Free Series 6 Exam Braindumps (page: 17)

Page 17 of 83

The "statement of additional information" (SAI) that mutual funds and closed-end funds are required to produce:

  1. must be provided to prospective investors whenever an offer to sell shares of these funds is made.
  2. must be sent to shareholders of the fund on at least a semiannual basis.
  3. usually contains some biographical information on the officers and directors of the fund.
  4. Both A and B are true statements.

Answer(s): C

Explanation:

The "statement of additional information" (SAI) that mutual funds and closed-end funds are required to produce usually contains some biographical information on the officers and directors of the fund. The SAI need only be provided to prospective investors upon request, and it is not sent to shareholders of the fund. Shareholders of the fund receive annual and semiannual reports from the fund, however.



Which of the following is an example of a primary market transaction?

  1. Exco Resources (XCO) sells a new issue of 7.5%, 8-year notes.
  2. Ms. Talker calls her broker and places a market order to sell shares of AT&T (T) on the NYSE.
  3. Mr. Safe purchases a Treasury bill with two weeks remaining to maturity.
  4. Mr. Green places an order to buy shares of Sunvalley Solar, Inc. (SSOL), a stock selling on the OTC Bulletin Board.

Answer(s): A

Explanation:

Exco Resources' new bond issue is a primary market transaction. The primary market refers to the market for new issues. The other three scenarios describe transactions in securities that are already being traded and are secondary market transactions.



Dottie is a newly-minted, registered representative and is doing some cold calling to line up appointments with prospects. When doing so, Dottie:

I). must not call anyone on her firm's do-not-call list.
II). must not call anyone on the FTC's national do-not-call-list.
III). must not call anyone before 7 a.m. or after 7 p.m., based on the time zone of the person being called.
IV). must provide the person called with her name, the name and contact information of her firm, and the purpose of her call.

  1. I and III only
  2. I and IV only
  3. I, II, and IV only
  4. I, II, III, and IV

Answer(s): C

Explanation:

Only Selections I, II, and IV are correct. When Dottie does her cold calling, she must not call anyone listed on either her firm's do-not-call list or the FTC's national do -not-call list, and she must provide the person called with her name, the name and contact information of her firm, and the purpose of her call. Under FINRA's telemarketing rules, she must not call anyone before 8 a.m. or after 9 p.m., based on the time zone of the person being called.



A preemptive right:

  1. is a call option that is usually attached to a bond as a sweetener.
  2. gives a bond owner the option to sell the bond back to the issuer at a pre-specified price.
  3. entitles its owner to buy shares of stock at a specified price within a specified time period in order to maintain his proportionate ownership in the firm.
  4. is a feature on some preferred stock issues that allows the preferred shareholders to exchange their preferred shares for shares of the common stock of the firm.

Answer(s): C

Explanation:

A right entitles its owner to buy shares of stock at a specified price within a specified time period in order to retain his proportionate ownership in a firm. As such, it is a call option, but it is not usually attached to a bond as a sweetener; that would be a warrant.



Page 17 of 83



Post your Comments and Discuss FINRA Series 6 exam with other Community members:

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asl commented on September 14, 2023
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Av dey commented on August 16, 2023
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