Page 1 of 44
Series 6 - STC Final Exam 2 Questions with 100%
Correct Answers 2026
Cash trades (trades done for cash), as compared to trades done
in a cash account, have a delivery date on the: - ANSWER Same
day as the trade date
Cash trades, or trades made for cash, have a delivery date on
the same day as the trade date. Be sure to distinguish a cash
trade from a trade done in a cash account which generally
settles regular way.
An RR receives a letter from a client complaining about the
performance of a mutual fund that the RR's firm has
recommended. The RR should:
A) Send a copy to the mutual fund, since it is really a complaint
about the fund
B) Return the letter to the customer with the statement that the
customer must provide written evidence to support the
grievance
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C) Forward the complaint to a supervisor, who must place a
copy in the complaint file
D) Attempt to satisfy the customer before taking any other
action - ANSWER C) Forward the complaint to a supervisor, who
must place a copy in the complaint file
FINRA rules require customer complaints to be given to a
principal. The firm is then required to keep a copy in a
complaint file.
A variable annuity contract holder dies during the accumulation
period. Which of the following is TRUE regarding the tax
consequences?
A) All proceeds are considered a return of capital
B) The growth is taxable as a capital gain to the beneficiary
C) Proceeds in excess of cost are taxable as ordinary income to
the beneficiary
D) The growth above cost is not taxable if the beneficiary rolls
them over into an IRA - ANSWER C) Proceeds in excess of cost
are taxable as ordinary income to the beneficiary
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When a variable annuity contract holder dies during the
accumulation period, the proceeds in excess of cost are taxable
to the beneficiary as ordinary income.
Your client owns a portfolio of blue-chip equity securities and
would like to reduce his risk of a market downfall through the
use of options. The most effective way to achieve this objective
is to:
A) Write covered calls
B) Buy calls
C) Write covered puts
D) Buy puts - ANSWER D) Buy puts
The most effective way for the investor to achieve this objective
is to buy puts. The buyer of a put pays a premium representing
the price of the option. In exchange for the premium, the buyer
has the right to sell stock at a preset price. This would give him
protection against a downturn in the market.
Which of the following statements best defines the term
duration?
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A) It is a measure of a fixed-income security's relative interest-
rate risk.
B)It is a measure of a fixed income portfolio's average yield.
C) It is the period before a fixed-income security will be called.
D) It is the measure of volatility that compares an equity
security to the S&P 500 Index. - ANSWER A) It is a measure of a
fixed-income security's relative interest-rate risk.
Duration measures price sensitivity for fixed-income securities
given changes in interest rates. For example, a bond with a 7-
year duration would experience a 7 percent change in price for
every one percent change in market interest rates.
A hurricane hit the hub of the U.S. financial system and caused
a significant disruption in the stock market. This is an example
of: - ANSWER Event risk
Event risk is the risk that a large event will cause a significant
decline in the market value of securities. Event risk is a form of
systematic (undiversifiable) risk. Each of the other choices are
forms of unsystematic (diversifiable) risk.
Series 6 - STC Final Exam 2 Questions with 100%
Correct Answers 2026
Cash trades (trades done for cash), as compared to trades done
in a cash account, have a delivery date on the: - ANSWER Same
day as the trade date
Cash trades, or trades made for cash, have a delivery date on
the same day as the trade date. Be sure to distinguish a cash
trade from a trade done in a cash account which generally
settles regular way.
An RR receives a letter from a client complaining about the
performance of a mutual fund that the RR's firm has
recommended. The RR should:
A) Send a copy to the mutual fund, since it is really a complaint
about the fund
B) Return the letter to the customer with the statement that the
customer must provide written evidence to support the
grievance
,Page 2 of 44
C) Forward the complaint to a supervisor, who must place a
copy in the complaint file
D) Attempt to satisfy the customer before taking any other
action - ANSWER C) Forward the complaint to a supervisor, who
must place a copy in the complaint file
FINRA rules require customer complaints to be given to a
principal. The firm is then required to keep a copy in a
complaint file.
A variable annuity contract holder dies during the accumulation
period. Which of the following is TRUE regarding the tax
consequences?
A) All proceeds are considered a return of capital
B) The growth is taxable as a capital gain to the beneficiary
C) Proceeds in excess of cost are taxable as ordinary income to
the beneficiary
D) The growth above cost is not taxable if the beneficiary rolls
them over into an IRA - ANSWER C) Proceeds in excess of cost
are taxable as ordinary income to the beneficiary
,Page 3 of 44
When a variable annuity contract holder dies during the
accumulation period, the proceeds in excess of cost are taxable
to the beneficiary as ordinary income.
Your client owns a portfolio of blue-chip equity securities and
would like to reduce his risk of a market downfall through the
use of options. The most effective way to achieve this objective
is to:
A) Write covered calls
B) Buy calls
C) Write covered puts
D) Buy puts - ANSWER D) Buy puts
The most effective way for the investor to achieve this objective
is to buy puts. The buyer of a put pays a premium representing
the price of the option. In exchange for the premium, the buyer
has the right to sell stock at a preset price. This would give him
protection against a downturn in the market.
Which of the following statements best defines the term
duration?
, Page 4 of 44
A) It is a measure of a fixed-income security's relative interest-
rate risk.
B)It is a measure of a fixed income portfolio's average yield.
C) It is the period before a fixed-income security will be called.
D) It is the measure of volatility that compares an equity
security to the S&P 500 Index. - ANSWER A) It is a measure of a
fixed-income security's relative interest-rate risk.
Duration measures price sensitivity for fixed-income securities
given changes in interest rates. For example, a bond with a 7-
year duration would experience a 7 percent change in price for
every one percent change in market interest rates.
A hurricane hit the hub of the U.S. financial system and caused
a significant disruption in the stock market. This is an example
of: - ANSWER Event risk
Event risk is the risk that a large event will cause a significant
decline in the market value of securities. Event risk is a form of
systematic (undiversifiable) risk. Each of the other choices are
forms of unsystematic (diversifiable) risk.
