Series 66 Podcast Episode 2 Investment Vehicles

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2.2 Investment Vehicle Characteristics
Seventeen questions in every Series 66 examination (17%) will test features or
characteristics or various types of investment vehicles. These seventeen questions will cover the
following twelve components:
(1) Types and Characteristics of Cash and Cash Equivalents
o Insured deposits (e.g., demand deposits, certificates of deposit)
o Money market instruments (e.g., commercial paper, Treasury bills)
(2) Valuation Factors of Fixed Income Securities
o Characteristics (e.g., tax implications, market liquidity, liquidation preference,
call features, coupon vs. zero coupon, duration, premium)
o Fixed income valuation factors (e.g., maturity, yield-to-call, yield-to-maturity,
conversion valuation, bond ratings, credit spread, discounted cash flow)
(3) Types of Equity Securities
o Common stock, domestic and foreign
o Preferred and convertible preferred stock
(4) Valuation Factors of Equity Securities
o Technical analysis
o Fundamental analysis
o Dividend discount
o Discounted cash flow
(5) Characteristics of Equity Securities
o Shareholder rights (e.g., voting rights, antidilution, liquidation preferences)
o Restricted Stock and resale restrictions
o Dividends
o Employee stock options (e.g., incentive, nonqualified)
(6) Equity Public Offering
o Initial public offering (IPO
o Secondary offering
o SPAC/blind pools/blank check
(7) Types of Pooled Investments
o Mutual funds (open-end vs. closed-end)
o Private funds (e.g., hedge funds, private equity funds, venture capital funds)
o Unit investment trusts (“UITs”)
o Exchange-traded funds (“ETFs”)
o Real estate investment trusts (“REITs) (including exchange listed and nontraded REITs)
(8) Characteristics of Pooled Investments
o Share classes
o Liquidity
o Tax implications
o Fee structures and other costs (e.g., load vs. no-load funds, contingent
deferred sales charges, Rule 12b-1 fees, breakpoints)
o Pricing (e.g., net asset value (“NAV”), discount/premium)
o Benefits and risks
o Relative comparisons (e.g., benchmarks, manager tenure, securities indexes)
(9) Futures and Options
o Definitions, uses, costs, benefits and risks
(10) Characteristics, Risks, and Application of Alternative Investments
o Exchange traded notes (“ETNs”)
o Leveraged funds
o Inverse funds
o Structured products
(11) Insurance Based Products
o Annuities (e.g., fixed, variable, equity indexed)
o Life insurance (e.g., whole, term, universal, variable)
(12) Other assets
o Commodities and precious metals
o Digital assets (e.g., definition, distinction, characteristics, risks