• Exam Code: Series6
  • Exam Name: Investment Company and Variable Contracts Products Representative Examination (IR)
  • Certification Provider: FINRA
  • Corresponding Certification:FINRA Certification
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FINRA Series6 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Provides Customers with Information About Investments50%- Investment company securities and variable contracts
  • 1. Risks, disclosures, and performance reporting
    • 2. Mutual funds and ETFs characteristics
      • 3. Variable annuities and insurance-based products
        Topic 2: Opens Accounts After Obtaining and Evaluating Customer Financial Profile16%- Customer account types and documentation
        • 1. Suitability and KYC requirements
          • 2. Account registration and ownership types
            Topic 3: Obtains and Verifies Customers' Purchase and Sales Instructions10%- Order processing and transaction procedures
            • 1. Order entry and confirmation
              • 2. Settlement and trade verification
                Topic 4: Seeks Business for the Broker-Dealer from Customers and Potential Customers24%- Prospecting and communication with clients
                • 1. Marketing investment company products
                  • 2. Ethical sales practices and communications rules

                    FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:

                    Question 1

                    Which of the following is true about a hedge fund?

                    A. It has very low management fees since it is passively managed.
                    B. It is designed to help investors hedge their risk and, as such, is a low risk alternative to a mutual fund.
                    C. It is more liquid than almost any investment other than a money market mutual fund.
                    D. It is closed to all but sophisticated, wealthy investors.


                    Question 2

                    Which of the following relationships regarding shares of common stock are necessarily true?
                    I. shares outstanding > issued shares
                    II. authorized shares >= issued shares
                    III. issued shares = treasury shares
                    IV. issued shares >= shares outstanding

                    A. I and II only
                    B. I, II, and III only
                    C. II and IV only
                    D. II, III, and IV only


                    Question 3

                    Tex Payor bought shares of the Stocks4U Mutual Fund on February 26th.During the year, the fund sold
                    some of the stocks in which it was invested, generating long-term capital gain income for the fund. Tex
                    received a distribution of some of these gains at the end of the year, based on his proportionate
                    ownership of the fund. Which of the following statements is true regarding the tax consequences of this
                    distribution to Tex?

                    A. There are no tax consequences to Tex. Mutual fund investors are taxed only on dividend distributions
                    and on capital gains realized when they sell shares of a fund that they own. Capital gains earned by the
                    fund when securities are bought and sold by the fund's manager are taxed to the fund.
                    B. Tex will have to pay tax on the distribution at his marginal tax rate. Since Tex had not been invested in
                    the fund for over 12 months when the distribution occurred, it is considered to be short-term capital gain
                    income for him, which is taxed as ordinary income.
                    C. Tex will have to pay tax on the distribution unless he opts to reinvest the distribution in the fund, in
                    which case the income will not be taxable.
                    D. Tex will have to pay tax on the distribution at the tax rate for long-term capital gains, which are currently
                    taxed preferentially.


                    Question 4

                    When the U.S. dollar appreciates relative to other world currencies,
                    I. the prices of all domestic stocks and bonds can be expected to increase.
                    II. the prices of securities offered by manufacturers that import a lot of their parts can be expected to
                    increase.
                    III. an increase in the purchase of U.S. securities by foreign investors can be expected.

                    A. I and II only
                    B. I, II, and III
                    C. II only
                    D. III only


                    Question 5

                    Which of the following are fiscal policy tools under the jurisdiction of the U.S. Congress?

                    A. Both A and B are fiscal policy tools.
                    B. the decision on the amount of cash reserves that a bank must hold
                    C. the decision on whether to raise or lower effective tax rates
                    D. the decision on whether to raise or lower the rate at which banks can borrow money from the Federal
                    Reserve.


                    Solutions:

                    Question 1
                    Answer: D
                    Question 2
                    Answer: C
                    Question 3
                    Answer: D
                    Question 4
                    Answer: C
                    Question 5
                    Answer: C

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