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ModuleS66

Series 66: Uniform Combined State Law Exam

Prepare for Series 66: Uniform Combined State Law Exam with practice questions covering 27 topics. Build your knowledge, track your progress, and study effectively with GoFINRA.

Questions
2,813
Units
4
Topics
27

What’s in it.

4 units

Sample questions

3 of many

A few questions from this module, with the answer and a full explanation. The complete bank is available when you start practising.

  1. What happens when a sell stop order (stop-loss order) is triggered?

    • The order becomes a limit order at the stop price
    • The order executes at exactly the stop price
    • The stop order becomes a market order and is executed at the best available price
      Correct answer
    • The order is canceled and the investor is notified to place a new order
    Explanation

    A stop order (stop-loss order) has two components: (1) a stop price — when the stock trades at or through this price, the order is triggered; and (2) once triggered, the stop order converts to a market order and executes at the best available current price. The investor is NOT guaranteed execution at the stop price — in a fast-moving market, the stock could gap through the stop price and execute well below it. This is the key risk of stop orders.

  2. What is a Real Estate Investment Trust (REIT)?

    • A REIT is a mutual fund that exclusively invests in shares of real estate companies traded on stock exchanges.
    • A REIT is a company that owns, operates, or finances income-producing real estate and is structured to pass through at least 90% of taxable income to shareholders as dividends, receiving favourable pass-through tax treatment.
      Correct answer
    • A REIT is a private limited partnership that allows accredited investors to pool capital for commercial real estate development.
    • A REIT is a type of mortgage-backed security issued by Fannie Mae or Freddie Mac to finance residential real estate.
    Explanation

    A REIT is a company structure (not a fund or limited partnership) that owns, operates, or finances income-producing real estate — including office buildings, apartment complexes, shopping centres, hotels, data centres, or mortgages. To qualify as a REIT and receive pass-through tax treatment (avoiding corporate-level taxation on distributed income), a REIT must meet several requirements under IRC Section 856, including distributing at least 90% of its taxable income to shareholders as dividends. Listed REITs trade on stock exchanges and are highly liquid; non-traded and private REITs exist with less liquidity.

  3. What is the primary requirement for being eligible to contribute to an HSA?

    • The individual must be under age 65 with low income
    • The individual must be enrolled in a qualifying High-Deductible Health Plan (HDHP)
      Correct answer
    • The individual must have no existing health savings accounts or FSAs
    • The individual must be self-employed with no employer-sponsored health coverage
    Explanation

    The sole eligibility requirement for HSA contributions is enrollment in a qualifying High-Deductible Health Plan (HDHP). An HDHP has a minimum annual deductible and maximum out-of-pocket limit set by the IRS. Additionally, the individual cannot be enrolled in Medicare, claimed as a dependent on another's return, or have disqualifying other health coverage. Enrollment in an HDHP is the cornerstone requirement.