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FINRA Series6 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Obtains and Verifies Customers' Purchase and Sales Instructions | 10% | - Order processing and transaction procedures
|
| Seeks Business for the Broker-Dealer from Customers and Potential Customers | 24% | - Prospecting and communication with clients
|
| Provides Customers with Information About Investments | 50% | - Investment company securities and variable contracts
|
| Opens Accounts After Obtaining and Evaluating Customer Financial Profile | 16% | - Customer account types and documentation
|
FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. After having been divorced for several years, Mrs. Blended has remarried a man with three children of his
own. She has set up a revocable trust in which she deposited funds that she inherited when her mother
died, so that the monies will go uncontested to her two biological children in the event of her own death.
These two adult children are the only beneficiaries of the trust. Mrs. Blended has no plans to touch any of
the money in the trust unless circumstances demand it in the future. The trust is invested in a mutual fund
that paid $500 in dividend income and distributed $3,000 in long-term capital gain income to the trust this
year. Which of the following statements is true regarding the tax treatment of these distributions?
A) Mrs. Blended must pay taxes on the $3,500 in distributions.
B) Assuming her two adult children are equal beneficiaries, each one is responsible for paying tax on 50%
of the income to the trust, or $1,750.
C) The distributions will not be taxed at this point; they will be taxed as part of the estate upon Mrs.
Blended's death.
D) The distributions will not be taxed at this point; they will be taxed only when Mrs. Blended or her
beneficiaries make withdrawals from the trust.
2. Liz is a new client of yours. She is 36 years old, single, and has been working and earning a nice salary
since her graduation from high school. She has been contributing the maximum allowed to a TSA plan
through her employer, and you have no reason to doubt that she will meet her stated goal to retire when
she is 58.She also has a good health care plan through her employer and is in excellent health. She has
been depositing her non-retirement savings in a money market fund and is not pleased at the pathetic
return she has been earning on her current balance of $140,000. Liz has been reading some articles on
the web and understands she could allocate her funds to receive a higher return. She's willing to take on a
moderate level of risk, but needs your help. She informs you that she does plan to use $40,000 of her
current savings as a down payment for a condo and that her investment goals are to have money
available for travel and for unexpected expenses and periodic purchases such as new cars and new
furniture as the needs arise. She pays taxes at the highest marginal tax rate for individual tax payers.
Based on these facts, which of the following asset allocations would best meet her needs?
I. Money market fund: 30%; investment-grade corporate bonds: 20%; blue-chip stocks: 20%; high-yield
bonds: 10%; small cap stocks: 10%; foreign stocks: 10%
II. Money market fund: 10%; investment-grade municipal bonds: 5%; blue-chip stocks: 25%; high-yield
bonds: 25%; small cap stocks: 10%; foreign stocks: 25%
III. Money market fund: 10%; investment-grade municipal bonds: 25%; growth stocks: 40%; small cap
stocks: 15%; foreign stocks: 10%
A) II
B) III
C) I
D) Either II or III would be suitable recommendations.
3. An order to buy or sell a stock at the prevailing market price is called a(n):
A) limit order.
B) stop order.
C) open-ended order.
D) market order.
4. Which of the following statements about primary market transactions is true?
A) In a primary market transaction, the issuer of the security receives the proceeds from the sale of the
security.
B) A primary market transaction is defined as a transaction that is executed on either the NYSE or
NASDAQ. Transactions that take place on ECNs are secondary market transactions.
C) A primary market transaction refers to the trading of stocks; a secondary market transaction is defined
as a transaction that involves bonds.
D) Both A and B are true statements.
5. The American Funds family of funds offers numerous funds to investors. Among these are a U.S.
government bond fund, a high-yield corporate bond fund, a diversified emerging markets fund, and a large
stock growth fund. Of these four, the one that would expose the investor to the most social and political
risk is its:
A) diversified emerging markets fund.
B) high-yield corporate bond fund.
C) large stock growth fund.
D) U.S. government bond fund.
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: A | Question # 5 Answer: A |
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