Cash, Fixed Income and Equity Securities
This topic covers deposits, money market instruments, bond valuation, equity types, shareholder rights, valuation factors, and public offerings.
How to study the Series 66
Treat the Series 66 as a dual-capacity exam: know the product, profile the client, then identify whether the person is acting as agent, adviser, or IAR.
Core concepts
Concept 1
Cash and cash equivalents emphasize liquidity, maturity, safety, and reinvestment considerations.
Exam cue: Classify the instrument before comparing risk and valuation.
Concept 2
Fixed-income valuation turns on maturity, coupon, ratings, call features, duration, premium, discount, and credit spread.
Exam cue: For fixed income, check duration, call risk, credit risk, and yield basis.
Concept 3
Equity securities involve common, preferred, convertible preferred, shareholder rights, dividends, restricted stock, IPOs, secondary offerings, and SPACs.
Exam cue: For equities, separate voting rights, dividend priority, and resale limits.
Risk pitfalls and guardrails
Treating agency or corporate debt like insured deposits.
Guardrail: Avoid answers that blur capacity, skip disclosure, ignore custody, or give unlimited administrator power.
Forgetting bond prices and rates usually move inversely.
Guardrail: Avoid answers that blur capacity, skip disclosure, ignore custody, or give unlimited administrator power.
Calling every stock sale an issuer offering.
Guardrail: Avoid answers that blur capacity, skip disclosure, ignore custody, or give unlimited administrator power.
Memory anchors
Demand Deposit
A demand deposit is cash available on demand at a depository institution.
Treasury Bill
A Treasury bill is a short-term U.S. government obligation sold at a discount.
Commercial Paper
Commercial paper is short-term unsecured corporate debt.
Duration
Duration estimates bond price sensitivity to interest-rate changes.
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.
Common Stock
Common stock represents residual ownership and usually voting rights.
Preferred Stock
Preferred stock has dividend priority over common stock.
Restricted Stock
Restricted stock has resale limitations.
IPO
An IPO is an issuer's first public sale of stock.
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
A client wants a short-term U.S. government instrument sold at a discount with no periodic interest payment. Which instrument fits?
A client asks what distinguishes a general obligation municipal bond from a revenue bond. Which statement is accurate?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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