FINRA Investment Company and Variable Contracts Products Representative Examination (IR) (Series6) Free Practice Test
Question 1
On which of the following items do mutual fund shareholders get to vote?
I. any change in the investment objective of the fund
II. the election of a new investment adviser
III. the renewal of the fund's 12b-1 fee
IV. the purchase or sale of real estate by the fund
I. any change in the investment objective of the fund
II. the election of a new investment adviser
III. the renewal of the fund's 12b-1 fee
IV. the purchase or sale of real estate by the fund
Correct Answer: B
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Question 2
Which of the following qualifies as an insider under the definition provided by the Securities Exchange Act
of 1934?
I. a member of the board of directors of a firm
II. the vice-president of marketing of a firm
III. an investor who owns 5% of the voting stock of the firm
IV. the daughter of the CEO of a firm
of 1934?
I. a member of the board of directors of a firm
II. the vice-president of marketing of a firm
III. an investor who owns 5% of the voting stock of the firm
IV. the daughter of the CEO of a firm
Correct Answer: A
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Question 3
Which of the following entities is eligible to establish a Keogh Plan?
Correct Answer: A
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Question 4
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?
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?
Correct Answer: B
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Question 5
Your client has recently heard about "principal-protected funds" and has asked your advice. You should
tell her that:
I. the majority of principal-protected funds guarantee the investor's initial investment, less any front-end
load, even if the stock market falls.
II. it would not be a good investment if she thinks she will need the money within the next five to ten years.
III. it will beat the returns she could earn on an S&P 500 Index fund in most years.
IV. if she sells her shares at any time other than the maturity date specified, she could lose money if the
price per share has fallen.
tell her that:
I. the majority of principal-protected funds guarantee the investor's initial investment, less any front-end
load, even if the stock market falls.
II. it would not be a good investment if she thinks she will need the money within the next five to ten years.
III. it will beat the returns she could earn on an S&P 500 Index fund in most years.
IV. if she sells her shares at any time other than the maturity date specified, she could lose money if the
price per share has fallen.
Correct Answer: A
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Question 6
Mr. and Mrs. R. Retired are planning on traveling extensively throughout the U.S. in their new motor home
now that they have reached their golden years. Under FINRA rules, upon written instructions from Mr. and
Mrs. R. Retired, their broker is required to hold their mail for a maximum of:
now that they have reached their golden years. Under FINRA rules, upon written instructions from Mr. and
Mrs. R. Retired, their broker is required to hold their mail for a maximum of:
Correct Answer: B
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Question 7
Mr. Fast Lane met an early death at the age of 42. Mr. Lane had been making contributions to a variable
annuity contract for several years, and at the time of his death, his contributions totaled $25,000.Although
the value of the contract had at one time reached $40,000, earnings included, a downturn in the market
has resulted in a contract value of only $23,000.How much will Mr. Lane's beneficiaries receive as the
death benefit associated with this contract under these circumstances?
annuity contract for several years, and at the time of his death, his contributions totaled $25,000.Although
the value of the contract had at one time reached $40,000, earnings included, a downturn in the market
has resulted in a contract value of only $23,000.How much will Mr. Lane's beneficiaries receive as the
death benefit associated with this contract under these circumstances?
Correct Answer: A
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Question 8
A bond has a face value of $1,000, matures in 12 years, and pays an 4% coupon, with interest paid
semiannually. If the bond is priced to yield 3.5%, it is selling:
semiannually. If the bond is priced to yield 3.5%, it is selling:
Correct Answer: D
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