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Securities Series 6

  1. 1.) Describe Trading In Mutual Fund Shares (Switching):
    Moving a client's securities account from one Mutual Fund family to another so therepresentative can benefit from additional commissions
  2. 2.) The 3 types of Investment Companies are?
    1.) Unit Investment Trusts2.) Open End and Closed End Management Companies3.) Face Amount Certificates
  3. 3.) Which type of Investment Company issues Redeemable Securities?
    Open End Management Companies (Mutual Funds)
  4. 4.) One of the greatest advantages of investing in Mutual Funds is?
    Professional management
  5. 5.) The Board of Directors of a Mutual Fund must be structured so that:
    1.) 40% must be unaffiliated and2.) 60% can be affiliated
  6. 6.) Functions of the Transfer Agent include:
    1.) Issuance of the shares2.) Cancellation of redeemed shares3.) Disbursement of the dividends and capital gains to the shareholders
  7. 7.) Functions of the Custodian include:
    1.) Safeguard the physical assets of the fund2.) Perform payable and receivable functions of securities transactions3.) Register the receipt of interest and dividends for the fund
  8. 8.) Define Dollar Cost Averaging (DCA):
    Voluntary investment plan where the investor systematically invests at fixedintervals (Monthly, Quarterly)
  9. 9.) What are the 3 things about Exchange Privilege within family of funds you need to know?
    1.) No additional sales charge will be accessed2.) The IRS considers every exchange as a sale3.) You will not be taxed until you move more money out than you put in (FIFO)
  10. 10.) The allowable 12b-1 expenses are:
    1.) Printing of sales literature2.) Distribution of sales literature3.) Advertising4.) Commissions
  11. 11.) Define the Forward Pricing Rule:
    Buy and Sell orders are based on the next calculated NAV.Remember that the NAV is calculated once every business day at the close ofbusiness of the NYSE
  12. 12.) What is the maximum sales charge for a Mutual Fund?
    8.5%
  13. 13.) What is the maximum sales charge for a Variable Annuity?
    8.5%
  14. 14.) What is the maximum sales charge for a Variable Life Policy?
    9%
  15. 15.) Who is excluded from the definition of a Breakpoint?
    1.) Investment Clubs2.) Investment Co-ops
  16. 16.) A Letter Of Intent (LOI) is good for:
    13 months
  17. 17.) An LOI can be backdated for:
    90 days
  18. 18.) Define Rights Of Accumulation (ROA):
    Investors have the right to receive cumulative quantity discounts when purchasingshares. Investors are also permitted to combine assets from their accounts and thoseof their immediate family to qualify for discounts. Remember Appreciation of theshares count for ROA.
  19. 19.) The Investment Company Act Of 1940 (ICA) requires that Mutual Funds pay redemptionproceeds within:
    Seven (7) calendar daysRemember Christmas is a calendar day!
  20. 20.) What are some common characteristics of Fixed/Variable Annuities?
    1.) Guaranteed payments for life2.) Tax deferred earning3.) Lose of principal upon annuitization4.) Gains are taxed at the annuitant's ordinary income tax rate
  21. 21.) The money invested in a Variable Annuity is held in which Insurance company account?
    The separate account
  22. 22.) What is the only way to fund an Immediate Annuity?
    Single Lump Sum
  23. 23.) If the annuitant dies while in the accumulation period, what will the beneficiary receive?
    • This is called the death benefit provision the beneficiary will receive the larger amountof money between:
    • 1.) The amount of contributions made by the Annuitant and
    • 2.) The value of the account the day the Annuitant died
Author
ballistic
ID
169439
Card Set
Securities Series 6
Description
Securities Series 6 Exam
Updated

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