Series 66 key terms

The total market value of all final goods and services produced within a country during a given period, commonly used to gauge economic growth and overall activity.

A sustained rise in the general price level of goods and services, which reduces purchasing power and can lead central banks to raise interest rates.

Actions by a central bank, such as changing short-term interest rates or the money supply, intended to influence economic growth, employment, and inflation.

Government decisions about taxation and spending that affect total demand, economic growth, and the size of budget deficits or surpluses.

The recurring pattern of expansion and contraction in economic activity, often described through phases such as recovery, peak, recession, and trough.

A significant decline in economic activity spread across the economy, lasting more than a few months and typically visible in output, employment, and income.

A graph showing the yields on bonds of similar credit quality across different maturities, often used to infer expectations about future interest rates and growth.

An ownership interest in a corporation that usually carries voting rights and a residual claim on assets and earnings, with no promised dividend.

An equity security that typically pays a fixed dividend and ranks ahead of common stock for dividends and liquidation, often without voting rights.

A debt security in which an issuer borrows money from investors and promises to pay interest and repay principal according to stated terms.

The risk that a bond issuer will fail to make timely interest or principal payments, often assessed through credit ratings and financial analysis.

A debt security issued by a state, municipality, or related authority, often offering interest that may be exempt from federal and sometimes state income tax.

A pooled investment company that sells shares to investors and uses the proceeds to buy a diversified portfolio managed according to stated objectives.

A pooled investment fund whose shares trade on an exchange like stock and typically track an index, with intraday pricing and generally low costs.

The annual percentage of a fund's assets deducted to cover management fees and operating costs, reducing the return investors actually keep.

A contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price before expiration.

A financial instrument whose value depends on an underlying asset, index, or rate, often used to hedge risk or to speculate.

The risk that a bond or other fixed-income security will lose value when market interest rates rise, with longer maturities generally more sensitive.

A measure of a bond's price sensitivity to interest rate changes, expressed in years and combining maturity, coupon, and yield.

The process of dividing a portfolio among asset classes such as stocks, bonds, and cash to balance risk and return for an investor's goals.

Spreading investments across different securities, sectors, or asset classes to reduce the impact of any single holding's poor performance.

An investor's willingness and ability to accept declines in portfolio value in exchange for potentially higher long-term returns.

The length of time an investor expects to hold assets before needing the money, which influences how much risk may be appropriate.

The periodic buying and selling of portfolio holdings to restore target asset weights after market movements, helping maintain the intended risk level.

Market-wide risk that cannot be eliminated through diversification, such as changes in interest rates, inflation, or broad economic conditions.

The requirement that a recommendation or advice be consistent with a client's financial situation, objectives, risk tolerance, and needs.

Investing a fixed dollar amount at regular intervals regardless of price, which buys more shares when prices are low and fewer when high.

The original purchase price of an investment, adjusted for certain items, used to calculate capital gain or loss when the position is sold.

A legal obligation to act solely in another party's best interest, placing the client's interests ahead of the adviser's own.

A person or firm that, for compensation, engages in the business of advising others about securities, triggering registration and substantive obligations under securities laws.

An individual who provides investment advice on behalf of an investment adviser and is subject to registration, qualification, and conduct requirements.

The registration and disclosure document that investment advisers file with regulators, describing their business, fees, conflicts, and disciplinary history.

A model state law that forms the basis for many state securities statutes, covering registration of securities, broker-dealers, agents, and advisers, plus anti-fraud rules.

A firm that buys and sells securities for its own account or on behalf of customers and is subject to registration and regulatory oversight.

An individual who represents a broker-dealer in securities transactions, typically required to register in the states where they conduct business.

Buying or selling securities while in possession of material, nonpublic information in breach of a duty, which violates anti-fraud provisions.

Information that could affect an investor's decision and has not been disseminated to the public, creating a duty to refrain from trading or tipping.

The obligation to collect and verify information about a client's identity, finances, and objectives before making recommendations or opening accounts.

Compliance programs designed to detect and report attempts to disguise the proceeds of crime through the financial system, including suspicious activity reporting.

SEC rules providing exemptions from registration for certain private offerings, including limited sales to accredited investors and restrictions on resale.