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Series 6

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Quiz on Series 6, created by Zach Taylor on 03/08/2016.
Zach Taylor
Quiz by Zach Taylor, updated more than 1 year ago
Zach Taylor
Created by Zach Taylor over 7 years ago
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Resource summary

Question 1

Question
Which of the following statements is true regarding separate accounts and general accounts?
Answer
  • both types of accounts are registered under the Investment Company Act of 1940
  • both types of accounts pay a guaranteed minimum return
  • the sub accounts of variable annuity may include both types of accounts
  • General accounts hold bonds while separate accounts hold equities

Question 2

Question
The method of determining the offering price of an open-end investment company is
Answer
  • shown in the prospectus
  • set by the SEC
  • the net asset value plus commission costs
  • based upon the supply and demand for securities

Question 3

Question
Which of the following is most likely to cause the nav of a bond mutual fund to decline?
Answer
  • the FED tightens the money supply
  • inflation decreases
  • the S&P 500 Index Rises at a 6% annual rate
  • the treasury Department Dotrice is the amount of treasury bills being issued

Question 4

Question
Upon examining the prospectus of an open-end investment company, you notice that the net investment income increased at a greater rate than did the gross investment income. From this fact you may assume that
Answer
  • there was an increase in the shares outstanding
  • the fund retained most of its dividend income for that period
  • the fund invested in growth companies stocks that are characterized as paying a low rate of dividends
  • the expenses of the fund increased at a lower rate over that period

Question 5

Question
What is covered by the code of procedure?
Answer
  • just and Equitable business conduct and Equitable principles of trade
  • standardization of trading practices in the OTC market among members
  • complaints involving Trade Practices of members
  • anti-fraud measures involving new issues

Question 6

Question
If the current dividend distribution of a company's common stock has increased by 7%, while the market price has increased by 9%, the current yield of this stock has
Answer
  • increased
  • decreased
  • remained the same
  • fluctuated greatly

Question 7

Question
Which of the following terms could be applied to a mutual fund that does not charge a front-end load or a contingent deferred sales charge, but which does have a 12b - 1 fee of 1%?
Answer
  • no load
  • level load
  • spread load
  • directly marketed fund

Question 8

Question
An insurance company May override a variable life policy holders right to I. Vote to change the investment policies of the separate account I I. Receive a proxy, if available Iii. Reject the selection of an investment adviser to the separate account
Answer
  • I only
  • 2 and 3 only
  • one two and three
  • none of the above

Question 9

Question
When examining the bid and ask quotations of two over-the-counter stocks that you follow, you notice that the spreads between their bid and ask prices are dramatically different. From this, you could probably assume that
Answer
  • the stock with the narrower spread is more active than the stock with the wider spread
  • the stock with the wider spread is more active than the stock with the narrower spread
  • the stock with the wider spread will always be less expensive in the long run
  • no conclusion can be drawn from this information

Question 10

Question
Which of the following is not a characteristic of an exchange?
Answer
  • set standards for Securities that trade on it
  • provides a place for buyer and sellers of Securities to meet
  • is the market where investors usually buy and sell mutual funds
  • must comply with SEC rules

Question 11

Question
The net investment income from an open-end investment company consist of
Answer
  • all profits from the investment companies operation
  • dividends, interest, and net capital gains on sales of portfolio securities
  • only net capital gains on sales of portfolio securities
  • only net income from dividends and interest paid on Securities in the fund's portfolio

Question 12

Question
Someone is interested in international investing. The RR send the prospect a prospectus for an international Equity Fund. Which of the following May the RR do in order to help the client understand that the risks of the fund?
Answer
  • highlight the relevant sections of the prospectus
  • create a short summary of the funds risk and give it to the client
  • provide the client with supplemental sales literature about the fund
  • tell the client to ignore the prospectus and read the statement of additional information instead

Question 13

Question
An investor wishes to establish a tax loss but still wants to own the same security. The customer sells the security at a loss and repurchase is it two weeks later. The tax loss is
Answer
  • established
  • recognized
  • disallowed
  • amortized

Question 14

Question
The rep has prepared a script and a slide presentation for a seminar. She will also hand out a brochure created by her firm and a prospectus for the funds. And this situation all of the following should be filed with finra except
Answer
  • the script
  • the slide presentation
  • the prospectus
  • the brochure

Question 15

Question
Which of the following statements is true of both common and preferred stocks?
Answer
  • both have a fixed dividend
  • the board of directors must declare the dividends for both
  • both are guaranteed to receive an annual dividend
  • both have an equal vote on corporate issues

Question 16

Question
Which of the following employment activities would RRs not have to report to their employing broker-dealer
Answer
  • , part-time employment as a bartender
  • participating as a silent partner in a relative's business
  • acting as the manager of a sporting good store on the weekends
  • operating an internet business from home as a sole proprietor

Question 17

Question
When making a recommendation of a high-risk mutual fund to a customer, which of the following is least important?
Answer
  • financial status
  • tax status
  • investment objectives
  • ability to sustain a large loss

Question 18

Question
Which of the following is a municipal Bond? Back by the full faith and credit of the issuer?
Answer
  • debenture
  • a revenue Bond
  • GO Bond
  • an income bond

Question 19

Question
The cash value of a variable life insurance policy is calculated
Answer
  • daily
  • weekly
  • monthly
  • annually

Question 20

Question
An investor who writes a check on a mutual fund account is
Answer
  • borrowing money from a bank
  • drawing on a cash deposit
  • redeeming mutual fund shares
  • using a revolving charge facility

Question 21

Question
An investor has been investing $100 a month and a contractual plan that has a 50% sales charge in the first year and a 4% sales charge per year after the first. What is the total amount of sales charge paid during the first 17 months?
Answer
  • $93
  • $450
  • $600
  • $620

Question 22

Question
Which of the following investment companies will not charge a management fee?
Answer
  • open-end investment companies
  • closed-end investment companies
  • face amount certificate companies
  • unit Investment trusts

Question 23

Question
Which of the following would be found in a mutual fund prospectus?
Answer
  • a list of Securities in the fund's portfolio
  • the phone's current nav
  • a description of the management fee
  • a balance sheet

Question 24

Question
An individual invest $400 per month into a front-end load contractual plan for 12 months and now wishes to terminate the plan. How much would the individual receive upon termination of the plan?
Answer
  • the total amount invested
  • the value of the account plus the sales charge
  • the value of the account plus a portion of the sales charge
  • nothing

Question 25

Question
One Prime objective objective of the Investment Company Act of 1940 is to
Answer
  • ensure that practices on stock exchanges are similar throughout the country
  • control the OTC market and prevent another market crash
  • ensure that individual investors are provided with full and fair disclosure regarding securities
  • ensure that individuals investing in investment company shares are fully informed and fairly treated

Question 26

Question
The value of an Investor's interest in a variable annuity during the accumulation period it's subject to fluctuation according to the
Answer
  • AIR
  • amount of money deposited
  • performance of the separate account

Question 27

Question
A company declares dividend, payable on June 5th to stockholders of record on May 20th. An investor who buys the stock and a regular way transaction on Tuesday, May 19th
Answer
  • is entitled to the dividend
  • is not entitled to the dividend because the stock is already selling ex-dividend
  • is entitled to a due bill
  • cannot settle the trade until June 5th

Question 28

Question
The Johnsons want to purchase life insurance that will provide the potential for appreciation of future benefits, but are uncertain how much to purchase due to the unpredictable nature of Alan's income. Which of the following is the most appropriate
Answer
  • whole life insurance
  • variable life insurance
  • universal life insurance
  • variable universal life insurance

Question 29

Question
A method of voting that gives larger substantial stockholders a greater degree of voting power over the smaller, less substantial stockholders would be
Answer
  • statutory voting
  • cumulative
  • voting by proxy
  • special majority voting

Question 30

Question
And uncle is a custodian for his minor nephews account. The nephew receives rights to subscribe to additional shares of stock held in the account. As custodian, the uncle can
Answer
  • sell the rights
  • subscribe to the stock offering
  • buy additional rides to subscribe if additional rights are needed
  • do whatever he considers to be in the best interest of the minor

Question 31

Question
An open-end investment company with the objective of growth wishes to change its investment objectives to growth and income. This may be done with
Answer
  • a majority vote of outstanding shares
  • a majority vote of the outstanding shareholders
  • at least 90% consent of the outstanding shareholders
  • the unanimous vote of the board of directors

Question 32

Question
If a customer has been refused an extension after 5 business days and has not paid for stock, and member firm
Answer
  • must cancel or otherwise liquidate the transaction by selling out the Securities promptly
  • must Sue the customer for the money
  • May Grant an extension if the member Deans the customer to be reliable
  • must close the customer's account

Question 33

Question
An investor who is studying various funds Holdings is interested in an equity income fund. The investor would most likely choose a fun holding Securities of
Answer
  • companies that consistently an above average income
  • companies with a liberal payout ratios
  • growth companies
  • companies whose bonds are rated investment grade

Question 34

Question
The management fee that a mutual fund pays to its investment advisor is
Answer
  • based on the amount of assets under management
  • part of the acquisition cost the purchaser must pay
  • a cost to the sponsor of the fund
  • a non-recurring expense of the sponsor

Question 35

Question
A US Government Bond is selling in the Market at 95.28. The dollar value of this bond is
Answer
  • $950.87
  • $952.80
  • $958.75
  • $9,587.50

Question 36

Question
The customer receives a confirmation for a Securities transaction. The confirmation discloses that the broker-dealer acted in the capacity of a dealer. This means the firm acted
Answer
  • agent
  • intermediary
  • principal
  • broker
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