QUESTION: 121

Ms. Pye has quit her job to become a full-time mother and wants to roll over the funds from her 401(k) plan into an IRA. As her financial adviser, you should tell her that:

this is unwise since she will have to pay both taxes and a penalty on the funds that are rolled over.
if she has the funds transferred directly from her 401(k) plan to the IRA, she will avoid having 20% withheld.
if she opts to take possession of the funds herself prior to depositing them in the IRA account, she must make the deposit within 30 days to avoid a 10% penalty.
both B and C

Answer(s): B

Explanation:

If Ms. Pye wants to rollover the funds from her 401(k) plan into an IRA, you should tell her that if she has the funds transferred directly from her 401(k) plan to the IRA, she will avoid having 20% withheld. She will not have to pay either taxes or a penalty on the funds that are rolled over if she follows specified guidelines, and if she opts to take possession of the funds herself prior to depositing them in the IRA account, she has 60 days in which to do so before a 10% penalty is assessed.

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QUESTION: 122

Mr. Big of HiGrow Corporation needs more money to support the exceptional growth rate that his firm is enjoying. He meets with BigFee Investment Banker, who agrees to handle the IPO for HiGrow. Subsequently, InTheLoop Brokerage is tapped to be part of the selling group that will handle the sale of the new stock to the public. In this example, the underwriter is:

Mr. Big
HiGrow Corporation
BigFee Investment Banker
InTheLoop Brokerage

Answer(s): C

Explanation:

BigFee Investment Banker is the underwriter in this example. The underwriter is the investment banking firm that helps a firm with the issue of new securities-which includes helping the firm file a registration statement with the SEC and establishing a selling group to facilitate the distribution of the securities to the public.

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QUESTION: 123

The URMoney Mutual fund, a no load fund, has 10 million shares outstanding. The market value of its assets is $620 million and its liabilities are $150. Based on this information, an investor who wants to buy shares of the fund will pay:

$62 a share.
$47 a share.
$15 a share.
This cannot be answered without knowing what, if any, the front-end load is.

Answer(s): B

Explanation:

Based on the information provided, an investor who wants to buy shares of the URMoney Mutual Fund will pay $47 a share. Since the fund is a no load fund, the shares can be purchased at the net asset value per share of the fund. Net asset value per share (NAVPS) = (market value of fund's assets - fund liabilities) ÷ total number of share outstanding, so NAVPS = ($620 million - $150 million) ÷ 10 million shares = $47.

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QUESTION: 124

All government bonds and the majority of corporate bonds are traded:

on the floor of the NYSE.
via electronic communication networks (ECNs).
on regional exchanges.
in the over-the-counter market.

Answer(s): D

Explanation:

All government bonds and the majority of corporate bonds are traded in the over-the- counter market.

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Free Series 6 Exam Braindumps (page: 31)

QUESTION: 121

Explanation:

QUESTION: 122

Explanation:

QUESTION: 123

Explanation:

QUESTION: 124

Explanation: