Series 65 Practice 4
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.
- Test your understanding of key concepts
- Get instant feedback on your answers
- Improve your confidence before the exam
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 plans are funded pre-tax except
IRA
SEP-IRA
529 Plan
Tax-sheltered annuity
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
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