Investment Company and Variable Contracts Products Representative Exam (FINRA Series 6)
The Series 6 exam - the Investment Company and Variable Contracts Products Representative Qualification Examination (IR) - is designed to test the competency of an entry-level candidate to perform their job as an investment company and variable contracts products representative. The exam seeks to measure the degree to which each candidate can perform the critical functions of such a representative, and ensure that all proper rules and regulations are followed in the candidate's execution of the role.
The Series 6 exam was created to qualify candidates as Investment Company and Variable Contracts Products representatives. The exam seeks to measure the degree to which each candidate can perform the critical functions of such a representative, and ensure that all proper rules and regulations are followed in the candidate's execution of the role.
Question 1
Which of the following securities is MOST suitable for an investor specifying a preservation of capital investment objective?
A.
1 year certificate of deposit
B.
10 year Treasury note
C.
20 year AAA-rated secured corporate bond
D.
30 year general obligation bond
Question 2
A 48 year old investor contributes $60,000 to a non-qualified variable annuity. 15 years later, the account has grown to $140,000. They request a one-time distribution of $100,000. What is the tax consequence of the distribution?
A.
$100,000 taxed as ordinary income plus an early withdrawal penalty
B.
$20,000 taxed as a capital gain, $80,000 considered a tax-free return of principal
C.
$20,000 taxed as a capital gain plus an early withdrawal penalty, $80,000 considered a tax-free return of principal
D.
$80,000 taxed as ordinary income, $20,000 considered a tax-free return of principal
Question 3
Share classes with longer CDSC periods are most associated with what open-end management company share class?
A.
Class B
B.
Class D
C.
Class A
D.
Class C
Question 4
Which of the following best describes a research report?
A.
Written or electronic communication including a recommendation distributed to 15 or more persons
B.
Written or electronic communication including a recommendation distributed fewer than 15 persons
C.
Written or electronic communication including a recommendation distributed to 25 or more persons
D.
Written or electronic communication including a recommendation distributed to more than 25 persons
Question 5
All of the following are components of an open-end management company's expense ratio, EXCEPT:
A.
Legal fees
B.
Sales charges
C.
Management fees
D.
Custodial charges
Question 6
An investor meets with the investment adviser representative to discuss various life insurance products. The client prefers to make predictable, fixed premium payments over time. Additionally, they want to ensure they will receive some value back in case they no longer need the life insurance in the future and decide to forfeit the contract. Additionally, they are comfortable with the risks of investing, as they believe long term investments generally rise in value. What form of life insurance is most appropriate for the client?
A.
Term life insurance
B.
Universal life insurance
C.
Variable life insurance
D.
Universal variable life insurance
Question 7
A married couple in their early 30s are both clients of yours and are in need of investment advice. Their combined annual income is $750,000, and they currently have investment accounts with a balance of $500,000. Their entire portfolio is invested in money markets. If the couple maintains an aggressive risk tolerance and an investment objective of growth, what portfolio allocation should you recommend?
A.
80% stocks / 5% bonds / 15% money markets
B.
85% stocks / 10% bonds / 5% money markets
C.
60% stocks / 30% bonds / 10% money markets
D.
70% stocks / 20% bonds / 10% money markets
Question 8
A dispute arises between a firm and a customer, which is presented and eventually resolved through arbitration. All of the following terms are associated with arbitration, EXCEPT:
A.
Public hearings
B.
Formal
C.
Binding
D.
Public disclosure
Question 9
A 79 year old customer of yours owns a Traditional and Roth IRA at your firm. Their RMD for the current year is calculated at $13,000. Throughout the year, they take $3,900 of distributions from the Traditional IRA, and $8,350 from the Roth IRA. The following year, they realize they did not distribute the entire RMD. If no exception or waiver is requested, what is the amount of the penalty?
A.
$375
B.
$875
C.
$4,550
D.
$5,050
Question 10
A customer of yours asks you several questions regarding a 529 plan they want to create and fund for a family member. Which of the following statements is false?
A.
529 plans potentially offer tax-free growth
B.
529 plan contributions are generally non-tax deductible
C.
529 plans are state-sponsored plans
D.
Up to $1,000 of 529 funds may be used annually for education expenses not relating to college
Achievable Series 6 - $129
Pass the FINRA Series 6 on your first try with Achievable's interactive online exam preparation course. Includes everything you need: easy-to-understand online textbook, 800+ chapter review quizzes, and 35+ full-length practice exams.
Easy-to-understand online textbook
800+ chapter quizzes
35+ practice exams
14+ bonus videos
FINRA's Series 6 exam summary
Seeks Business for the Broker-Dealer from Customers and Potential Customers
24%
12 questions
Contacting current and potential customers by any method. Developing promotional and advertising material, and seeking appropriate approvals to distribute them. Describing investment products and services to current and potential customers with the intent of soliciting business.
Opens Accounts After Obtaining and Evaluating Customers' Financial Profile and Investment Objectives
16%
8 questions
Informing customers of the types of accounts and providing appropriate disclosures. Obtaining and updating customer information and documentation, including required legal documents and suspicious activity. Obtaining customer investment profile information. Obtaining required supervisory approvals.
Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets, and Maintains Appropriate Records
50%
25 questions
Providing customers with investment strategies, risks and rewards, and relevant market and investment research data. Reviewing customer investment profiles to determine investment recommendations. Providing required disclosures regarding investment products and their risks. Communicating with customers about their accounts and maintaining documentation.
Obtains and Verifies Customers' Purchase and Sales Instructions; Processes, Completes and Confirms Transactions
10%
5 questions
Providing current quotes, processing and confirming customer transactions including regulatory requirements, and informing customers of delivery obligations and settlement procedures. Informing the appropriate supervisor and assisting in resolution of disputes or errors.
Pass the FINRA Series 6. Guaranteed.
Achievable is the best online exam prep course: effective, personalized, and convenient. With Achievable, you'll spend less time studying and pass your exam the first time, or your money back.