Free Series 66 practice test with answers
This free Series 66 practice test has 15 original questions at real exam difficulty. They follow NASAA's four sections in proportion, so 7 of the 15 test laws, regulations and unethical practices. The answer sits under each question, with the reasoning and its source.
Three habits make this test more useful:
- Answer before you read on. The answer box sits right under the options, so pick yours first.
- Keep the real pace. The Series 66 allows about 82 seconds a question. Give yourself about 20 minutes for all 15.
- Name the role first. In the law questions, start by deciding what role the person plays. Agents, broker-dealers, advisers and their representatives face different rules.
How to read your Series 66 practice test score
Treat your score out of 15 as a rough guide, not a prediction. Each question is almost 7% of the total, so one lucky guess moves your score a lot.
| Your score | What it suggests |
|---|---|
| 12 to 15 | 80% or more. Above the 73% pass mark, but confirm it on full-length, timed practice. |
| 10 or 11 | 67% to 73%. Right around the line, so find your weak sections and work on them. |
| 0 to 9 | 60% or less. Below the line for now, so study the topic behind each miss. |
For a second check on questions you haven't seen, take our free 20-question Series 66 diagnostic. It uses the exam's weights, so 9 of its 20 questions test the law.
Series 66 sample questions: economic factors and investment vehicles
Sections 1 and 2 together make up a quarter of the Series 66: 25 scored questions. Section 1 tests analytical methods, such as the time value of money. Section 2 covers the products an adviser recommends. This test gives Section 1 one question and Section 2 three.
Section 1: economic factors and business information
Original questions, written to match real exam difficulty
Question 1
A client has $20,000 to save for one year. Account X pays 8% a year, compounded semiannually. Account Y pays 8.12% a year, compounded annually. Which account pays more interest over the year?
- AAccount Y, because Account X would pay only $1,600
- BAccount X, because it would pay about $1,632
- CAccount Y, because its 8.12% stated rate is higher than 8%
- DAccount X, because it would pay about $3,328
Answer: B
Semiannual compounding pays half the annual rate every six months.
Account X pays 4% twice. The first half-year adds $800. The second adds $832, because it also earns 4% on the first $800. That's about $1,632 in all, an effective rate of about 8.16%. Account Y pays 8.12% once, or $1,624. So Account X pays more, even though its stated rate is lower. Compare effective rates, not stated ones.
Source: NASAA Series 66 Test Specifications, topic area I.A.1.3 (time value of money: future value)
Section 2: investment vehicle characteristics
Question 2
A client buys a one-year $10,000 reverse convertible on Stock Z, trading at $50. It pays a 10% coupon. If Z closes below $35 on the final valuation date, the note repays 200 Z shares instead of cash. Z closes that day at $30. What does the client receive?
- A200 shares worth $6,000 plus the $1,000 of coupons
- B200 shares valued at the $35 barrier ($7,000) plus the coupons
- C$10,000 in cash but no coupon, because the barrier was breached
- D$10,000 in cash plus the coupon, because the principal is protected
Answer: A
A reverse convertible pays a high coupon because the buyer takes on the stock's downside. If the stock ends above the barrier, the client gets the $10,000 back. Here it closed below the barrier, so the note repays a set number of shares instead.
The 200 shares are worth $30 each, or $6,000. The client keeps the $1,000 of coupons. The client ends with $7,000 and loses $3,000.
Source: NASAA Series 66 Test Specifications, topic area II.J.3 (structured products); FINRA Regulatory Notice 10-09 (reverse convertibles)
Question 3
A client's indexed annuity credits 80% of the index's gain each year, but never more than 6% a year. The index gains 10% in year one and 5% in year two. What rates does the annuity credit for the two years?
- A4.8% in year one and 4% in year two
- B6% in year one and 4% in year two
- C6% in year one and 5% in year two
- D8% in year one and 4% in year two
Answer: B
Apply the participation rate first, then the cap. The participation rate sets the share of the index's gain the contract credits. The cap limits the result.
In year one, 80% of 10% is 8%, which the 6% cap cuts to 6%. In year two, 80% of 5% is 4%. That's under the cap, so the full 4% is credited. The cap only bites in strong years, but the participation rate applies every year.
Source: NASAA Series 66 Test Specifications, topic area II.K.1.3 (indexed annuities); FINRA Investor Insights, "The Complicated Risks and Rewards of Indexed Annuities" (participation rates and caps)
Question 4
A married couple keep all their deposits at one FDIC-insured bank. He has $200,000 in a savings account in his name. She has a $150,000 CD in her name. They own a joint checking account equally, holding $460,000. How much of their $810,000 is insured?
- A$250,000: one limit for all deposits at the bank
- B$500,000: one $250,000 limit per spouse
- C$600,000: the joint account is capped at $250,000
- D$810,000: all of it, across two ownership categories
Answer: D
FDIC insurance covers $250,000 per depositor at each bank, in each ownership category. Single accounts and joint accounts are separate categories.
His $200,000 and her $150,000 each sit under that spouse's single-account limit. Each spouse's half of the joint account is $230,000, also under the limit. So all $810,000 is insured. A joint account isn't capped at $250,000 in total, because each co-owner's share gets its own coverage.
Source: 12 CFR 330.6 and 330.9 (FDIC single accounts, and joint accounts insured separately by each co-owner's interest); FDIC, Understanding Deposit Insurance ($250,000 per depositor, per bank, per ownership category); NASAA Series 66 Test Specifications, topic area II.A.1 (insured deposits)
Series 66 practice questions: client recommendations and strategies
Section 3 is 30% of the Series 66: 30 questions. It covers client profiles and portfolio strategy. It also covers taxes, retirement plans and how accounts pass at death. The four questions below cover a stock sale, a self-employed retirement plan, a widow's IRA and a beneficiary designation.
Section 3: client recommendations and strategies
Question 5
A client bought 100 shares of a stock at $30 three years ago, and 100 more at $50 eight months ago. The stock now trades at $45, and she sells 100 shares. She wants the lowest tax bill this year. What should she tell her broker?
- ASell the $50 shares, for a $500 short-term loss
- BSell the $50 shares, for a $500 long-term loss
- CNothing, because the broker averages the two lots and reports a $500 gain
- DSell the $30 shares, because long-term gains get lower tax rates
Answer: A
With stock held at a broker, the client can name the shares she's selling. If she names none, the tax rules treat the oldest shares as sold first.
The $30 shares would give a $1,500 long-term gain. The $50 shares give a $500 loss instead, and a loss beats a gain at any tax rate. She has held those shares only eight months, so the loss is short term.
Source: Treasury Regulation 1.1012-1(c)(1) and (c)(3) (naming the shares sold; earliest lot by default) and 1.1012-1(e) (average basis for fund and reinvestment plan shares only); Internal Revenue Code Section 1222 (short-term and long-term holding periods); NASAA Series 66 Test Specifications, topic area III.E (tax considerations)
Question 6
A self-employed consultant with no employees wants to shelter as much of this year's $60,000 of net earnings as she can. She's choosing between a SEP IRA and a Solo 401(k). How do they compare for her?
- AThe Solo 401(k) allows less, because it takes only her elective deferrals
- BThey allow the same, because both cap contributions at 25% of compensation
- CThe Solo 401(k) allows more, adding an elective deferral to the employer contribution
- DThe Solo 401(k) allows more, but only once she hires an eligible employee
Answer: C
In a Solo 401(k), the owner wears two hats. As the employer, she can make a contribution of up to 25% of compensation, with a special calculation for the self-employed. As the employee, she can also defer pay up to the annual limit.
A SEP takes only the employer contribution. So at $60,000 of earnings, the Solo 401(k) lets her put away much more. It needs no employees at all.
Source: IRS, One-Participant 401(k) Plans (the owner contributes as both employee and employer); IRS, Simplified Employee Pension Plan (only the employer contributes, up to 25 percent of pay); NASAA Series 66 Test Specifications, topic area III.F.2 (Solo 401(k))
Question 7
A 52-year-old client's husband has died, leaving her his traditional IRA as sole beneficiary. She needs income from it now and wants to avoid the 10% additional tax on early distributions. What should the adviser tell her?
- ATreat the IRA as her own and then withdraw, since a spouse has that choice
- BKeep it as an inherited IRA, and her withdrawals are free of all tax
- CWait until she's 59½, because no exception covers her withdrawals
- DKeep it as an inherited IRA, and pay income tax but not the 10% tax
Answer: D
Distributions paid to a beneficiary after the owner's death are exempt from the 10% additional tax. That's true at any age.
A surviving spouse may also treat the IRA as the spouse's own. If this client does that, it becomes her IRA, and withdrawals before 59½ can face the 10% tax. So she should keep it as an inherited IRA. Her withdrawals are still ordinary income, because traditional IRA money hasn't been taxed.
Source: Internal Revenue Code Section 72(t)(2)(A)(ii) (distributions to a beneficiary after the owner's death); IRS Publication 590-B (a surviving spouse who treats an inherited IRA as the spouse's own); NASAA Series 66 Test Specifications, topic area III.F.1 (individual retirement accounts)
Question 8
A client names her three children as equal beneficiaries of her account, per stirpes. One son dies before she does, leaving two children of his own. When the client dies, how is the account divided?
- AHalf to each of her two surviving children
- BA third to each surviving child, and a sixth to each grandchild
- CA quarter to each of her four living descendants
- DA third to each surviving child, and a third to the son's estate
Answer: B
Per stirpes means by branch. If a beneficiary dies first, that beneficiary's share passes down to the beneficiary's own descendants.
So the account still splits three ways. The two surviving children get a third each. The son's third passes to his two children, who split it: a sixth each. None of it goes through his estate: the designation sends his share straight to his children.
Source: NASAA Series 66 Test Specifications, topic area III.I.3 (beneficiary designation including per stirpes)
Series 66 exam questions: laws, regulations and unethical practices
Section 4 is the biggest part of the Series 66: 45% of the exam, or 45 questions. It covers the Uniform Securities Act, federal securities law and the conduct rules for agents and advisers. Three questions test registration and exemptions, and four test enforcement, liability and conflicts of interest.
Registration and exemptions
Question 9
A manufacturer's treasurer sells the company's newly issued notes in the state. The notes aren't registered there, and she sells them only to banks, insurance companies and pension funds. The company pays her a bonus based on her sales. Under the Uniform Securities Act, is she an agent?
- AYes, because she earns a bonus tied to the amount she sells
- BYes, because the notes she sells aren't registered in the state
- CNo, because she represents the issuer only in exempt transactions
- DNo, because an issuer's officers are never agents under the Act
Answer: C
An agent represents a broker-dealer or an issuer in selling securities. But the Act leaves out anyone who represents an issuer only in exempt transactions.
Sales to banks, insurers and pension funds are exempt institutional transactions. So she isn't an agent, and her bonus doesn't change that. The no-commission condition belongs to a different exclusion, for sales to the issuer's own employees. An officer who fits the definition is an agent.
Source: Uniform Securities Act Section 401(b) (agent does not include an individual representing an issuer in transactions exempted by Section 402(b)) and Section 402(b)(8) (sales to institutional buyers)
Question 10
Over six months, a company's president offers its unregistered shares to 14 state residents, none of them institutions. Four buy for investment, and no one is paid for soliciting them. Does the Uniform Securities Act's private placement exemption apply?
- ANo, because more than ten people received offers in 12 months
- BYes, because only four people bought, fewer than the limit of ten
- CYes, because no one was paid for soliciting the buyers
- DNo, because every buyer must be an accredited investor
Answer: A
The Act exempts a transaction under an offer to no more than ten people in the state in any 12 months, not counting institutions. The seller must reasonably believe the buyers are buying for investment, and no one may be paid to solicit any prospective buyer.
The limit counts offers, not sales. The president made 14 offers, so the exemption is lost though only four bought. The Administrator can change the number by rule.
Source: Uniform Securities Act Section 402(b)(9) (offers to no more than ten persons in the state in twelve months, other than institutions)
Question 11
An agent offers a client two unregistered bond issues: one from a Canadian province, and one from a foreign national government whose diplomatic relations with the United States ended last year. No transaction exemption applies. Under the Uniform Securities Act, which statement is correct?
- ABoth are exempt securities, because governments issued both
- BNeither is exempt, because only US government securities are exempt
- COnly the national government's bonds are exempt, because provinces aren't covered
- DOnly the provincial bonds are exempt, so the national bonds must be registered
Answer: D
The Act exempts securities of Canada, its provinces and their subdivisions. It also exempts securities of any other foreign government, but only if the United States currently maintains diplomatic relations with it.
The provincial bonds qualify. The national government's bonds don't, because relations have ended. With no transaction exemption either, those bonds must be registered before the agent sells them. The antifraud rules cover both sales.
Source: Uniform Securities Act Section 402(a)(1) and (2) (government securities, including those of Canada, its provinces and any foreign government with which the United States maintains diplomatic relations)
Enforcement, liability and conflicts of interest
Question 12
An issuer in State A advertises its stock in a daily newspaper of general, paid circulation published there. Some copies are sold in State B. Under the Uniform Securities Act, is an offer made in State B through the ad?
- AYes, because the ad was directed to and received by readers in State B
- BNo, because the newspaper isn't published in State B
- CNo, because an issuer's offers count only in its home state
- DOnly if a reader in State B accepts the offer and buys
Answer: B
An offer is usually made in a state when it's directed and received there. The Act makes an exception for bona fide newspapers of general, regular and paid circulation published outside the state.
This paper is published in State A, so copies sold in State B make no offer there. Out-of-state radio and TV programs get the same treatment. In-state papers qualify only if over two-thirds of their past year's circulation was out of state.
Source: Uniform Securities Act Section 414(c) (when an offer is made in the state) and Section 414(e) (out-of-state newspapers and radio or television programs)
Question 13
An individual advises state residents on securities for an annual fee but never registers, and no exemption or exclusion applies. One client stops paying. The adviser sues the client under their contract for the unpaid fees. Under the Uniform Securities Act, what happens to the suit?
- AIt fails, because a violator can't base a suit on a contract made in violation
- BIt succeeds, because the client received the advice that was agreed on
- CIt succeeds if the adviser registers before trial, curing the violation
- DIt succeeds, though a court may separately fine the adviser for the violation
Answer: A
Acting as an investment adviser in the state without registering, with no exemption, violates the Act. The advisory contract was made in that violation.
The Act bars anyone who made or performed a contract in violation of it from basing a suit on that contract. So the adviser can't use the courts to collect the fees. Registering later doesn't change how the contract was made.
Source: Uniform Securities Act Section 410(h), NASAA-amended lettering (no suit on a contract made in violation of the Act) and Section 201(c) (investment adviser registration)
Question 14
A firm is registered as both an investment adviser and a broker-dealer. A customer with only a brokerage account calls to buy a corporate bond. The firm gives no advice and sells her the bond from its own inventory. Under the Uniform Securities Act, which statement is correct?
- AThe firm must disclose in writing that it's acting as principal and get her consent first
- BThe firm can't sell to her from inventory, because it's also registered as an adviser
- CThe adviser rule on principal trades doesn't apply, because the firm isn't acting as her adviser
- DThe firm must report the trade to the Administrator as a conflict of interest
Answer: C
An adviser trading as principal with an advisory client must disclose that in writing and get consent before the trade is completed. The rule has an exception. It doesn't cover a broker-dealer's customer when the firm isn't acting as an adviser on that trade.
This customer has only a brokerage account and got no advice. So the firm handles the order as an ordinary broker-dealer trade. Its usual broker-dealer duties still apply.
Source: Uniform Securities Act Section 102(a)(3) (principal trades with advisory clients, and the exception for a broker-dealer's customer when the firm isn't acting as an adviser)
Question 15
A state-registered adviser buys a thinly traded stock for its own account. The next day it recommends the stock to clients and sells into the rise their buying causes. It never discloses its trades. The research was sound, and clients profited too. Under the Uniform Securities Act, the adviser has:
- ADone nothing wrong, because its advice was sound and clients profited
- BDone nothing wrong, because it used no material nonpublic information
- CActed unlawfully only if it intended to harm its clients
- DEngaged in a fraudulent practice by trading on its advice without disclosure
Answer: D
Buying a stock, recommending it, then selling into the rise is called scalping. The adviser profits from its own advice.
The Act bars advisers from any practice that operates as a fraud or deceit on clients. The Supreme Court held that undisclosed scalping is such a practice under the matching wording of the federal Advisers Act, which the state Act follows closely. Sound advice doesn't excuse the practice. Intent to injure needn't be shown.
Source: Uniform Securities Act Section 102(a)(2) (advisory practices that operate as a fraud or deceit); SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180 (1963) (undisclosed scalping)
Is there an official Series 66 practice exam?
Not that we could find. FINRA's Series 66 page links no practice test, and NASAA's study guide has no sample questions. NASAA writes the exam, and it does publish two free documents that help:
- The test specifications. NASAA's Series 66 outline lists every topic in the four sections, with the number of questions each section gets. Use it as your study checklist.
- The study guide. NASAA's Series 66 study guide names the laws and rules each section can test. That list runs from the Uniform Securities Act to SEC rules and NASAA's own model rules.
FINRA lists the Series 7 as a corequisite for the Series 66. If you haven't passed it yet, try our free Series 7 practice test too.
How many questions are on the Series 66 exam?
The Series 66 has 110 questions, and 100 of them are scored. You get 150 minutes, and you need 73 right answers out of the 100 to pass.
| Detail | Series 66 |
|---|---|
| Scored questions | 100 |
| Unscored test questions | 10 |
| Time | 150 min |
| Pass mark | 73 of 100 |
The scored questions follow NASAA's four sections, split as in the figure at the top of this page. Your result is a count of right answers, so a blank can only cost you. Answer every question.
Our guide to the Series 66 exam covers who needs it, the Series 7 link and the format. If you're still choosing between exams, see our Series 65 vs 66 guide. For full-length practice, our Series 66 course includes three timed mock exams of 100 questions each, at the real section weights.
Series 66 practice test FAQs
Will these questions be on my Series 66?
No. NASAA owns the real exam questions and doesn't release them. We wrote these 15 for this page, on topics from NASAA's outline.
Is there math on the Series 66?
Some. Section 1's eight questions cover analytical methods such as net present value, financial ratios and the Sharpe ratio. Other sections list calculations too, such as bond yields and portfolio returns.
Which Uniform Securities Act does the Series 66 test?
The 1956 Act, as amended by NASAA. NASAA says the 2002 Act isn't tested, so your study material should use the 1956 Act's section numbers.
Is there a free Series 66 practice test PDF?
Not from NASAA or FINRA, as far as we could find. You can print this page instead: every question, answer and source is on it.
Related guides
Sources
- FINRA, Series 66 exam page: 100 scored and 10 unscored questions, 150 minutes, 73 of 100 to pass, and no practice test linked
- FINRA, Qualification Exams: the only practice test FINRA links is the SIE's
- NASAA, Series 66 Test Specifications (effective June 12, 2023): the four sections and their question counts
- NASAA, Series 66 study guide (September 1, 2023): closed book, unscored questions, the laws eligible for testing and the 1956 Act
- NASAA, Uniform Securities Act of 1956 with NASAA's amendments: Sections 102, 201, 401, 402, 410 and 414
- FINRA Regulatory Notice 10-09: how reverse convertibles repay shares below the knock-in level
- FINRA, The Complicated Risks and Rewards of Indexed Annuities: participation rates and caps
- 12 CFR 330.6 and 330.9: single accounts, and joint accounts insured separately by each co-owner's interest
- 26 CFR 1.1012-1: naming the shares you sell, and the earliest-lot default
- IRS, One-Participant 401(k) Plans: the owner contributes as both employee and employer
- IRS, Simplified Employee Pension Plan (SEP): only the employer contributes, up to 25 percent of pay
- IRS Publication 590-B: the beneficiary exception to the 10% additional tax, and a spouse who treats an inherited IRA as the spouse's own
- SEC v. Capital Gains Research Bureau, 375 U.S. 180 (1963): undisclosed scalping by an adviser is a fraud on clients
Every answer on this page is checked against the source it cites. Spotted an error? Tell us through the contact page and we'll fix it.