QUESTION: 81

Anna Vestor placed an order to sell 100 shares of Microsoft through the on-line site of her broker, GetErDone Broker-Dealers. GetErDone sold her shares for $24.59 a share and charged her a commission of $8.95. Among other things, the trade confirmation that Anna receives must stipulate:

I). the time and date of the transaction.
II). that GetErDone served as a principal in the transaction.
III). the number of shares sold and the price at which they were sold.
IV). the exchange or ECN on which the transaction was executed.

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

Answer(s): A

Explanation:

Among other things, the trade confirmation that Anna receives must stipulate the items described in Selections I and III only. The trade confirmation that Anna receives from GetErDone must stipulate the time and date of the transaction, the number of shares sold, and the price at which they were sold. The exchange or ECN on which the transaction was executed is not provided on the confirmation statement. Whether GetErDone acted as a principal or a broker in the transaction does need to be stipulated, but in this instance GetErDone acted as a broker, not a principal. GetErDone did not itself buy the shares from Anna.

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QUESTION: 82

Which of the following is not one of the rules stipulated by the Securities Exchange Act of 1934?

All securities' exchanges and SROs are required to register with the SEC.
All brokers and dealers are required to be members of a national securities association.
Investment companies are prohibited from using any sales literature that contains an omission of a material fact.
Firms are required to send copies of their annual reports to investors before an annual meeting at which directors are to be elected.

Answer(s): C

Explanation:

The rule prohibiting investment companies from using any sales literature that contains an omission of a material fact is not one of the rules stipulated by the Securities Exchange Act of 1934. This involves the market for new securities and, as such, is a rule stipulated by the Securities Act of 1933. The 1934 Act deals with the secondary market.

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QUESTION: 83

Marge is 57 and wants to retire early. Since she is not yet eligible for social security, she wants to begin tapping a variable annuity to which she has been contributing for the last 20 years.
Which of the following statements regarding her withdrawals is true?

There is no way that Marge can begin making withdrawals without facing a 10% penalty for early withdrawal unless she is disabled or needs the money for medical expenses.
Marge can begin her withdrawals tax-free and without penalty under IRS rule 72(t) as long as she does so following the specific guidelines until she turns 59 ½, at which point she will no longer have to follow the specific guidelines.
Marge can begin her withdrawals tax-free and without penalty under IRS rule 72(t) as long as she does so following the specific guidelines for a period of five years.
Marge can begin her withdrawals without penalty under IRS rule 72(t) as long as she does so following the specific guidelines for a period of five years; however, the withdrawals will be subject to taxation.

Answer(s): D

Explanation:

Since Marge is only 57, she can begin her withdrawals without penalty under IRS rule 72(t) as long as she does so following the specific guidelines for a period of 5 years, but the withdrawals will be subject to taxation. Once she starts the program outlined in rule 72(t), she must remain on it for at least five years or until she turns 59 ½, whichever comes last. This means that although she's already 57 and will be turning 59 ½ in 2 ½ years, she will have to continue to follow the guidelines for a full five years, or until she turns 62, in this case.

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QUESTION: 84

Which of the following is a characteristic of a mutual fund?

shares may sell below net asset value
shares are bought and sold through the fund
shares are sold on exchange floors
the fund has a fixed number of shares that can be sold

Answer(s): B

Explanation:

Mutual fund shares are bought and sold through the fund itself. The shares will sell for at least net asset value, unlike shares of a closed-end investment company wherein prices are set by supply and demand forces. Mutual funds are open-end investment companies and have no fixed number of shares.

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Free Series 6 Exam Braindumps (page: 21)

QUESTION: 81

Explanation:

QUESTION: 82

Explanation:

QUESTION: 83

Explanation:

QUESTION: 84

Explanation: