FINRA Series 6 Exam Study Questions with Correct Answers

What factors determine the number of annuity units an investor will receive after annuitizing a variable annuity? 1) The payout option 2) Assumed interest rate (AIR) 3) The annuitant's age 4) The annuitant's gender Who must sign a new account form? The two signatures required on a new account form are from the registered representative and the principal. What is the purpose of the form U-4? The purpose of the form U-4 is to register a registered representative with a member firm. Businesses that do better in bad economic conditions are _________. Counter-cyclical Registered representatives are prohibited from receiving "off the book" compensation from a wholesaler. T or F True What is the red herring? A preliminary prospectus that includes material information about an offering and contains an estimate of the range within which the final offering price is to be set. What is maximum contribution per year into an IRA? What is the penalty for any excess contribution? Maximum contribution = $5000 Penalty = 6% of excess amount and earnings on this amount are not tax-deferred What are the characteristics of a contractual plan? 1) Required periodic investments 2) Automatic reinvestment of distributions 3) Protection for plan completion What is the penalty for an early withdrawal from an IRA? What is the age requirement for withdrawal? Penalty = 10% on the taxable portion of the withdrawal, and is also reported an taxed as income that year. Age = 59 1/2 What exceptions would waive the penalty of an early withdrawal from IRA? The IRA holder: -Dies -Becomes disabled