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NASAA Series 66 Uniform Combined State Law Exam

2. Investment Vehicle Characteristics: practice questions

Our Series 66 bank has 51 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

Which statement about digital assets such as crypto tokens is accurate?

  1. They are all regulated as mutual funds
  2. They are all insured by the FDIC
  3. Some may be securities, and they can be highly volatile and subject to fraud and hacking
  4. Their prices are stable because the total supply of each is fixed by law
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C. Some may be securities, and they can be highly volatile and subject to fraud and hacking — Whether a digital asset is a security depends on the facts (the Howey test). Investors face volatility, custody and theft risks, and many platforms are not protected like banks.

Question 2

When market interest rates rise, prices of existing fixed-rate bonds:

  1. Rise only for callable bonds
  2. Stay at par
  3. Rise
  4. Fall
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D. Fall — Bond prices and yields move inversely. New bonds pay the higher rate, so existing lower-coupon bonds must sell for less.

Question 3

A shareholder owns 500 shares and five board seats are up for election. Under cumulative voting, the shareholder may:

  1. Cast 500 votes in total across all seats
  2. Vote only if present at the meeting
  3. Cast all 2,500 votes for one candidate
  4. Cast no more than 500 votes for any one candidate
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C. Cast all 2,500 votes for one candidate — Cumulative voting multiplies shares by seats (500 x 5 = 2,500) and lets the holder concentrate votes, which helps minority shareholders. Statutory voting caps each seat at 500.

Question 4

A blind pool offering is one in which:

  1. Only insiders may buy shares
  2. Investors are not told the specific assets the money will buy
  3. The offering price is hidden until settlement
  4. The buyers' identities are kept secret from the issuer and its agents
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B. Investors are not told the specific assets the money will buy — In a blind pool, the issuer has not identified the specific properties or businesses it will acquire, so investors rely entirely on the promoters.

Question 5

For federal tax purposes, gains on physical gold held over a year are taxed:

  1. As collectibles, at a maximum rate of 28%
  2. As ordinary income with no limit
  3. Tax-free
  4. At the 15% or 20% long-term capital gain rates
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A. As collectibles, at a maximum rate of 28% — Precious metals held as investments are collectibles; long-term gains are taxed at up to 28%.

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