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FINRA Series 6 Exam Questions
Investment Company and Variable Contracts Products Representative Examination (IR) (Page 7 )

Updated On: 18-Mar-2026
Page 7 of 66
PDF with 325 Questions

The investment banker bears the risk if the securities do not sell in a(n):

  1. firm commitment underwriting agreement.
  2. best efforts agreement.
  3. all-or-nothing commitment.
  4. None of the above selections are correct. The investment banking firm is never exposed to risk if the securities don't sell.

Answer(s): A

Explanation:

The investment banker bears the risk if the securities do not sell in a firm commitment underwriting agreement. In this type of agreement, the investment banker purchases the security from the issuing firm and is fully exposed to any risk associated with the issue.



Joe Cool is a member of the All Greek Fraternity. A few of the alumni of his fraternity sat for the FINRA Series 6 exam over the past couple of years and, using their cell phones, took pictures of the exam questions. They forwarded these to their fraternity to be included in the test bank file the fraternity keeps in its study room.
Have there been any violations of FINRA/NASD rules in this instance?

  1. No. It is standard practice for sororities and fraternities to compile test banks of old exams, and since the forwarded tests are not copies of an actual future exam that will be administered, there has been no violation of any rules.
  2. Yes. It is a violation of Rule 2110 for an exam-past or present-to be reproduced and distributed for study purposes.
  3. No. Rule 2110 only prohibits the reproduction and distribution of a previously administered FINRA exam for study purposes if the exams are being sold. As long as there is no compensation involved, a violation has not been committed.
  4. Both A and C are true statements.

Answer(s): B

Explanation:

Yes, there have been violations of FINRA/NASD rules in this instance. It is a violation of Rule 2110 for an exam-past or present-to be reproduced and distributed for study purposes. Whether there has been compensation paid or not is irrelevant.



After passing the Series 6 and becoming a registered representative, you will be able to execute transactions in which of the following securities?

I). corporate stocks
II). mutual funds
III). corporate bonds
IV). variable contracts

  1. I, II, III, and IV
  2. I, II, and IV only
  3. II and III only
  4. II and IV only

Answer(s): D

Explanation:

After passing the Series 6 and becoming a registered representative, you will be able to execute transactions in mutual funds and variable contracts only. A passing grade on the Series 6 qualifies you to be registered as a "limited representative."



Mr. Cross wanders into your office with a $35,000 check that he has received from his recently-deceased wife's insurance company and wants you to advise him how to invest it, since that is your job, as he puts it.
You ask him to fill out a standard investor profile questionnaire, but he refuses to do so. You offer to fill it out for him, based on his answers to your verbal questions, but he still refuses and calls you a "nibby-nose." Based on this, you can:

  1. allocate the $35,000 any way you choose since you have an uncooperative client.
  2. advise him to invest the money in a money market mutual fund instead of holding it as cash.
  3. advise him to invest the money in an S&P 500 Index fund.
  4. The advice provided in either Choice B or Choice C would be appropriate.

Answer(s): B

Explanation:

If you cannot get any personal information from a client, you cannot legitimately recommend (or execute) an asset allocation for him. You can advise him to invest the money in a money market mutual fund instead of holding it as cash since this will provide him with a small return on his money. You cannot advise him to invest the money in an S&P 500 Index fund, which would subject him to more risk. This would be considered an unsuitable recommendation and is in violation of securities' laws.



An order to buy or sell a stock at the prevailing market price is called a(n):

  1. open-ended order.
  2. market order.
  3. stop order.
  4. limit order.

Answer(s): B

Explanation:

An order to buy or sell a stock at the prevailing market price is called a market order. Stop orders and limit orders specify prices at which the order is triggered.



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