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 3 )

Updated On: 26-Jan-2026
Page 3 of 66
PDF with 325 Questions

When a client purchases a variable contract through you, he should be informed that his money will be invested:

  1. at the most recent price for which the contract sold.
  2. at the next price that is computed after the contract application is accepted by the insurance company.
  3. at the previous day's close price for the contract.
  4. in a product with a guaranteed cash value.

Answer(s): B

Explanation:

When a client purchases a variable contract, he should be informed that his money will be invested at the next price that is computed after the contract application is accepted by the insurance company. It is the responsibility of the member firm to transmit both the contract application and the payment to the insurance company promptly. Variable life insurance policies do not have guaranteed cash values. The cash value fluctuates with the performance of the underlying portfolio in which the insurance company invests the money.



Under the rules of ERISA, all private-employer sponsored retirement plans must:

  1. allow any employee to participate in the retirement plan as long as the employee is at least 21 years old.
  2. exclude anyone who has not been employed with the firm for at least five years.
  3. provide a specific vesting schedule under which all participants in the plan will become 100% vested after having been in the firm's employ for seven or fewer years.
  4. be defined contribution plans.

Answer(s): C

Explanation:

Under the rules of ERISA, all private-employer sponsored retirement plans must provide a specific vesting schedule under which all participants in the plan will become 100% vested after having been in the firm's employ for seven or fewer years. The firm may require that an employee have at least two years of service prior to participating in the plan, even if the employee is 21 years old, but this service requirement may not exceed two years. There is no requirement that the plan be a defined contribution plan.



The Securities Exchange Commission consists of:

  1. 6 members, elected by member firms.
  2. 5 members, appointed by the President of the U.S., with Senate approval
  3. 7 members, appointed by FINRA.
  4. 5 members, appointed by the Secretary of Treasury of the U.S.

Answer(s): B

Explanation:

The Securities Exchange Commission consists of 5 members, appointed by the President of the U.S., with Senate approval.



Tex Payor is an investor in the Invest4U Mutual Fund. The manager of the fund, fearing a substantial decline in the stock market, sold a lot of the fund's holdings to lock in profits. As a result, the fund earned a lot of long-term capital gain income.
Which of the following statements is true regarding the tax treatment of this income?

  1. Tex must pay taxes on that portion of the long-term capital gain income that Invest4U distributes to him.
  2. Tex must pay taxes on his proportionate share of the long-term capital gain income earned by Invest4U, whether distributed or not.
  3. Tex must pay taxes only on dividend income distributed by Invest4U.The mutual fund itself pays tax on any capital gains it earns.
  4. None of the above is a true statement.

Answer(s): A

Explanation:

Tex must pay taxes on that portion of the long-term capital gain income that Invest4U distributes to him. Invest4U is required to distribute at least 98% of its capital gain income to its shareholders.



The Securities Act of 1933 did what?

  1. It established the requirement that investment advisers be registered with the SEC.
  2. It established the SEC as the regulatory agency for the secondary market.
  3. It established the requirement that new securities be registered.
  4. All of the above are correct answers.

Answer(s): C

Explanation:

The Securities Act of 1933 established the requirement that new securities be registered. The focus of the Securities Act of 1933 was on the primary market. This act also requires that a prospectus be supplied to all prospective investors. The Securities Exchange Act of 1934 established the SEC as the regulatory agency of the secondary market, and the Investment Advisers Act of 1940 established the registration requirement for investment advisers.



Viewing page 3 of 66
Viewing questions 11 - 15 out of 325 questions



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

Join the Series 6 Discussion