Series-6 Exam Questions & Answers
Investment Company and Variable Contracts Products Representative • Finra
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Sample Series-6 Questions
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The stock of Southwest Airlines (LUV) is selling for $11.77 in mid-September. An October put on the stock is selling for $1.45 and gives the owner the right to sell the stock for $13.00 prior to its expiration. In this example, the option premium is:
The option premium is $1.45, the cost of the option.
A bond has a face value of $1,000, matures in 12 years, and pays an 4% coupon, with interest paid semiannually. If the bond is priced to yield 3.5%, it is selling:
If the bond is priced to yield 3.5%, it will be selling at a premium. The coupon rate of 4% is also the bond's nominal rate, which is what the bond would be yielding if it were selling at its par value. If it is yielding less than this, it means that the bond is selling for more than its par value, which is the same as its maturity value. A bond that sells for more than its par value is said to be selling at a premium.
Ms. Scatty is a registered representative with a well-known family of mutual funds. When selling one of the funds, she forgets to give her buyer a prospectus.
Which of the following statements is true?
If Ms. Scatty forgets to give her buyer a prospectus when selling one of the funds, she can be held civilly liable under the Securities Act of 1933. Unless there was an intent to defraud, she is not subject to criminal penalties. The purchase and sale of mutual fund shares fall under the Securities Act of 1933.
The compensation records that FINRA member firms are required to maintain must include which of the following?
i. the names of the persons that have provided the compensation
ii. names of the associated persons receiving the compensation
iii. the amount of cash received
IV. the nature and value (if known) of any non-cash compensation received
The compensation records that FINRA member firms are required to maintain must include the names of the persons that have provided the compensation (the offerors), the names of the associated persons receiving the compensation, the amount of cash received, and the nature and value (if know) of any non-cash compensation received.
Private placements may be sold to whom?
Private placements may be sold to as many as 35 non-accredited investors. Non-accredited investors must have a purchaser representative to help them evaluate the investment. There is no restriction on the number of accredited investors to whom the securities can be sold. Accredited investors include wealthier, more sophisticated individual investors as well as institutional investors.
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