QUESTION: 77

Which of the following securities is not exempt from registration requirements?

private-placement variable universal life insurance
a revenue bond issued by the state of Florida to raise money to build an airport
a bond issued by the U.S. post office
a new issue of stock issued by a corporation that already has shares of its stock trading on the NYSE

Answer(s): D

Explanation:

A new issue of stock issued by a corporation that already has shares of its stock trading on the NYSE is not exempt from registration requirements. Private placements, municipal bonds, and bonds issued by U.S. government agencies are all exempt from registration requirements.

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QUESTION: 78

Main Street Capital Corporation (MAIN) is registered as a non-diversified investment company under the Investment Company Act of 1940.Based on this, which of the following statements regarding MAIN are true?

I). MAIN may not invest more than 5% of its investment monies in any single issuer.
II). The net asset value of MAIN's shares is likely to fluctuate more than that of a diversified investment company.
III). MAIN's returns are more likely to be affected by any single, specific economic occurrence or regulatory change.

I only
I and II only
II and III only
I, II, and III

Answer(s): C

Explanation:

Only Selections II and III are true. Because MAIN is a non-diversified investment company, it may invest more than 5% of its investment monies in a single issuer. This results in less risk diversification, so its net asset value is likely to fluctuate more than that of a diversified investment company. In addition, this means its returns are more likely to be affected by any single, specific economic occurrence or regulatory change.

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QUESTION: 79

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:

at par.
at a discount.
at a premium.
at its maturity value.

Answer(s): C

Explanation:

If the bond is priced to yield 3.5%, it will be selling at a premium. The coupon rate of 4% is also the bond's nominal rate, which is what the bond would be yielding if it were selling at its par value. If it is yielding less than this, it means that the bond is selling for more than its par value, which is the same as its maturity value. A bond that sells for more than its par value is said to be selling at a premium.

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QUESTION: 80

Mr. B. Beard started making regular investments in a mutual fund with the goal of financing a five-year circumnavigation on his 40-foot sailboat, "Pirate's Lady." He is getting ready to depart and wants to set up an automatic withdrawal plan such that the money he has invested will see him through his circumnavigation, with nothing remaining in the account at the end.
Which of the systematic withdrawal plans will best fit his needs?

fixed-percentage plan
fixed-share plan
fixed-time plan
fixed-dollar plan

Answer(s): A

Explanation:

Since Mr. Beard wants an automatic withdrawal plan such that the money will last through his circumnavigation, with nothing remaining at the end, he should elect to use the fixed - time plan. Under this plan, the fund determines how much it will redeem each period over the five years such that the account is depleted at the end of that time period. There is no way of knowing exactly how long Mr. Beard's money will last under the other three types of plans; it could be greater than or less than 5 years--or exactly 5 years for that matter.

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Free Series 6 Exam Braindumps (page: 20)

QUESTION: 77

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QUESTION: 78

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QUESTION: 79

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QUESTION: 80

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