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FINRA Series6 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Obtains and Verifies Customers' Purchase and Sales Instructions | 10% | - Order processing and transaction procedures
|
| Provides Customers with Information About Investments | 50% | - Investment company securities and variable contracts
|
| Opens Accounts After Obtaining and Evaluating Customer Financial Profile | 16% | - Customer account types and documentation
|
| Seeks Business for the Broker-Dealer from Customers and Potential Customers | 24% | - Prospecting and communication with clients
|
FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. After a registration statement has been filed with the SEC, no offers to sell the security to the public can
be made for:
A) a maximum of 20 days.
B) a minimum of 30 days unless the SEC grants an exception.
C) a minimum of 20 days unless the SEC grants an exception.
D) a maximum of 30 days.
2. The stock of eBay, Inc. (EBAY) currently has a beta of 1.67. Based on this, which of the following
statements are necessarily true?
I. If the market is up 5%, an investor can expect the returns on eBay to increase by 1.67 times this amount,
or 8.35%.
II. eBay would be a particularly good investment for an investor with a short investment horizon.
III. The returns on eBay are more volatile than the returns on the market in general.
IV. eBay has more unsystematic risk than the market in general.
A) I and II only
B) I only
C) I and III only
D) I, II, III, and IV
3. Clem Shyster is a registered representative with a family of mutual funds. A married couple in their 50s
sought his advice about how they should best invest an $80,000 profit that they had received when they
sold a rental property they owned for a number of years. Their investment profile indicated to Clem that
their main investment objective was capital appreciation and that they were willing to accept moderate
levels of risk. Clem advised them to invest $10,000 in eight different growth funds, each of which had a
7 % front-end load. Has Clem violated any securities laws with his recommendation?
A) Yes. Clem should have advised them to invest in funds that had a deferred sales charge instead of a
front-end load.
B) Yes. There is a lot of overlap of the individual stocks in which growth funds invest, so recommending
that they spread their funds among eight different growth funds has not provided them with significantly
more diversification, and it has cost them more to do so, which will benefit Clem.
C) Yes. Although growth funds provide some amount of capital appreciation, Clem should have
recommended that they spread their money among eight different aggressive growth funds instead, to
achieve even greater capital appreciation.
D) No. Growth funds invest in stocks that are selected to provide the capital appreciation that Clem's
clients need, and an investment in eight such funds will provide them with maximum risk diversification.
4. Tex Payor is an investor in the Invest4U Mutual Fund. The manager of the fund, fearing a substantial
decline in the stock market, sold a lot of the fund's holdings to lock in profits. As a result, the fund earned a
lot of long-term capital gain income. Which of the following statements is true regarding the tax treatment
of this income?
A) Tex must pay taxes on that portion of the long-term capital gain income that Invest4U distributes to
him.
B) Tex must pay taxes on his proportionate share of the long-term capital gain income earned by Invest4U,
whether distributed or not.
C) None of the above is a true statement.
D) Tex must pay taxes only on dividend income distributed by Invest4U.The mutual fund itself pays tax on
any capital gains it earns.
5. As her college graduation present, Jennifer's grandmother gave her 200 shares of the stock of IBM. Her
grandmother had purchased the shares for $54 a share in October 2002, and the stock was selling for
$ 132 a share on the day of Jennifer's graduation eight years later. Eight months after her graduation,
Jennifer decides to sell the shares to get money to help with the down payment on a condo she is
purchasing. If IBM is selling for $125 on the day of the sale, what are the tax consequences of this sale for
Jennifer?
A) Jennifer will have a loss of $1,400, which will be treated as a short-term capital loss for tax purposes.
B) Jennifer will have taxable income of $15,600, which will be taxed as long-term capital gain income at a
tax-preferred rate.
C) Jennifer will have taxable income of $14,200, which will be taxed as long-term capital gain income at a
tax-preferred rate.
D) Jennifer will have taxable income of $14,200, which will be taxed as long-term capital gain income at a
tax-preferred rate.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: A | Question # 5 Answer: C |






