Anna Vestor placed an order to sell 100 shares of Microsoft through the on-line site of her broker, GetErDone Broker-Dealers. GetErDone sold her shares for $24.59 a share and charged her a commission of $8.95. Among other things, the trade confirmation that Anna receives must stipulate:I). the time and date of the transaction.II). that GetErDone served as a principal in the transaction.III). the number of shares sold and the price at which they were sold.IV). the exchange or ECN on which the transaction was executed.
Answer(s): A
Among other things, the trade confirmation that Anna receives must stipulate the items described in Selections I and III only. The trade confirmation that Anna receives from GetErDone must stipulate the time and date of the transaction, the number of shares sold, and the price at which they were sold. The exchange or ECN on which the transaction was executed is not provided on the confirmation statement. Whether GetErDone acted as a principal or a broker in the transaction does need to be stipulated, but in this instance GetErDone acted as a broker, not a principal. GetErDone did not itself buy the shares from Anna.
Which of the following is not one of the rules stipulated by the Securities Exchange Act of 1934?
Answer(s): C
The rule prohibiting investment companies from using any sales literature that contains an omission of a material fact is not one of the rules stipulated by the Securities Exchange Act of 1934. This involves the market for new securities and, as such, is a rule stipulated by the Securities Act of 1933. The 1934 Act deals with the secondary market.
Marge is 57 and wants to retire early. Since she is not yet eligible for social security, she wants to begin tapping a variable annuity to which she has been contributing for the last 20 years.Which of the following statements regarding her withdrawals is true?
Answer(s): D
Since Marge is only 57, she can begin her withdrawals without penalty under IRS rule 72(t) as long as she does so following the specific guidelines for a period of 5 years, but the withdrawals will be subject to taxation. Once she starts the program outlined in rule 72(t), she must remain on it for at least five years or until she turns 59 ½, whichever comes last. This means that although she's already 57 and will be turning 59 ½ in 2 ½ years, she will have to continue to follow the guidelines for a full five years, or until she turns 62, in this case.
Which of the following is a characteristic of a mutual fund?
Answer(s): B
Mutual fund shares are bought and sold through the fund itself. The shares will sell for at least net asset value, unlike shares of a closed-end investment company wherein prices are set by supply and demand forces. Mutual funds are open-end investment companies and have no fixed number of shares.
Under current tax laws, which of the following distributions received from a mutual fund qualify for preferential tax treatment?I). short-term capital gainsII). long-term capital gainsIII). qualifying dividendsIV). non-qualifying dividends
Only Selections II and III-long-term capital gains and qualifying dividends-qualify for preferential tax treatment under current tax laws. Both are taxed at either 0% or 15%,depending on the investor's marginal tax rate. Short-term capital gains and non-qualifying dividend distributions are taxed as ordinary income at the investor's marginal tax rate.
Post your Comments and Discuss FINRA Series 6 exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the Series 6 content, but please register or login to continue.