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Free Series 6 Exam Braindumps (page: 33)

Page 33 of 83
PDF with 325 Questions

A face-amount certificate company:

  1. is a company that invests primarily in bonds that sell at either par value or a premium.
  2. is an investment company that has management fees.
  3. sells its debt, which is backed by the assets owned by the company, to its investors.
  4. is all of the above.

Answer(s): C

Explanation:

A face-amount certificate company sells its debt, which is backed by the assets owned by the company, to its investors. It does not invest primarily in bonds that sell at or above par value, and it does have management fees that are paid to the portfolio managers of the company.



Pete Prophet, the manager of a bond mutual fund, is expecting interest rates to increase. All else equal, which of the following bonds would be the best investment under this assumption?

  1. a Treasury strip with 15 years to maturity
  2. a bond with a 10% coupon and 5 years to maturity
  3. a bond with a 5% coupon and 10 years to maturity
  4. a zero-coupon corporate bond with 12 years to maturity

Answer(s): B

Explanation:

If Pete is expecting interest rates to increase, the bond with a 10% coupon and 5 years to maturity is the best investment. If interest rates increase, bond prices fall, so he will want to invest in the bond that will have the lowest percentage decrease in price. This will be the bond with the shortest duration, which is the bond described in Choice
B. It has the highest coupon and the fewest years to maturity.



Which of the following statements about non-qualified employer-sponsored retirement plans is false?

  1. An employer does not have to offer the plan to all employees over 21 years old.
  2. The earnings on the plan's contributions remain untaxed until they are withdrawn.
  3. The plan does not have to abide by ERISA's vesting requirements.
  4. The plan may be either funded or unfunded.

Answer(s): B

Explanation:

The false statement is that the earnings on the plan's contributions remain untaxed until they are withdrawn. Earnings on non-qualified employer-sponsored retirement plans do not grow tax-deferred except for a special situation in which a sizeable forfeiture risk exists. All the other statements are true since non-qualified employer-sponsored plans are exempt from most, if not all, of ERISA's requirements.



Connie Serve placed an order to purchase five, $1,000 Treasury bonds in the secondary market on Tuesday, October 12th.
Connie will be required to pay for this purchase on which day?

  1. Tuesday, October 12th.
  2. Wednesday, October 13th.
  3. Thursday, October 14th.
  4. Friday, October 15th.

Answer(s): B

Explanation:

Connie will be required to pay for this purchase on Wednesday, October 13th. The settlement date for Treasury securities and exchange-listed options is one business day after the trade date, or T + 1.



Page 33 of 83



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

asl commented on September 14, 2023
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myyadav commented on September 26, 2023
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asl commented on September 14, 2023
ALL ARE RELATABLE QUESTIONS
CANADA
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azmera abebe commented on August 25, 2023
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Anonymous
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Av dey commented on August 16, 2023
Can you please upload the dumps for 1z0-1096-23 for oracle
INDIA
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