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FINRA Series 6 Exam
Investment Company and Variable Contracts Products Representative Examination (IR) (Page 2 )

Updated On: 26-Jan-2026
Page 2 of 66
PDF with 325 Questions

Lana is registered as a limited representative and is employed by Everything Investments. Her duties include selling mutual funds and variable contracts products to the firm's clients. She has been particularly successful in selling variable contracts offered by OneLife insurance company. As a "thank you" for her hard work, OneLife has offered her a ticket to an upcoming play at a local dinner theatre.
Given this scenario, which of the following statements applies?

  1. Lana will have to pass on the offer. Lana is prohibited from receiving compensation from anyone other than Everything Investments.
  2. Lana can accept the offer as long as Everything agrees to it and as long as it is not an ongoing thing and/or preconditioned on her achieving a specified sales target.
  3. Lana can accept the offer without Everything's approval in this instance since the offer does not involve cash.
  4. Lana will have to pass on the offer. She is permitted to receive only cash compensation in an amount not to exceed $100 from an entity other than Everything, and then only with Everything's approval.

Answer(s): B

Explanation:

Lana can accept the dinner theatre ticket offer as long as Everything agrees to it and as long as it is not an ongoing thing and/or preconditioned on her achieving a specified sales target. Occasional meals, tickets to the theatre, a sporting event, or a similar entertainment venue may be accepted as long as they aren't too excessive or too frequent and as long as the member firm with whom the representative is employed is agreeable.



On Friday, August 6th, the Board of Directors of Ecolab (ECI) announced that it would pay a dividend of $0.155 a share to shareholders of record as of Tuesday, September 21st.The dividend checks were scheduled to be mailed on Friday, October 15th. In this scenario, the ex-dividend date is:

  1. Friday, August 6th.
  2. Friday, September 17th.
  3. Tuesday, September 21st.
  4. none of the above.

Answer(s): B

Explanation:

The ex-dividend date is Friday, September 17th in this scenario. It is two business days prior to the date of record, which is Tuesday, September 21st in this example. Saturday is not considered a business day, so the ex-dividend date is the preceding Friday.



By investing in a diversified portfolio, an investor will:

  1. lower both his risk and his expected return.
  2. lower his risk without affecting his expected return.
  3. lower his risk and increase his expected return.
  4. eliminate all the market risk associated with his investment portfolio.

Answer(s): B

Explanation:

By investing in a diversified portfolio, an investor will lower his risk without affecting his expected return. In diversifying, he selects securities whose returns do not move together. This does not affect the expected returns of the individual securities and, by extension, his portfolio of securities. When he does so, he is diversifying away the unsystematic (non- market) risk associated with the individual securities. Market risk is the risk that all firms face to one degree or another and cannot be diversified away.



Which of the following is not a characteristic of all auction stock exchanges in the U.S.?

  1. There is a central marketplace.
  2. Stocks that are traded on the exchange must meet certain listing requirements, determined by the exchange.
  3. In order to conduct a trade on the exchange, a broker must be a member of the exchange or hold a license to trade on the exchange.
  4. If a stock is listed on one of these exchanges, it is not permitted to be listed on any other exchange.

Answer(s): D

Explanation:

The statement that does not describe a characteristic of all U.S. auction stock exchanges is
D. Dual listing is permitted. Stocks listed on one exchange may also be listed on another. In fact, most of the trading on U.S. regional exchanges is in dual-listed stocks. All of the auction exchanges do have a central marketplace, listed stocks must meet listing requirements, and brokers wishing to conduct trades on the exchange must be members of the exchange or hold a license to trade on the exchange.



An exchange-traded fund (ETF):

  1. can be structured as either a mutual fund or a unit investment trust.
  2. is a type of closed-end investment company.
  3. is bought and sold at the net asset value of the fund.
  4. charges no management fees.

Answer(s): A

Explanation:

An exchange-traded fund (ETF) can be structured as either a mutual fund or a unit investment trust, which means it is not a type of closed-end company. Shares are bought and sold on exchange floors, just as shares of a closed-end company are, however. Therefore, the price of an ETF is set by supply and demand, so an ETF can not necessarily be bought and sold at its net asset value. Like their cousins, ETFs charge management fees.



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