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FINRA-SERIES-6 Exam Questions & Answers

Exam Code: FINRA-SERIES-6

Exam Name: FINRA Investment Company and Variable Contracts Products Representative Examination (IR)

Updated:

Q&As: 325

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Practice These Free Questions and Answers to Pass the FINRA Certifications Exam

Questions 1

Which of the following statements regarding CMOs is false?

A. CMOs are zero-coupon bonds that are backed by real estate.

B. Relative to other bonds, CMOs are illiquid.

C. CMO investors are divided into classes, and the class determines when the investor will receive payments of principal.

D. CMOs are considered to have lower risk and, therefore, offer lower returns.

Show Answer
Questions 2

The Invest4U Mutual Fund is a regulated investment company under Internal Revenue Code Subchapter M. This means that:

A. Invest4U must submit an annually-updated prospectus to the IRS as well as to the SEC.

B. Invest4U does not itself have to pay taxes on any dividend or capital gain income it receives and distributes to its shareholders.

C. Invest4U is a UIT.

D. Invest4U is a non-diversified management company.

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Questions 3

Which of the following activities are permitted during the “cooling off” period associated with a new offering?

I. A preliminary prospectus may be provided to prospective investors.

II. The security can be registered in any states in which it will be sold.

III. The management of the issuing firm may give interviews in which they discuss the market for their products and future revenue expectations.

IV.

The underwriter of the issue may run a tombstone advertisement in the Wall Street Journal to announce the upcoming offering.

A.

I only

B.

I and IV only

C.

I, II and IV only

D.

I, III and IV only

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Questions 4

Which of the following portfolios best represents a suitable asset allocation for a risk-averse investor?

I. Cash/money market fund: 20%; government bonds: 10%; investment-grade bonds: 15%; foreign stocks: 10%; blue-chip stocks: 25%; high-yield bonds: 10%; small cap stocks: 10%

II. Cash/money market fund: 30%; government bonds: 20%; investment-grade bonds: 15%; foreign stocks: 3%; blue-chip stocks: 25%; high-yield bonds: 0%; small cap stocks: 7%

III.

Cash/money market fund: 10%; government bonds: 5%; investment- grade bonds: 10%; foreign stocks: 15%; blue-chip stocks: 25%; high-yield bonds: 10%; small cap stocks: 25%

A.

I

B.

II

C.

III

D.

None of the above; a risk -averse investor should be entirely invested in government securities and/or money market funds.

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Questions 5

Which of the following statements regarding a letter of intent is true?

A. An investor has 12 months in which to invest the amount stipulated in the letter.

B. Reinvested dividends and capital gain distributions count toward the amount stipulated in the letter of intent.

C. An investor who signs a letter of intent and does not invest the amount stipulated must make up the difference between the sales charge he paid and what he should have paid, plus interest.

D. A letter of intent may be backdated up to 90 days so that any purchases made during that prior time period will count toward making a breakpoint.

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