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FINRA Series6 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records | 50% | - Product features, risks, costs, and tax considerations - Recordkeeping and disclosure requirements - Suitability rules and recommendations - Variable contracts: variable annuities, variable life insurance - Investment company products: mutual funds, UITs, closed-end funds - Retirement plans and 529 savings plans |
| Topic 2: Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives | 16% | - Customer identification and verification - Account types and registration - Anti-money laundering (AML) and compliance - Financial profile and investment objectives assessment |
| Topic 3: Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions | 10% | - Error resolution and correction procedures - Payment and settlement processes - Order entry and processing procedures - Trade confirmations and account statements |
| Topic 4: Seeks Business for the Broker-dealer from Customers and Potential Customers | 24% | - Prospecting and identifying customer needs - Advertising and sales literature regulations - Communications with the public and regulatory rules - Telemarketing and solicitation rules |
FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. George Geek is 30 years old, single, and earns $103,000 a year as a software engineer for a small,
start-up IT company. George's company does not itself offer a retirement plan, and George is considering
his options. The current contribution limits for both the traditional IRA and Roth IRA plans is the lesser of
$ 5,000 or 100% of earned income. Which of the following statements applies to George's situation?
A) George's contributions to a traditional IRA will be tax-deductible.
B) Assuming that George can contribute to both the traditional IRA and the Roth IRA under the current
income thresholds, he will be allowed to contribute $5,000 to each of the plans.
C) George's contributions to a Roth IRA will be tax-deductible as long as his income is below the threshold
specified by the IRS for the current year.
D) Assuming that George can contribute to both a traditional IRA and a Roth IRA under the current
income thresholds, his combined contribution to the two plans cannot exceed $5,000.
2. Which of the following persons is not subject to the fingerprinting requirements of the Securities Exchange
Act of 1934?
I. a registered transfer agent of a securities exchange
II. a firm that engages only in the sale of mutual fund shares
III. a receptionist at a brokerage firm who answers phones and directs calls to the agents employed by the
firm
IV. a market maker in the over-the-counter market
A) I and III only
B) II and III only
C) III only
D) II, III, and IV only
3. Paul is 36 years old and is married with two children, ages eight and ten. Paul lays carpet for a living,
working as an independent contractor, and earns about $35,000 a year. His wife, Paula, is 33 years old,
drives a school bus and earns only $18,000 a year, but her job provides the family with low-cost health
insurance. They live conservatively and barely make ends meet. Paula recently inherited $180,000,
however, and the couple would like to invest it, with the goal that they can both retire when Paul turns
6 2.The inheritance also included an educational endowment for their children, so they will not have to
worry about saving for their children's college educations. Which of the following would not be a suitable
recommendation for the allocation of their investment monies?
A) municipal bond fund
B) Roth IRA
C) aggressive growth stock fund
D) life insurance
4. Which of the following statements regarding zero-coupon bonds is true?
A) All else equal, zero-coupon bonds will have less price fluctuation when interest rates change.
B) An advantage of investing in zero-coupon bonds is that the bondholder does not receive interest
income that he must pay taxes on each year and instead receives profits from the bond investment in the
form of tax-preferred capital gain income when the bond matures.
C) Although the bondholder receives no interim interest payments from his investment in zero-coupon
bonds, the difference between the purchase price and the maturity value of the bond is considered to be
interest income, and the bondholder must pay taxes on a percentage of this amount each year.
D) Only governments at the federal, state, or local levels, or government agencies are permitted to issue
zero-coupon bonds.
5. Tex Payor purchased 1,000 shares of Stocks4U, a mutual fund with a 5% front-end load, on February
2 6th.The fund's net asset value on that date was $30.40 and its offer price was $32.Tex sold his shares
on March 15th of the following year for $45 a share. What were the tax consequences for Tex?
A) Tex must pay taxes on $45,000, which will be taxed at a preferential long-term capital gain rate under
current tax law.
B) Tex must pay taxes on $14,600, which will be taxed as ordinary income at Tex's marginal tax rate.
C) Tex must pay taxes on $13,000, which will be taxed at a preferential long-term capital gain rate under
current tax law.
D) Tex must pay taxes on $14,600, which will be taxed at a preferential long-term capital gain rate under
current tax law.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: B | Question # 3 Answer: A | Question # 4 Answer: C | Question # 5 Answer: C |
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