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FINRA Series6 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records | 50% | - Recordkeeping and disclosure requirements - Product features, risks, costs, and tax considerations - Investment company products: mutual funds, UITs, closed-end funds - Variable contracts: variable annuities, variable life insurance - Suitability rules and recommendations - Retirement plans and 529 savings plans |
| Seeks Business for the Broker-dealer from Customers and Potential Customers | 24% | - Advertising and sales literature regulations - Telemarketing and solicitation rules - Prospecting and identifying customer needs - Communications with the public and regulatory rules |
| Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions | 10% | - Order entry and processing procedures - Error resolution and correction procedures - Trade confirmations and account statements - Payment and settlement processes |
| Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives | 16% | - Customer identification and verification - Financial profile and investment objectives assessment - Account types and registration - Anti-money laundering (AML) and compliance |
FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. Which of the following is not required to be included in a management company's prospectus?
A) the various fees charged by the company
B) the potential risks to which the company's investors are exposed
C) a statement of the investment objective of the company
D) the financial statements of the company
2. Liz is a new client of yours. She is 36 years old, single, and has been working and earning a nice salary
since her graduation from high school. She has been contributing the maximum allowed to a TSA plan
through her employer, and you have no reason to doubt that she will meet her stated goal to retire when
she is 58.She also has a good health care plan through her employer and is in excellent health. She has
been depositing her non-retirement savings in a money market fund and is not pleased at the pathetic
return she has been earning on her current balance of $140,000. Liz has been reading some articles on
the web and understands she could allocate her funds to receive a higher return. She's willing to take on a
moderate level of risk, but needs your help. She informs you that she does plan to use $40,000 of her
current savings as a down payment for a condo and that her investment goals are to have money
available for travel and for unexpected expenses and periodic purchases such as new cars and new
furniture as the needs arise. She pays taxes at the highest marginal tax rate for individual tax payers.
Based on these facts, which of the following asset allocations would best meet her needs?
I. Money market fund: 30%; investment-grade corporate bonds: 20%; blue-chip stocks: 20%; high-yield
bonds: 10%; small cap stocks: 10%; foreign stocks: 10%
II. Money market fund: 10%; investment-grade municipal bonds: 5%; blue-chip stocks: 25%; high-yield
bonds: 25%; small cap stocks: 10%; foreign stocks: 25%
III. Money market fund: 10%; investment-grade municipal bonds: 25%; growth stocks: 40%; small cap
stocks: 15%; foreign stocks: 10%
A) I
B) Either II or III would be suitable recommendations.
C) II
D) III
3. A general decrease in price levels in the economy is referred to as:
A) recession.
B) stagflation.
C) deflation.
D) disinflation.
4. A person's discretionary income is:
A) the income that he has left to spend or save after having paid taxes on the income and for all of the
necessities, e.g., housing, food, clothing, transportation, utilities, etc.
B) the amount that can be allocated to speculative investments.
C) his income after tax.
D) the amount of his income that is needed to pay his regular monthly bills, e.g., rent, food, gasoline,
utilities, health insurance, etc.
5. Which of the following statements regarding the required distribution of income by a regulated investment
company are true?
A) Both A and B are true statements.
B) Both short-term and long-term capital gains earned by the company can be distributed only once a
year.
C) If an investor in the investment company has elected to reinvest his dividend and capital income in the
company rather than receiving a check, then the investor is not required to pay taxes on the reinvested
funds.
D) Under current tax laws, qualifying dividends distributed to the company's investors are taxable to those
investors at a preferential rate-i.e., either 0% or 15%, depending on the investor's marginal tax rate.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: D |



