Cisco
CompTIA
ISC
EC-Council
EXIN
Fortinet
ITIL
Juniper
Microsoft
VMware
Avaya
SAP
Google
NVIDIA
Salesforce
Amazon
Palo Alto Networks
ISC2
Splunk
ServiceNow
All Vendors
  2. Home
  3. Exams
  4. FINRA
  5. Series 6

FINRA Series 6 Exam
Investment Company and Variable Contracts Products Representative Examination (IR) (Page 22 )

Updated On: 26-Jan-2026
Page 13 of 66
PDF with 325 Questions

Mr. Shortfall placed a market order to buy 100 shares of Google (GOOG) with GetErDone Broker-Dealers. The market order was executed at $530 a share. In accordance with Regulation T:

  1. Mr. Shortfall must pay for the purchased shares within 3 business days.
  2. Mr. Shortfall must pay for the purchased shares within 5 business days.
  3. GetErDone can request an extension from FINRA or another SRO for Mr. Shortfall if he is unable to pay for the shares within 5 business days.
  4. Both B and C are true statements.

Answer(s): D

Explanation:

After his market order to buy shares of GOOG is executed, Mr. Shortfall must pay for the shares within 5 business days. If he is unable to do so within this time period, GetErDone can request an extension from FINRA or another SRO for him.



GoForBroke Broker-Dealers has distributed a list of ten mutual funds that it suggests are top-notch funds worthy of recommendation by GoForBroke's agents. Coincidentally, all the funds on this list also happen to be those that execute the majority of their trades through GoForBroke.
Is GoForBroke in violation of any FINRA rules?

  1. No. GoForBroke only distributed a list of fund names; it did not offer its agents any form of additional compensation for selling the funds on that list.
  2. No. As long as the list consists of more than five funds, GoForBroke has not violated any FINRA rules.
  3. Yes. By distributing a list naming specific funds that coincidentally all happen to execute a lot of trades through GoForBroke, the broker-dealer is violating FINRA's anti-reciprocal rule.
  4. Yes. GoForBroke is prohibited from selling shares of mutual funds that execute their trades through the broker-dealer. This rule is in place to avoid conflicts of interest.

Answer(s): C

Explanation:

Yes. By distributing a list naming specific funds that coincidentally all happen to execute a lot of trades through GoForBroke, the broker-dealer is violating FINRA's anti-reciprocal rule. Even though GoForBroke does not appear to be offering its agents any additional compensation for selling shares of these funds, it is promoting them above other funds that aren't conducting as many trades through the broker-dealer. Recommendations should be based on a specific client's needs, not on the money the fund generates for the broker-dealer. There is no rule that prohibits a broker-dealer from selling shares of mutual funds that execute their trades through them.



Which of the following is not an advantage that an exchange traded fund (ETF) has over a traditional mutual fund?

  1. There are no fees (i.e., loads, commissions) associated with buying and selling ETFs.
  2. ETFs trade continuously throughout the day.
  3. Investors can use limit and stop orders when trading ETFs.
  4. All of the above are advantages that an ETF has over a traditional mutual fund.

Answer(s): A

Explanation:

The choice that does not represent an advantage that an ETF has over a traditional mutual fund is Choice A. While ETFs have no load charges, investors do pay commissions when buying or selling these funds. ETFs do offer the advantage of continuous trading, and investors can use limit and stop orders when trading ETFs, options that are not available when trading mutual funds.



MBIA, Inc., a municipal bond insuring company, has a bond issue that is selling for $80.05 to yield 9.5%. The bond has a coupon rate of 7%, with semiannual payments, and matures in 2025.If interest rates in the economy increase, which of the following statements will be true, all else equal?

I). the nominal yield of the bond will increase.
II). the yield-to-maturity of the bond will increase.
III). the current yield of the bond will increase.

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

Answer(s): C

Explanation:

Only statements II and III are true. If interest rates in the economy increase, both the bond's yield-to-maturity and its current yield will increase. The bond's yield-to-maturity will increase to reflect current market rates on similar risk investments, and this, in turn, causes the price of the bond to fall. The current yield of the bond is the interest payment divided by the bond price. Since the interest payment does not change with interest, the current yield will increase with the decrease in the bond price. The nominal yield of the bond is the same as its coupon rate, or what it yields when it sells at its par value, and does not change with changes in interest rates in the economy.



Ari Gaunt was affiliated with Savvy Investments and was terminated after some of the female representatives associated with Savvy filed sexual harassment complaints against him. Mr. Gaunt believes that he is still due money for some transactions he executed prior to his termination; Savvy believes otherwise. Under FINRA's Code of Arbitration:

  1. Ari may either sue Savvy in a civil court of law or submit his claim to arbitration. If Ari submits his claim for arbitration and is unhappy with the panel's decision, he can then sue Savvy in a civil court of law.
  2. Ari has six years to submit his claim to arbitration.
  3. both B and C are true statements.

Answer(s): C

Explanation:

If Mr. Gaunt believes he is still due money from Savvy, and Savvy disagrees, Ari has six years to submit his claim to arbitration under FINRA's Code of Arbitration. Ari cannot sue Savvy in a court of law, and the decision of the arbitration panel is final.



Viewing page 22 of 66
Viewing questions 106 - 110 out of 325 questions



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

Join the Series 6 Discussion