QUESTION: 101

Which of the following types of securities would not be traded in the over-the-counter market?

I). stock options
II). government bonds
III). corporate bonds
IV). corporate stocks

I only
I and IV only
III and IV only
All of the choices are traded in the over-the-counter market.

Answer(s): D

Explanation:

All of the choices listed-and more-are traded in the over-the-counter market: stock options, government bonds, corporate bonds, and corporate stocks. Additionally, securities such as warrants, rights, forward contracts, and foreign currencies also trade in the over-the- counter market.

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QUESTION: 102

Giant Investments is introducing a new fund to its family of funds that it plans to name the Asian Fund. Giant may do so only if:

no other family of mutual funds has a fund with this name.
the fund has a policy to invest at least 80% of its assets in investments that are economically tied to Asian countries.
the fund's prospectus provides the specific criteria that will be used by the fund to select its investments.
Giant may do so only if both B and C are true.

Answer(s): D

Explanation:

Giant may only name the new fund the Asian Fund if the fund has a policy to invest at least 80% of its assets in investments that are economically tied to Asian countries and the fund's prospectus provides the specific criteria that will be used by the fund to select its investments.

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QUESTION: 103

Eddie and Edith open a JTWROS account with you. This means that:

I). You can accept a buy or sell order from either Eddie or Edith.
II). Any check that is drafted upon a request to withdraw funds can be written to either Eddie or Edith, or both.
III). If either Eddie or Edith die, the account assets will pass to that individual's estate, based on his or her percentage ownership of the account.
IV). Correspondence concerning the account can be sent to either Eddie or Edith.

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

Answer(s): C

Explanation:

Only Selections I and IV are true statements. If Eddie and Edith open a JTWROS account with you, you can accept a buy or sell order from either one of them, and any correspondence concerning the account can be sent to either one of them. However, a check must be made out to both of them, in the same manner that the account is titled. A JTWROS account is a "joint tenants with rights of survivorship" account, which means that if either Eddie or Edith die, the account assets pass directly to the other one and do not go into the deceased's estate.

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QUESTION: 104

The board of directors of a mutual fund is responsible for:

I). authorizing purchases and sales of securities made by the fund.
II). approving the fund's contract with its investment adviser.
III). ensuring that the fund complies with federal securities laws regarding such issues as 12b -1 fees.
IV). establishing the fund's dividend and capital gains policy.

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

Answer(s): C

Explanation:

The board of directors of a mutual fund is responsible for the activities described in Selections II, III, and IV only. The board is responsible for approving the fund's contract with its investment adviser, ensuring that the fund complies with federal securities laws regarding such issues as 12b-1 fees, and establishing the fund's dividend and capital gains policy. It is not involved in the fund's day-to-day operations, such as the purchases and sales of securities as described in Selection I.

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Free Series 6 Exam Braindumps (page: 26)

QUESTION: 101

Explanation:

QUESTION: 102

Explanation:

QUESTION: 103

Explanation:

QUESTION: 104

Explanation: