One-Page Cheat Sheet

This is the whole book at a glance. It assumes you have already worked through the units; each line is a memory jog, not a first lesson. If a line reminds you that you forgot something, go back to that unit's rapid-fire sheet.

Analytical Tools & Core Securities (Economic Factors 8% + Investment Vehicles 17%)

• Analytical Methods: Time value of money says a dollar today beats a dollar tomorrow, so value cash flows with future value, net present value (accept when above zero), and internal rate of return, which equals a bond's yield to maturity; when the two conflict on mutually exclusive projects, follow net present value. Standard deviation is total risk, beta is systematic risk only, alpha is manager skill, the Sharpe ratio is return per unit of total risk, and low or negative correlation drives diversification that kills unsystematic but never systematic risk. Financial ratios size up the company (current and quick for liquidity, debt-to-equity for leverage) and valuation ratios ask whether the price is right (price-to-earnings, price-to-book against net asset value), but every ratio is meaningless in isolation, so always compare to peers, competitors, and history.
• Cash and Cash Equivalents: Cash equivalents split cleanly into insured bank deposits and uninsured money market instruments, and the exam lives on that line. Federal Deposit Insurance Corporation (FDIC) coverage of $250,000 per depositor, per bank, per ownership category applies to checking, savings, money market deposit accounts, and certificates of deposit, both negotiable and non-negotiable, but never to stocks, bonds, mutual funds, annuities, or money market funds. Commercial paper (1 to 270 days) and Treasury bills (state and local tax exempt) are the discount securities to know by maturity, and banker's acceptances, repurchase agreements, and federal funds round out the instruments tested. A money market fund is a security that can break the buck while a money market deposit account is an insured deposit, and the federal funds rate is market-determined, not Fed-set.
• Fixed Income Valuation: Bond prices move inversely to yields, and duration measures that sensitivity: a zero-coupon bond's duration equals its maturity while a coupon bond's is always less, and higher coupons or shorter maturities cut duration. Know the yield hierarchy cold, because it flips by pricing: coupon rate below current yield below yield to maturity for discount bonds, the reverse for premiums, all three equal at par. Yield to call sits outside that fixed order, because the assumed call terms decide where it lands. Municipal interest is generally tax-exempt, Treasuries are state-exempt only, and corporates are fully taxable, so a municipal bond earns its exemption only in a taxable account, never inside a retirement plan. Credit spreads widen in stress. Convertibles turn on conversion ratio times stock price versus the bond's market price.
• Equity Securities: Common stock is direct ownership with typically one vote per share, variable dividends the board can cut or skip, and last place at liquidation, which makes it the highest-risk claim but gives unlimited upside against a downside capped at the amount invested; foreign exposure through American Depositary Receipts trades in dollars yet keeps currency risk. Preferred stock is the hybrid: a fixed dividend rate (still declared, not guaranteed), priority over common, usually no vote, and bond-like interest-rate sensitivity. Convertible preferred always trades at the higher of its investment value or its conversion value, so run both numbers. Preferred is equity, not debt, so its dividends are not deductible to the issuer, though corporate investors can claim the dividends-received deduction.
• Equity Valuation Methods: Technical analysis reads charts, price, and volume to answer when to trade, assuming all information is already in the price, while fundamental analysis studies financial statements and ratios to answer what to buy by finding intrinsic value; within fundamental analysis, both top-down (economy first) and bottom-up (company first) hunt for that intrinsic value. The Dividend Discount Model prices a stock as the present value of future dividends, next year's dividend divided by required return minus growth, and it breaks when growth meets or exceeds the required return. Discounted Cash Flow generalizes this to the present value of any future cash flows, so it can value non-dividend growth companies, bonds, and real estate. A calculated value above market price signals undervalued, below signals overvalued, and higher risk means a higher discount rate and a lower valuation.
• Equity Characteristics: Common shareholders vote (cumulative stacks shares times open seats for the minority; straight favors the majority), hold preemptive rights, and stand last in liquidation. Restricted and control stock need 6 months for reporting issuers, 12 for non-reporting, affiliates keep volume limits (greater of 1% outstanding or average weekly volume) and Form 144, and the qualified institutional buyer safe harbor waives it for $100 million buyers. Dividends run declaration, ex-dividend, record, payment; the exchange sets the ex-date and price drops by the dividend. Incentive stock options go only to employees: no regular tax at exercise, an alternative minimum tax preference, a two-year grant, one-year exercise hold. Non-qualified stock options go to anyone, tax the spread as ordinary income at exercise, and earn an employer deduction an incentive stock option yields only on a disqualifying disposition.
• Equity Public Offering: An Initial Public Offering is a company's first stock sale, a primary offering where the issuer gets the proceeds and sets the price with the underwriter. Commitments turn on who bears the risk of unsold shares: firm commitment puts it on the underwriter; best efforts, all-or-none, and mini-maxi leave it with the issuer. The insider lock-up is contractual, not an SEC rule. A secondary offering is existing shareholders selling, so the company gets nothing and it is not dilutive, unlike a primary follow-on. A Special Purpose Acquisition Company raises money into trust, hunts a target for 18 to 24 months, then merges or liquidates, with the sponsor's roughly 20% promote as the hidden dilution; the penny-stock escrow rule misses an exchange-listed SPAC because the listing excludes it, not the price.

Packaged Products & Alternatives (Investment Vehicles, 17%)

• Pooled Investments: Open-end mutual funds price once daily at Net Asset Value with forward pricing and always trade there, while closed-end funds issue fixed shares and trade on an exchange at a premium or discount. Private funds (hedge, private equity, venture capital) are not broadly offered to the public; eligibility depends on the fund's investment-company exclusion and offering exemption, not one fixed test, fees often run 2 and 20, and lock-ups or capital calls keep them illiquid. Unit Investment Trusts hold a fixed portfolio to a termination date and redeem at Net Asset Value without active management; Exchange-Traded Funds trade intraday near Net Asset Value. Real Estate Investment Trusts distribute at least 90% of taxable income, generally as ordinary income; non-traded ones add illiquidity, high fees, and distributions that can come from investor capital.
• Pooled Investment Characteristics: Share classes trade upfront cost for ongoing cost: Class A carries a front-end load with breakpoints and low ongoing fees, Class B swaps that for a declining contingent deferred sales charge converting to Class A, and Class C uses a level load that traditionally does not convert, the costliest long-term hold. Open-end funds redeem daily at Net Asset Value; closed-end funds and Exchange-Traded Funds trade at market prices. Taxes flow through under Subchapter M's 90% distribution rule, fund capital gain distributions are always long-term regardless of your holding period, and in-kind redemptions keep Exchange-Traded Funds tax-efficient. 12b-1 fees cap at 0.75% distribution plus 0.25% service, the expense ratio excludes sales loads, and breakpoints, the Letter of Intent, and Rights of Accumulation apply only to Class A.
• Derivative Securities: A derivative gets its value from an underlying asset, and options are the most tested: the buyer pays a premium (the maximum loss) for a right while the writer takes the obligation, a call betting the price rises and a put betting it falls. Futures obligate both parties, are standardized and exchange-traded, settle daily by mark-to-market, and lean on a clearinghouse that nearly erases counterparty risk, with a margin call restoring initial margin through variation margin and margin itself a deposit, not a loan. Forwards are the customized over-the-counter version, so they carry higher counterparty risk, low liquidity, and settlement only at expiration. Leverage cuts both ways, losses on futures and short options can exceed the investment, time decay hurts buyers and helps sellers, and derivatives suit sophisticated hedgers far more than risk-averse investors.
• Alternative Investments: An Exchange-Traded Note is an issuing bank's unsecured IOU that tracks an index with no fund-style tracking error but full issuer credit risk, and its return can still diverge through secondary-market pricing, early sale, or product terms; an Exchange-Traded Fund actually holds the assets. Leveraged funds (2x, 3x) and inverse funds (-1x, -2x, -3x) reset exposure every trading day, so compounding decays value in choppy markets and they suit only short-term trading, never buy-and-hold. Structured products bundle a bond with derivatives into tailored payoffs (principal-protected notes, reverse convertibles, auto-callable notes) but add issuer credit risk, thin liquidity, capped upside, and hidden costs baked into an issue price above the issuer's initial estimated value. Name the credit risk, explain the daily-reset trap, and see through principal protection.
• Insurance-Based Products: Every insurance-based product turns on one question: who bears the investment risk? Fixed annuities, equity-indexed annuities, term, whole, and universal life leave the risk with the insurer, so they are insurance products regulated by state insurance departments, not securities. The moment the word variable appears (variable annuities, variable life, variable universal life), the owner picks subaccounts and bears the risk, which makes it a security registered with the SEC, sold with a prospectus, and sold only by someone holding both securities and insurance licenses. Lock in the variable-annuity details (mortality and expense charges, last-in-first-out ordinary-income taxation, the 10% tax before age 59 1/2, the accumulation-only death benefit) and the life-contingent payout ladder: life only pays most, joint and survivor least, fixed period depends on the term.
• Other Assets: Other Assets is one question: is it a security, and who regulates it? Commodity futures and options fall under the Commodity Futures Trading Commission, physical precious metals are not securities at all, a commodity Exchange-Traded Fund or a mining stock is a security under the SEC, and a commodity pool operator generally must register unless an exclusion or exemption applies. Digital assets turn on the Howey Test applied to the offer or sale (investment of money, common enterprise, expectation of profits, efforts of others, all four required), so Bitcoin is generally not sold as a security while many initial coin offering token sales are. Crypto generally has no Securities Investor Protection Corporation or Federal Deposit Insurance Corporation protection, lost private keys can mean lost assets in self-custody, and regulatory risk is its most distinctive danger.

Client Profiles & Financial Planning (Client Recommendations, 30%)

• Client Types: Two dividers organize this unit: liability (limited vs. unlimited) and taxation (pass-through vs. double). Sole proprietorships carry unlimited liability with pass-through Schedule C taxation, general and limited partnerships and S-corporations stay pass-through, and only the C-corporation is automatically double-taxed. A limited partner risks losing liability protection by managing, while a limited liability company (LLC) member never does and the LLC may itself elect C-corporation taxation. Trusts hinge on revocable (grantor keeps control, assets stay in the estate, no creditor shield) versus irrevocable (control surrendered, assets generally leave the estate, may gain creditor protection, files its own Form 1041), while estates are temporary preservation accounts. Private foundations must additionally distribute at least 5% of non-charitable-use assets annually, while both foundations and charities generally follow the Uniform Prudent Management of Institutional Funds Act.
• Client Profile Development: A client profile fuses financial facts (the four objectives, cash flow versus net worth, tax picture, and future obligations) with nonfinancial factors (values, biases, experience, and life events), and every recommendation must weigh all of them or risk being unsuitable. Risk tolerance splits into subjective willingness and objective ability, and when they conflict the lower, more risk-averse one should generally govern, just as time horizon lifts ability but never willingness. Match each goal to its own time-horizon bucket rather than the client's overall situation, and remember speculation can suit a client who can truly absorb the loss. Gather it all through mandatory Know Your Customer identification, questionnaires, and interviews, then generally document the rationale and update it as the client's life changes.
• Tax Considerations: Long-term gains (held over a year) and qualified dividends pay 0%, 15%, or 20%; short-term gains and ordinary dividends pay up to 37%. Net capital losses shave $3,000 of ordinary income a year, carried forward indefinitely; the wash sale rule disallows a loss when a substantially identical security is bought within 30 days either way. Gifts carry over the donor's basis, but inherited capital property generally steps up to fair market value at death, with inherited traditional IRAs taxable. C-corporations face double taxation at a flat 21%, S-corporations and partnerships pass income through whether or not distributed, and trusts and estates hit 37% over $16,000. Wealth transfer runs on a unified $15 million exemption (2026), a $19,000 annual gift exclusion, a 40% top estate rate, and portability to $30 million per couple.
• Retirement Plans: Individual Retirement Accounts split into Traditional (deductible in, ordinary income out, required minimum distributions at 73 or 75) and Roth (after-tax in, tax-free out, none for the owner), capped in 2026 at $7,500 under 50 and $8,600 at 50-plus; only deductibility, not the right to contribute, phases out, and Roth conversions ignore income limits. The Solo 401(k) stacks a $24,500 deferral onto employer profit-sharing up to $72,000 combined ($80,000 at 50+, $83,250 at 60-63) and allows loans IRAs never do. Qualified employer plans give the employer a deduction plus ERISA and creditor protection but forbid cherry-picking employees; nonqualified plans buy freedom to favor executives at the cost of an unsecured promise. The 457(b) has no early-withdrawal penalty and its own separate limit.
• ERISA Issues: ERISA covers private-sector retirement plans and defines a fiduciary by function: discretionary control over plan management or assets, or paid investment advice, all held to a prudent-expert standard across four duties (loyalty, prudence, diversification, plan compliance). Prudence is judged by process, not outcomes, and the Investment Policy Statement documents it even though ERISA does not require one. The participant-directed-plan safe harbor shields fiduciaries from participant-choice losses only when the plan offers at least three diversified options, quarterly transfers, sufficient information, and independent control, but it never excuses failing to select and monitor those options. Prohibited-transaction rules bar dealings with parties in interest (except necessary services at reasonable compensation), and self-dealing and kickbacks need a Department of Labor exemption; the Department enforces, the IRS levies excise taxes, and the fiduciary can be personally liable.
• Special Account Types: 529 plans have no income or age limits, cap K-12 expenses at $20,000, generally tax non-qualified earnings as ordinary income plus a 10% penalty with exceptions, and roll excess to a Roth IRA after 15 years up to $35,000. Coverdell Education Savings Accounts add income limits, a $2,000 cap, an age-30 deadline, and broader investments. Custodial accounts (uniform gifts to minors for financial assets, uniform transfers to minors for any property) are irrevocable; the minor takes control at majority, and unearned income above $2,700 is kiddie-taxed at the parent's rate. Health savings accounts carry the triple tax advantage but need a high-deductible health plan and levy a 20% penalty before 65; flexible spending accounts lack the growth leg and are use-it-or-lose-it.
• Ownership and Estate Planning: Joint tenancy, Payable on Death and Transfer on Death accounts, and beneficiary designations bypass probate but stay in the taxable estate, and those designations override the will for that account; a stale ex-spouse beneficiary may still inherit, since many states auto-revoke on divorce but ERISA plans generally do not. Tenancy by the entirety shields from creditors; community property gets a double step-up. A revocable living trust avoids probate but does not cut estate tax, while an irrevocable trust generally removes assets from the estate and may shield them from creditors, both depending on the grantor giving up prohibited powers; a testamentary trust hits probate. A Qualified Domestic Relations Order splits employer plans penalty-free for a spouse alternate payee, and a Donor Advised Fund trades an irrevocable gift for a deduction while appreciated securities dodge capital gains.

Portfolio Strategy & Performance (Client Recommendations, 30%)

• Capital Market Theory: Capital market theory rests on three models and one recurring question: which risk measure does each use? The Capital Asset Pricing Model prices individual assets on systematic risk (beta) as risk-free rate plus beta times the market premium, and the Security Market Line flags anything above it as undervalued, below it as overvalued. Modern Portfolio Theory shifts to the whole portfolio, measuring total risk by standard deviation and building the efficient frontier from low-correlation assets, so diversification strips out unsystematic risk while systematic risk stays. The Efficient Market Hypothesis then asks whether you can beat the market at all: weak form kills technical analysis, semi-strong kills technical and fundamental, and strong form kills even insider edges.
• Portfolio Management Strategies: Strategic asset allocation sets long-term target weights from goals, risk tolerance, and time horizon, then rebalances back to them, while tactical allocation deliberately deviates to time the market. Active management chases a benchmark while passive replicates it, growth pays a premium for future earnings while value buys a discount to intrinsic value, and income prioritizes cash flow while capital appreciation prioritizes long-term growth. Diversification substantially reduces unsystematic but never eliminates systematic risk, sector rotation rides cyclical versus defensive sectors through the cycle, and dollar-cost averaging locks in a lower average cost than average price whenever prices fluctuate. Options round it out with the protective put (a downside floor), covered call (income, capped upside, a cushion not a floor), and collar (both sides capped), while leverage under Regulation T's 50% initial margin magnifies gains and losses alike.
• Portfolio Performance Measures: Current yield is annual income over current price and moves inversely to price, sitting below the coupon on a premium bond and above it on a discount bond, while total return and holding period return add price change plus income over beginning value. When the exam asks about the manager use time-weighted return (cash flows removed, generally required by GIPS); when it asks about the investor's own experience use dollar-weighted return, commonly the internal rate of return. Judge risk with Sharpe (total risk, standard deviation) for a whole portfolio and Treynor (systematic risk, beta) for one of many, and read positive alpha as beating the Capital Asset Pricing Model prediction rather than merely rising. Always benchmark against a matching style, cap size, and geography, because a small-cap fund measured against the S&P 500 evaluates nothing.
• Trading Securities: A quote pairs the bid (highest buyer price) with the ask (lowest seller price), and the spread between them is an implicit round-trip cost that generally widens as liquidity thins. Orders trade off execution against price: market offers the greatest certainty of execution (not guaranteed), limit guarantees price, a stop becomes a market order when triggered, and a stop-limit becomes a limit order. A broker-dealer wears one hat per trade, agent (commission) or principal (markup or markdown) but never both, while custodians safeguard assets, market makers supply liquidity off the spread, and exchanges provide the regulated venue. Lock in Regulation T's generally 50% initial margin from the Federal Reserve, FINRA's generally 25% maintenance floor and 5% markup guideline, and the rule that best execution applies to principal and agency trades alike.

Laws, Regulations & Ethics (Laws & Regulations, 45%)

• Securities and Issuer Regulation: A security is read broadly; an investment contract is caught only when all four Howey prongs are met (money, common enterprise, expected profits, efforts of others), so economic reality beats the label: a variable annuity counts, a fixed annuity does not. Securities register federally on disclosure, never SEC approval, and by state through coordination, qualification, or filing, unless an exempt security or transaction applies; transaction exemptions never carry to resales. Federal covered securities escape state registration, though fund shares and Regulation D placements may owe a notice filing while exchange-listed shares owe none. Accredited status turns on $200,000 or $300,000 income, $1 million net worth excluding the home, credentials, insider roles, or an entity's $5 million test. States keep unwaivable antifraud authority: exempt from registration never means exempt from fraud liability.
• Investment Adviser Regulation: An investment adviser is anyone who, for compensation, is in the business of advising on securities, unless an exclusion fits, such as professionals whose advice is solely incidental or a bank itself, never its subsidiary. Assets under management draw the line: $110 million and up goes to the SEC, and $25 million to under $100 million generally registers with the state. Federal covered advisers only notice file where they have a place of business or more than 5 non-institutional clients; states keep antifraud power everywhere. State registration is effective at noon on the 30th day, while the SEC must grant or institute denial proceedings within 45 days. Form ADV Part 2A is the client brochure, and the annual update does not split by regime: both run 120 days after fiscal year-end and owe nothing when nothing material changed.
• Investment Adviser Representative Regulation: An investment adviser representative is always an individual who does at least one of five things: recommends securities, manages accounts, decides which advice is given, solicits advisory services, or supervises those who do; clerical staff doing none of these are not representatives. For a federal covered adviser, the SEC test applies only above the more-than-5 and more-than-10% natural-person thresholds, and not if an exclusion fits (no regular client contact, or impersonal advice only). A state can require registration only where the representative has a place of business; registration is state-level only, on Form U4, with automatic consent to service of process. Designation waivers excuse the exam, not the registration, and NASAA-rule states require 12 continuing education credits a year. Registration expires each December 31, and the administrator can examine, deny, suspend, or revoke.
• Broker-Dealer Regulation: A broker effects trades for others for a commission, a dealer trades its own account for a markup or markdown, and most firms do both, so the label describes the capacity on a given trade; agents, issuers, banks, savings institutions, and trust companies are excluded. Underwriters bring new securities out under firm commitment (the underwriter bears the risk), best efforts (the issuer does), or all-or-none, a type of best efforts. Market makers quote two-sided on a regular basis, and associated persons are everyone but the solely clerical. Broker-dealers register federally and in every state where they do business, keep books on set retention schedules, confirm trades in writing, and supervise. Supervision means a designated principal at each office of supervisory jurisdiction, written procedures established, maintained, and enforced, advertising approved before use, and tiered branch inspections.
• Agent Regulation: Under the Uniform Securities Act an agent is an individual who represents a broker-dealer or issuer in effecting or attempting to effect securities transactions, so attempting alone counts and an agent is always a natural person. The exclusions (exempt securities, exempt transactions, some federal covered securities, no-commission deals with existing employees) mainly help individuals representing issuers; representing a broker-dealer leaves only the narrow federal de minimis exclusion, and clerical staff are not agents. Agents never register independently: the sponsoring firm files Form U4, they pass required exams, and they consent irrevocably to service of process. Registration takes effect at noon on the 30th day, expires each December 31, and ends on leaving the firm. The broker-dealer files Form U5 within 30 days, and the agent and affected employer each notify the Administrator of a change.
• Remedies and Administrative Provisions: The state securities administrator runs the administrative track: rules and orders, investigations inside and outside the state, subpoenas, and denial, suspension, or revocation of registrations, but never fines, jail, damages, restitution, or disgorgement. Any felony within 10 years or a securities-related misdemeanor is grounds, and every action needs the public-interest finding too. Due process means notice, hearing, and written findings first, except a summary order while a proceeding is pending, set for hearing within 15 days of a written request; a final order is appealable within 60 days, and the appeal does not pause it. The civil track belongs to the injured investor, who recovers consideration plus interest, costs, and fees minus income received, within 2 years of discovery or 3 of sale. The criminal track belongs to the prosecutor: $5,000 and 3 years for willful violations.
• Client Communication: Advisers owe full and fair disclosure of every material fact as a fiduciary duty; broker-dealers follow the antifraud standard, and an omission is as fraudulent as a lie. Registration is a filing, never an endorsement or a finding of competence, so stating your status is fine but implying a regulator vouched for you is a violation. You can never guarantee against loss, though profit/loss sharing needs written authorization from both the customer and the broker-dealer. Qualified clients may be charged a gains-only performance fee, and contract terms must be written with no assignment absent consent (a minority partnership change is the exception). Advertising is fair, balanced, and not misleading; testimonials need heavy disclosure and written promoter agreements; performance ads need 1-, 5-, and 10-year periods; marketing records live five years, the first two on-site.
• Ethical Practices and Fiduciary Obligations: Every compensation model carries a conflict: fee-based aligns interests, commissions tempt over-trading. A gains-only performance fee needs a qualified client, while a symmetrical fulcrum fee applies to a registered investment company or any client above $1 million and needs no such test. Pay-to-play freezes government work for two years above the de minimis, and soft dollars buy only eligible research and brokerage. Custody, including fee deduction and withdrawal-capable login access, triggers a qualified custodian, quarterly statements, and an annual surprise exam unless the fee-deduction or pooled-vehicle exception applies. Discretion may start orally with written authority within 10 days. Guard against loans, unauthorized profit-sharing, insider trading, selling away, manipulation, and churning, protect eligible adults with mandatory reports and a fifteen-business-day hold, and meet the privacy, safeguards, and written continuity rules.

The Math: Calculations to Know Cold

The Series 66 leans on laws and ethics, so the math is a small, well-defined slice. The catch reported again and again: you often only need to recognize a formula and reason about what moves it, not grind a hard calculation. Know each one cold, and do not get thrown by red-herring numbers dropped in to distract you.

Know these cold (the exam's favorites are the balance-sheet equations and standard-deviation concepts):

• The accounting identity: Assets equal Liabilities plus Owners' Equity. Nearly every balance-sheet question rests on it.
• Working capital: current assets minus current liabilities. The cushion of short-term resources.
• Current ratio: current assets divided by current liabilities. Above 1 means short-term bills are covered.
• Quick (acid-test) ratio: (current assets minus inventory) divided by current liabilities. The stricter liquidity test.
• Debt-to-equity: total debt divided by total equity. Higher means more leverage and more financial risk.
• Earnings per share and price-to-earnings: earnings per share is net income (less preferred dividends) over shares; price-to-earnings is market price divided by earnings per share.
• Book value per share: equity minus preferred, divided by common shares. Mostly a concept, but know what it represents.
• Dividend payout and retention: payout is dividends divided by net income; retention is one minus payout. Watch the trap that dividends are quoted annually.
• Current yield: annual income divided by current market price. Moves inversely to price.
• Present and future value: future value compounds (present value times (1 plus rate) raised to the periods); present value discounts back. Expect concepts, not a brutal calculation.
• Tax-equivalent yield: the tax-free municipal yield divided by (1 minus the tax bracket). Turns a muni into its taxable equivalent for comparison.
• Averages: the simple mean is sum divided by count. Know it before the fancier statistics.

Lower-yield, mostly recognize-and-reason (a question or two at most):

• Rule of 72: 72 divided by the rate approximates the years to double.
• Sharpe ratio: excess return (return minus the risk-free rate) divided by standard deviation. Return per unit of total risk.
• Alpha: actual return minus the return the capital asset pricing model predicted. Positive alpha beats the benchmark.
• Net present value and internal rate of return: accept a positive net present value; the internal rate of return equals a bond's yield to maturity. Concepts far more than computation.
• Treasury Inflation-Protected Securities: principal adjusts with inflation, and the fixed coupon rate is paid on that adjusted principal.

What they will not make you grind:

• Yield to maturity as a full calculation (understand the concept and the yield hierarchy instead).
• Complex options or margin math. Know the roles and the caps, not heavy multi-leg computation.

Reality check: Multiple test-takers report the same thing: they recognized more formulas than they actually calculated. Treat the math as a short list to lock down and be able to identify on sight, not a mountain to fear. Every person's exam draws a different mix.

That's the whole exam on one page. If you can read each line and hear the full unit behind it, you're ready.