Series 65 Practice 6

A visually engaging representation of investment concepts, featuring elements such as stocks, retirement accounts, and annuities in a vibrant, educational style.

Test Your Investment Knowledge

Are you ready to challenge your understanding of investment strategies, retirement plans, and capital markets? This quiz is designed to help you reinforce your knowledge and prepare for real-world financial decisions.

Understand various investment products.
Learn about tax implications and growth potential.
Test your knowledge on options trading and annuities.

15 Questions4 MinutesCreated by TestingTree527

Your client is self-employed (organized as a sole proprietor, not an S-corporation), has a Keogh plan in effect, and makes a profit of $85,000 this year with her web design business. How much may she contribute to her IRA?

$42,500

$40,000

$4,000

20% of pre/25% of post, whichever is greater

Which of the following do mutual funds and variable annuities have in common?

Right to vote for the investment adviser

Right to vote for the board of directors

Tax-deferred growth

Current taxation of all dividends, interest, capital gains

Your 58-year-old client has invested a total of $30,000 into a non-qualified variable annuity. The value of the separate account is now $68,000. If your client withdraws $20,000, what will be the result?

10% taxed at short-term capital gains rate

10% taxed at long-term capital gains rate

10% of growth taxed at ordinary income

Growth taxed at ordinary income, plus 10% penalty on growth portion

Your client, who is 60 years old, has invested a total of $10,000 into a qualified variable annuity. The value of the separate account is now $57,000. If your client withdraws $25,000, what will be the result?

Ordinary income on excess over cost basis

Capital gains on excess over cost basis

10% penalty on entire amount

Entire distribution taxed at ordinary income rate

You are about to sell your Uncle Harry a variable annuity. What is the most important factor in determining suitability?

Number of accumulation units may vary

Educational level

Value of annuity units varies

Uncle Harry's got plenty of money

Which of the following risks does the investor retain in a fixed annuity?

Market risk

Investment Risk

Mortality Risk

Purchasing power/constant dollar risk

Your client's wife does not work. How would you advise him to make IRA contributions this year?

100% of earned income, up to $3,000 for the couple

$2,000 for him, $1,000 for her

$6,000 in a joint IRA if filing jointly

$4,000 each, in separate IRA's

You work for the ABC Corporation and participate in the company's defined contribution plan. If you make in excess of $50,000, how much may you contribute to your IRA?

$1,000

$50% of pre-contribution income

100% of post-contribution income

$4,000

When must you present a prospectus to a client considering the purchase of a variable annuity?

At the time of contract delivery

As soon as you say the word variable

As soon as you say the word annuity

Before or at the time of solicitation

A MSFT Jun 50 call is in the money when MSFT trades at which of the following prices?

$49.00

$50.00

$51.00

$49.05

How far is a MSFT Jan 90 call in the money with MSFT trading at $85?

$90

$87.50

None of the above

Vito Marcello purchases 100 shares of QSTX for $50 a share. Mr. Marcello is bullish on QSTX for the long-term but is nervous about a possible downturn. To hedge his risk and get the best protection, which of the following strategies would you recommend?

Sell a Call

Buy a Call

Sell a Put

Buy a Put