Free NASAA Series 66 (Uniform Combined State Law Examination) Economic Factors and Business Information Practice Questions
Economic factors and business information on the NASAA Series 66 exam cover macroeconomic indicators, monetary and fiscal policy, financial statement analysis, quantitative methods, and fundamental valuation techniques.
77 questions30 easy28 medium19 hard2026 syllabus
Sample Questions
Question 1
Easy
All of the following statements about the time value of money are accurate EXCEPT:
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Correct Answer: A
Solution
A is correct. Present value moves inversely with the discount rate, so a higher discount rate produces a lower present value; the claim that present value rises as the discount rate rises is false and is the exception. The remaining statements correctly describe time value of money: money today can be invested to grow, more frequent compounding raises future value, and additional periods of discounting reduce present value.
Question 2
Medium
What is the present value of $25,000 to be received in 8 years, assuming a discount rate of 7% compounded annually?
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Correct Answer: C
Solution
C is correct. The present value of a single future cash flow is PV=FV/(1+r)n. Substituting, PV=25,000/(1.07)8=25,000/1.718186=$14,550.23.
Question 3
Hard
An investment adviser reviews a client's equity portfolio and notes that the R-squared versus the S&P 500 benchmark is 0.85. Which of the following is the most accurate interpretation of this statistic?
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Correct Answer: D
Solution
Choice D is correct because R-squared (the coefficient of determination) measures the proportion of a portfolio's return variance that is attributable to movements in the benchmark. An R-squared of 0.85 means 85% of the portfolio's variability in returns is explained by benchmark movements, with the remaining 15% due to factors specific to the portfolio.
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