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FINRA Series6 Exam Overview:

FINRA Series6 Exam Syllabus Topics:

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

1. Which of the following correctly describes a difference between closed-end and open-end investment
companies?

A) Open-end investment company shares will never be offered at a price below the net asset value per
share of the fund; this is not true of closed-end companies.
B) Open-end companies may invest in non-diversified portfolios; closed-end companies are required to
invest only in diversified portfolios.
C) Shares of open-end companies sell on exchange floors; shares of closed-end companies are bought
and sold through the company itself.
D) Open-end investment companies have a fixed number of shares; closed-end companies can create
new shares if there are more buyers than sellers.

2. Callie has a new client who wants to begin investing in mutual funds with the $5,000 she has pulled out of
her savings account. The client has indicated she wants to set this money aside in a separate account so
that her baby girl, now 2 years old, can have the "wedding of her dreams" when she grows up. Based on
the information the client has provided, Callie believes the client would benefit most by purchasing shares
of a certain fund that offers Class A, Class B, and Class C shares. Given these facts, Callie's client is
probably best off purchasing the shares of which class?

A) None of that above. Based on the facts, Callie's client would be better off buying a Treasury STRIP that
matures in 20 to 30 years.
B) Class A
C) Class C
D) Class B

3. Ms. Newbie has recently become licensed as a registered representative and is disappointed to discover
no clients standing in line at the door to her office at Savvy Investments. She decides she simply must
take on a second job in order to pay the rent. The fitness club to which she belongs is advertising for a
weekend receptionist, and the club manager has told her the job is hers if she wants it. Given this
scenario, Ms. Newbie:

A) can accept the job since it only entails weekend work, which does not conflict with the hours she works
as a registered representative.
B) can accept the job only if she tells her supervisor at Savvy that she will be working weekends.
C) can accept the job without any restrictions. She is not tied to Savvy by ball and chain, and her work as
a receptionist at a fitness club does not have anything to do with the financial industry.
D) must provide a written notice to Savvy Investments and await the firm's approval before accepting the
job.

4. Liz is a new client of yours. She is 36 years old, single, and has been working and earning a nice salary
since her graduation from high school. She has been contributing the maximum allowed to a TSA plan
through her employer, and you have no reason to doubt that she will meet her stated goal to retire when
she is 58.She also has a good health care plan through her employer and is in excellent health. She has
been depositing her non-retirement savings in a money market fund and is not pleased at the pathetic
return she has been earning on her current balance of $140,000. Liz has been reading some articles on
the web and understands she could allocate her funds to receive a higher return. She's willing to take on a
moderate level of risk, but needs your help. She informs you that she does plan to use $40,000 of her
current savings as a down payment for a condo and that her investment goals are to have money
available for travel and for unexpected expenses and periodic purchases such as new cars and new
furniture as the needs arise. She pays taxes at the highest marginal tax rate for individual tax payers.
Based on these facts, which of the following asset allocations would best meet her needs?
I. Money market fund: 30%; investment-grade corporate bonds: 20%; blue-chip stocks: 20%; high-yield
bonds: 10%; small cap stocks: 10%; foreign stocks: 10%
II. Money market fund: 10%; investment-grade municipal bonds: 5%; blue-chip stocks: 25%; high-yield
bonds: 25%; small cap stocks: 10%; foreign stocks: 25%
III. Money market fund: 10%; investment-grade municipal bonds: 25%; growth stocks: 40%; small cap
stocks: 15%; foreign stocks: 10%

A) III
B) II
C) Either II or III would be suitable recommendations.
D) I

5. NASDAQ market makers provide investors with assurance that:

A) NASDAQ market makers provide investors with no assurance whatsoever. It is "buyer beware."
B) there is a market for the listed security.
C) the investor will be investing in a high quality investment with relatively low risk.
D) the investor will be able to buy or sell the security at a price he desires.

Solutions: