Series 65 Practice 4

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Series 65 Practice Quiz

Enhance your knowledge and prepare for the Series 65 exam with this comprehensive practice quiz. Designed for aspiring financial professionals, this quiz covers essential topics related to investment regulations, tax implications, and various financial instruments.

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15 Questions4 MinutesCreated by InvestingGuide123

An investor has contributed $20,000 to a periodic deferred non-qualified variable annuity. The contract is worth $50,000 at retirement. If the investor takes a random withdrawal of $35,000, what are the tax consequences?

$50,000 taxed as ordinary income

$20,000 taxed as ordinary income

$35,000 taxed at long-term capital gains rate

$30,000 taxed as ordinary income

An investor in a municipal bond fund receives both income and capital gains distributions. What is true of the tax treatment of these distributions?

Both are taxed at ordinary income rates

Both are taxed as long-term capital gains

The income distribution is most likely tax-exempt at the federal level, while the capital gains distribution is fully taxable

Both distributions are tax-exempt at the federal level

If an individual makes qualified contributions to her IRA, her cost basis is

Equal to her contributions

Equal to her contributions times a cost of living index multiplier

Zero

Equal to her average income over the preceding five years

All of the following are funded with after-tax contributions except

Coverdell plan

529 Plan

Roth IRA

403b/TSA

Interest earned on all of the following is taxable at the state level except

GNMA

FNMA

T-bill

Municipal bonds

All of the following are subject to taxation at the federal level except

Common Stock

Preferred stock

Municipal bond

Treasury note

Which of the following allows an individual to make the largest contribution?

Roth

Traditional IRA

Keogh

Variable annuity

Which of the following represents a violation for a securities agent?

Recommending that an income investor purchase shares of the ABC Equity Income fund simply because it pays regular dividends

Providing a mutual fund prospect with a prospectus before beginning the solicitation

Recommending that an income investor purchase shares of the ABC Equity Income Fund primarily to receive an upcoming dividend distribution

Following up oral recommendations with accompanying statements of risk

All of the following offer tax deferral except

Insurance policy

Non-qualified annuity

Qualified annuity

Mutual fund

An investor originally invested $10,000 in the XYZ Growth & Income Fund. After re-investing a $2,000 income distribution and a $1,000 capital gains distribution, her cost basis is

$10,000

$7,000

$13,000

Not determinable without marginal tax bracket provided

All of the following statements accurately summarize major thrusts of the Uniform Prudent Investor Act except

Modern Portfolio Theory is referenced and integrated into the Act

Junk bonds may not be purchased by a pension fund

Professional fiduciaries are held to a higher standard than amateur fiduciaries

Risk management has supplanted risk avoidance

Which of the following business structures is limited to 75 shareholders?

C Corporation

S Corporation

LLC

LLP

All of the following would be listed as assets on a personal balance sheet except

Appraised value of a home

Checking account balance

Mortgage balance

IRA balance

Which of the following represents the best reason for persuading a client to enroll in a wrap-fee account?

The client trades frequently

The client trades infrequently

The wrap-fee structure is the easiest for the investment adviser to implement

The wrap-fee structure is the most cost-effective for the client

Series 65 Practice 4

Series 65 Practice Quiz

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