QUESTION: 141

A fund's 12b-1 fees may not be used to pay which of the following?

printing prospectuses
compensating brokers who sell shares of the fund
mailing sales literature to existing and prospective customers
administrative expenses of the fund's investment adviser

Answer(s): D

Explanation:

A fund's 12b-1 fees may not be used to pay the administrative expense of the fund's investment adviser. This would be part of the fund's management fees. SEC rule 12b-1 authorizes a fund to pay for distribution costs out of a fund's assets only if the fund has adopted a 12b-1 plan. The SEC defines these distribution costs to include the costs of marketing and selling the fund shares, including compensating brokers who help to sell the shares, and printing and mailing prospectuses and sales literature to existing and prospective customers.

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QUESTION: 142

What did the Howey Decision?

provided for fixed annuities to be excluded from the definition of a security.
defined an investment contract as any investment of money in a common enterprise with the expectation of earning a profit from the efforts of others.
stipulated that all general partnerships were investment contracts and, therefore, securities, as defined by the Securities Exchange Act of 1934.
determined that certificates of deposit issued by a bank and insured by the FDIC did not qualify as securities, as defined by the Securities Exchange Act of 1934.

Answer(s): B

Explanation:

The Howey Decision defined an investment contract as any investment of money in a common enterprise with the expectation of earning a profit from the efforts of others. General partnerships do not fall under the definition of investment contracts since the general partners are actively involved in the business operations. Although both fixed annuities and bank CDs are excluded from the definition of a security, this was not part of the Howey Decision.

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QUESTION: 143

A discretionary account authorization permits a registered representative to decide:

whether to make a purchase or a sale.
what specific asset to purchase or sell.
how much of an asset to buy or sell for the account.
all of the above.

Answer(s): D

Explanation:

A discretionary account authorization permits a registered representative to decide on all three issues-whether to make a purchase or a sale; what specific asset should be purchased or sold; and how much of that asset to buy or sell.

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QUESTION: 144

Total Investments, a family of mutual funds, has prepared some new PowerPoint slides that it will use at a free financial planning seminar it offers to the general public. The new slides:

I). must be signed and dated by a registered principal of Total Investments.
II). must be filed with FINRA 10 business days prior to their first use.
III). must be kept in a separate file by Total for three years after the date of their first use.

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

Answer(s): C

Explanation:

Only Selections I and III are correct. The PowerPoint slides that are being used at a financial planning seminar fall under the definition of sales literature and, as such, must be signed and dated by a registered principal of Total Investments and must be maintained in a separate file by Total for three years after the date of their first use. Sales literature must also be filed with FINRA within 10 business days of first use, but not prior to the first use, unless it concerns bond volatility ratings.

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Free Series 6 Exam Braindumps (page: 36)

QUESTION: 141

Explanation:

QUESTION: 142

Explanation:

QUESTION: 143

Explanation:

QUESTION: 144

Explanation: