Series 65 Series 65 full analysis: what the $39 report shows

A real question from the full analysis

This is how each question you miss appears in the report. The question, the right answer, the explanation and the source are real. The answer shown as yours is an example, not anyone's data.

A single client has had income of $180,000 in each of the past two years. Her net worth is $1,350,000, including a $450,000 primary residence. She holds no professional licenses. A hedge fund offered by her adviser is open only to accredited investors. May she invest?

• A Yes, because her adviser holds a Series 65 license and that license qualifies the client
• B Yes, because she has had income above $150,000 in each of the past two years and owns her home
• C No, because her net worth without the residence is $900,000 and her income is under $200,000
• D Yes, because her stated net worth of $1,350,000 exceeds the $1 million threshold

Example answer, marked sure: A · Correct answer: C

C is correct. An individual is accredited by having more than $1 million of net worth excluding the primary residence, or income above $200,000 individually ($300,000 jointly) in each of the last two years, or by holding certain licenses such as the Series 7, 65, or 82. She meets neither money test: $1,350,000 minus $450,000 is $900,000. D counts the home. B uses a threshold that does not exist. A is wrong because the license test applies to the investor, not the adviser. Remember: the home is excluded from net worth.

Readiness by domain uses the weights of the real exam: Economic Factors and Business Information 15%, Investment Vehicle Characteristics 25%, Client Investment Recommendations and Strategies 30%, Laws, Regulations, and Guidelines Including Prohibition on Unethical Business Practices 30%.