Cash, Cash Equivalents and Fixed Income
Fixed-income questions test maturity, coupon, yield, duration, credit, call features, and cash-equivalent safety and liquidity.
How to study the Series 65
Treat the Series 65 as an adviser competency exam: quantify risk, classify the product, profile the client, then apply fiduciary and registration rules.
Core concepts
Concept 1
Cash equivalents emphasize liquidity and principal stability but still have purchasing-power and reinvestment considerations.
Exam cue: For a bond, identify issuer, maturity, coupon, price, rating, and call feature.
Concept 2
Bonds expose investors to interest-rate, credit, call, reinvestment, liquidity, and inflation risks.
Exam cue: Use duration to compare interest-rate sensitivity.
Concept 3
Yield-to-maturity, yield-to-call, duration, coupon, premium, discount, and ratings are recurring decision points.
Exam cue: Do not confuse FDIC-style deposits with money market instruments.
Risk pitfalls and guardrails
Assuming all cash equivalents are insured deposits.
Guardrail: Avoid answers that skip client profile, risk, disclosure, custody, approval, or fiduciary analysis.
Forgetting callable bonds can create reinvestment risk.
Guardrail: Avoid answers that skip client profile, risk, disclosure, custody, approval, or fiduciary analysis.
Treating long maturity as low interest-rate sensitivity.
Guardrail: Avoid answers that skip client profile, risk, disclosure, custody, approval, or fiduciary analysis.
Memory anchors
Treasury Bill
A Treasury bill is a short-term U.S. government obligation sold at a discount.
Certificate of Deposit
A CD is a bank deposit that can have insurance and early-withdrawal limits.
Commercial Paper
Commercial paper is short-term unsecured corporate debt.
Coupon
Coupon is the stated annual interest rate on a bond.
YTM
Yield to maturity estimates return if held to maturity and payments occur as expected.
YTC
Yield to call estimates return if a callable bond is called.
Duration
Duration estimates price sensitivity to interest-rate changes.
Credit Rating
Credit ratings describe relative default risk, not a guarantee.
Call Feature
A call feature lets the issuer redeem the bond early.
Discount Bond
A discount bond trades below par value.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
An adviser describes money market instruments to a client. What characterizes money market instruments?
An adviser explains Treasury bills to a client. What is a distinguishing feature of a Treasury bill?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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