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FINRA Series6 Exam Syllabus Topics:

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

Question 1

Mr. Big of HiGrow Corporation needs more money to support the exceptional growth rate that his firm is
enjoying. He meets with BigFee Investment Banker, who agrees to handle the IPO for HiGrow.
Subsequently, InTheLoop Brokerage is tapped to be part of the selling group that will handle the sale of
the new stock to the public. In this example, the issuer is:

A. Mr. Big
B. InTheLoop Brokerage
C. HiGrow Corporation
D. BigFee Investment Banker

Question 2

An exchange-traded fund (ETF):

A. is bought and sold at the net asset value of the fund.
B. can be structured as either a mutual fund or a unit investment trust.
C. charges no management fees.
D. is a type of closed-end investment company.

Question 3

Which of the following statements about 1035 exchanges are true?
I. A 1035 exchange refers to the exchange of all of the shares owned in one mutual fund for shares of
another mutual fund in the same family of funds.
II. A 1035 exchange refers to the exchange of one variable annuity contract for another variable annuity
contract without the need to pay tax on any of the income or capital appreciation associated with the
original contract.
III. A 1035 exchange refers to the exchange of a variable annuity contract for a whole life insurance policy
offered by the same company with no tax consequences to the transaction.

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

Question 4

Ms. Pye has quit her job to become a full-time mother and wants to roll over the funds from her 401(k)
plan into an IRA. As her financial adviser, you should tell her that:

A. both B and C.
B. this is unwise since she will have to pay both taxes and a penalty on the funds that are rolled over.
C. if she opts to take possession of the funds herself prior to depositing them in the IRA account, she must
make the deposit within 30 days to avoid a 10% penalty.
D. if she has the funds transferred directly from her 401(k) plan to the IRA, she will avoid having 20%
withheld.

Question 5

Which of the following is not a feature associated with an investment in preferred stock?

A. The preferred stock may be convertible to common stock.
B. Preferred shareholders usually have the right to vote on members of the board of directors, mergers,
and shareholder proposals.
C. If a dividend payment is skipped, it must typically be made up before common shareholders can
receive any dividends.
D. The dividend is typically a fixed amount.

Solutions: