam really free?
Yes. All 15 questions, the score screen and every explanation are free to play in your browser, and there is no paywall on this page.
How many questions is the Series 66, and what score do I need to pass?
FINRA lists 100 scored questions plus 10 unscored questions, 150 minutes, and at least 73 of the 100 scored questions correct to pass. NASAA writes the exam and FINRA administers it. The Series 7 is a co-requisite, so confirm the current fee, scheduling window and which exams you need with FINRA and your state securities regulator before you book.
Who wrote these questions, and are they real exam questions?
The StudyPDF team wrote every question and explanation from the public NASAA content outline for the Series 66. They are not real exam questions and they are not taken from any prep provider's bank. StudyPDF is not affiliated with NASAA, FINRA, the SEC or any state securities regulator, and nothing on this page is legal, tax or investment advice.
Can I get more questions like these from my own prep book?
Yes. Upload your Series 66 prep book or your course notes to StudyPDF, and Bo builds full-length practice exams from those exact pages, with explanations that cite where each answer came from. If you only have a paper copy, name a topic instead, for example client communications or estate planning, and Bo writes an exam from that.
Need more than a sampler?
Upload your own prep book, slides or notes and Bo builds full-length practice tests from your exact materials, tracks which concepts you keep missing and targets your weak spots. Free to start.