PN Domain 6: Physiological Adaptation (Quiz 1) Welcome to your Series 6 Practice Exam 2 This test is designed to prepare you mentally for the actual Series 6 Exam with the same number of (50 questions) and the same time allowed (90 minutes) as the actual exam. The Series 6 Exam is breakdown into four (4) Parts. Here are the Four (4) Domains of the Series 6 Exam with the weightage and number of questions in this practice exam: 1. Seeks Business for the Broker Dealer from Customers and Potential Customers [12 Questions] - 24% 2. Opens Accounts after Obtaining and Evaluating Customers' Financial Profile and Investment Objectives [08 Questions] - 16% 3. Provides Customers with Information about Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records [25 Questions] - 50% 4. Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions [05 Questions] - 10% Please click NEXT to start your Free Series 6 PRACTICE EXAM right away. Best of Luck! 1. When an option is trading, all of the following are fixed except A) the premium. B) the underlying security. C) the expiration date. D) the strike price. None 2. Corporations issue commercial paper with maturities ranging from as little as one day to as long as how many days? A) 365 days B) 270 days C) 7 days D) 90 days None 3. A resident of a state who acquires stock pursuant to Rule 147 (intrastate offerings) is prohibited from selling the stock to a nonresident of that state for how many months? A) 18 B) 6 C) 9 D) 12 None 4. As a registered representative you know that red herring is another term for A) a preliminary prospectus. B) a final prospectus. C) a tombstone advertisement. D) a registration statement. None 5. Listed securities primarily trade in which of the following venues? A) Primary market B) Over-the-counter C) Third market D) Exchanges None 6. Which of the following funds would be most suitable for a customer with moderate experience and risk tolerance seeking a portfolio to provide current income? A) Small-cap stock mutual fund B) Global Equity stock fund C) Biotechnology fund D) Preferred stock mutual fund None 7. Each of the following is considered an investment company except A) unit investment trust. B) bank investment advisory account. C) face-amount certificate company. D) open-end management company. None 8. Under the 1940 Investment Company Act, an investment company may take all of the following forms except A) a closed-end investment company. B) a unit investment trust. C) an open-end investment company. D) a limited partnership with partners as passive investors. None 9. When may a Series 6 registered representative sell shares of a closed-end fund? A) Only when the shares are selling in the secondary market B) In both the primary and secondary markets C) Only when the shares are selling in the primary market D) Series 6 representatives may not sell shares of a closed-end fund None 10. A shareholder has $800 to invest in the ABC Technology Fund. If the shares are currently priced at $21.15 each, he can purchase how many shares? A) 37, with $17.45 in change B) None because the minimum trading unit is 100 shares C) 37.825 shares D) 38 shares None 11. During the accumulation period of a periodic payment deferred variable annuity, the number of accumulation units A) increases and the value per unit varies. B) remains fixed and the value per unit remains constant. C) increases and the value per unit remains constant. D) remains fixed and the value per unit varies. None 12. A 28-year-old investor wishes to start saving for his daughter's college education. Which of the following would be the least appropriate investment vehicle for this plan? A) Zero-coupon bond B) 529 plan C) Variable annuity D) Coverdell ESA None 13. Who assumes the investment risk in a variable annuity contract? A) The annuitant assumes the risk. B) The insurance company assumes the risk. C) There is no risk in a variable annuity. D) The investment risk is shared between the insurance company and the annuitant. None 14. In promoting a variable life insurance contract to a customer, which of the following statements would be permissible? A) This product is a good investment for anyone wishing to provide for retirement. B) Variable life insurance gets you a higher death benefit for less money. C) If you already have a variable annuity, you can exchange it for this type of insurance with no adverse tax consequences. D) This product gives you the possibility of a greater death benefit in exchange for accepting investment risk. None 15. Once a variable annuity has been annuitized, A) each annuity unit's value varies with time, but the number of annuity units is fixed. B) the number of annuity units is fixed, and their value remains fixed. C) each annuity unit's value is fixed, but the number of annuity units varies with time. D) each annuity unit's value and the number of annuity units vary with time. None 16. A customer who sold a bond at a loss must wait how long before he can buy back a substantially identical bond and not have the sale classified as a wash sale? A) 31 days B) No waiting period C) 5 days D) 20 days None 17. The Windmill Balanced Fund holds a mix of stocks and bonds. In the current year they received $500,000 in dividends from stocks and $600,000 in interest from bonds. Over the year they have had $100,000 in expenses. What is the fund's net investment income? A) $1 million B) $900,000 C) $1.1 million D) $2.1 million None 18. The Investment Company Act of 1940 requires that mutual funds pay dividends from their A) gross income. B) capital gains. C) net investment income. D) portfolio earnings. None 19. The cost basis of inherited shares are based upon which of the following? A) The decedent's cost basis B) The average of the value on the day of the decedent's death and the decedent's original cast basis C) The average of the value on the date of death and the date the inheritor sells the position D) The value of the stock on the day of the decedent's death None 20. SEC rules require that open-end management companies distribute dividends to their investors from the firm's A) portfolio earnings. B) net investment income. C) gross revenue. D) capital gains. None 21. Information received from a customer upon opening a new account must be confirmed with the customer when? A) Within 30 days of account opening B) No later than account opening C) Within 60 days of account opening D) Within 90 days of account opening None 22. A client and her spouse own shares in the ACE Fund as tenants in common. She has a 60% ownership interest in the account and her spouse has the balance. If the client dies, what happens to the shares in the account? A) Her spouse would automatically own all the shares. B) Fifty percent of the shares would belong to her spouse and the remaining half would be distributed to her estate. C) Ownership of the shares would be determined by probate court. D) Forty percent of the shares would belong to her spouse and the remaining balance would be distributed to her estate. None 23. Contribution limits for qualified plans A) are established by the government and adjusted periodically. B) are established by the employer and are adjusted periodically. C) are established by the employer and may not change after the plan is established. D) are not set; there are no such limits. None 24. Employee Retirement Income Security Act (ERISA) rules on participation require that employers include employees age 21 or older and with A) two years of service (4,000 hours). B) two years of service (3,000 hours). C) one year of service (2,000 hours). D) one year of service (1,000 hours). None 25. Under Regulation S-P, nonpublic personal information would not include a customer's A) Social Security number. B) information collected through an internet cookie. C) alma mater. D) account balance. None 26. When may a firm release nonpublic personal information to a nonaffiliated company? A) When the customer has an opportunity to opt out B) When the customer has chosen to opt out C) When proper disclosures are made only D) When proper disclosures are made to the customer and a customer has an opportunity to opt out None 27. Rowan and Rory have a joint tenants with rights of survivorship account with your firm. Unfortunately Rory has passed away. Rowan would like the funds to be in individual only. What paperwork will the firm need to accomplish the task? A) Rowan will need to open a new account and complete a letter of authorization to transfer the assets. B) Rowan will need to open a new account and request a journal transfer of the assets to the new account. C) The firm may not make any changes to the account until estate paperwork is completed. D) Rowan will need to provide a death certificate and a letter authorizing the removal of the decedent's name. None 28. Morgan and Mackenzie have a joint tenants with rights of survivorship account with your firm. Unfortunately Mackenzie passes away. Morgan would like the funds to be in his name only. What paperwork will the firm need to accomplish the task? A) The firm may not make any changes to the account until estate paperwork is completed. B) Morgan will need to provide a death certificate and a letter authorizing the removal of the decedent's name. C) Morgan will need to open a new account and request a journal transfer of the assets to the new account. D) Morgan will need to open a new account and complete a letter of authorization to transfer the assets. None 29. It is generally considered unsuitable to invest in securities using funds from which of the following? A) Earnings B) A defined contribution plan C) An inheritance D) Borrowing money against a home None 30. Industries that tend to be highly sensitive to inflation, deflation, and the ups and downs of business trends would best be described as A) defensive. B) growth. C) cyclical. D) Keynesian. None 31. An analysis of the existing portfolio is important when doing which of the following? A) Selecting new investments B) All of these C) Understanding a customer's circumstances D) Understanding a customer's tolerance for risk None 32. Which of the following explains that including noncorrelated assets in a portfolio can reduce certain risks? A) Alpha coefficient B) Beta coefficient C) Capital asset pricing model (CAPM) D) Modern portfolio theory (MPT) None 33. A representative that has reasonable grounds to believe that options are a suitable investment for a client should take which of these next steps? A) Approve the account for option trading B) Provide a suitable recommendation C) Provide the customer an option disclosure document D) Request approval for option trading for the account None 34. Which of the following activities are a registered representative's responsibilities? A) Offering tax advice and assisting customers in completing tax returns B) Determining the suitability of various investments for individual customers C) Investing for customers based on their circumstances and objectives D) Personally holding a customer's securities for a future transaction None 35. Selling which of the following is not a violation of the Conduct Rules? A) Government bonds to a client who insists on high returns B) AAA bonds to a client who has income as an objective C) Options to a client who desires long-term growth D) Selling the same mutual fund to all of your clients None 36. Your client, age 28, has just begun to consider investing outside of her employer's 401(k) plan. She's saved $25,000 to allocate toward some capital appreciation and some income. She prefers an investment with moderate risk and some downside protection if the stock market falls. With investing being new to her, she wants to note that she understands and is comfortable with moderate risk as stated, only. Given what has been conveyed, which of the following would be the most suitable? A) Specialized fund B) Equity index fund C) Equity income fund D) Balanced fund None 37. Your 45-year-old client is interested in obtaining the highest current income possible from his investment. If he is willing to accept fluctuations in investment principal, which of the following would best suit this client's investment objective? A) Balanced fund B) High-yield bond fund C) Aggressive growth fund D) Tax-free money market fund None 38. Your customer has $200 per month of discretionary income and currently invests $200 monthly into a mutual fund. His daughter plans to enter college soon, and he would like to send her $100 monthly. Which of the following actions should you recommend to him? A) Invest $200 monthly into the mutual fund and send all dividends to his daughter. B) Invest $200 monthly into the mutual fund and redeem shares when needed. C) Invest $100 monthly into the mutual fund and send his daughter $100 monthly. D) Begin a systematic withdrawal program of $100 monthly. None 39. Which of the following would not be considered institutional communications with the public? A) A communication with an individual designated to act on behalf of your institutional customer B) An internal memo promoting a new product that will be offered to your firm's institutional customers only C) A letter to another broker-dealer D) A letter to a municipality offering your firm's services as an underwriter None 40. Retail communications apply to all of the following except A) a billboard. B) a public appearance. C) an email sent to 30 existing customers. D) a website. None 41. All of the following would be subject to the Conduct Rules regarding public appearances except A) an internet chat room. B) a seminar discussing the products your firm has available for sale. C) a presentation at a high school about mutual funds. D) a radio spot saying that your offices have moved. None 42. If a registered representative wishes to place an advertisement in a local newspaper offering her services as a mutual fund representative for XYZ Funds, the advertisement must be approved by A) the SEC. B) FINRA. C) her branch office manager. D) a registered principal. None 43. If a member firm has a dispute with one of its registered representatives, which of the following is true? A) The representative's predispute arbitration agreement is renewed every January 1. B) The dispute must be resolved via mediation. C) The representative signed a predispute arbitration agreement upon completion of the U-4. D) The dispute will be resolved in a court of law. None 44. All of the following complaints have regulatory standing except A) an email sent to a firm's general inbox. B) a letter sent to a firm principal. C) a letter sent to a firm registered representative. D) a complaint delivered to a principal's voicemail. None 45. How often must a member firm provide a copy of the FINRA procedures to its customers? A) Annually B) Every three years C) Upon opening an account D) When the customer requests it None 46. FINRA issues a complaint against ALFA Securities, a FINRA member firm, charging that the firm failed to adequately supervise one of its employees involved in a private placement. Which body of rules governs how this complaint will be handled? A) Conduct Rules B) Uniform Practice Code C) Code of Arbitration Procedure D) Code of Procedure None 47. Which of the following persons would not need to be fingerprinted under regulatory requirements? A) Devon, Alex's supervisor B) Adrian, a file clerk handling new account paperwork C) Blair, a new accounts specialist that opens accounts and processes initial deposits D) Alex, a receptionist that processes incoming mail None 48. Which of the following is not information needed to complete a Form U4? A) Employment history B) Aliases C) Residential history D) Marital Status None 49. The registration of an associated person becomes effective after A) passing the appropriate exam. B) submission of Form U4. C) successful completion of an interview with the member firm. D) submission of Form U4 and passing the appropriate exam. None 50. Which of the following does not disqualify a person from associating with a member firm? A) The person has been or is expelled or suspended from membership or participation in any other self-regulatory organization. B) The person is under an SEC order denying, suspending, or revoking their registration. C) The person is under an order of a foreign financial regulator denying, suspending, or revoking their registration. D) The person was charged with felony fraud within the past 10 years. None 1 out of 50 Time is Up! Time's upTime is Up!
