Comprehensive Series 6 Exam Prep 2025
– STC Greenlight Version with Verified
Answers for Top Score Assurance
Introduction
This document provides a focused preparation resource for the Series 6 exam,
emphasizing key concepts in investment company products and variable contracts. It
includes over 200 multiple-choice questions with verified answers, designed for efficient
review. Questions are numbered sequentially for easy tracking. Each question is followed
by the correct answer and a brief rationale to reinforce understanding. Content draws from
standard exam outlines, prioritizing clarity and relevance without excess details.
Total Questions: 210
Structure: Questions 1-100 cover foundational topics; Questions 101-210 expand on
advanced applications and scenarios.
Section 1: Investment Company Products (Questions 1-
100)
1. What is the primary purpose of a mutual fund?
A) To provide fixed income only
B) To pool investor money for diversified investments
C) To guarantee principal protection
,D) To offer unlimited trading flexibility
Answer: B
Rationale: Mutual funds collect capital from multiple investors to buy a diversified portfolio
of securities.
2. Which feature distinguishes open-end mutual funds from closed-end funds?
A) Fixed number of shares
B) Continuous issuance and redemption of shares
C) Higher minimum investment requirements
D) Exclusive focus on bonds
Answer: B
Rationale: Open-end funds allow shares to be created or redeemed daily based on NAV.
3. What does NAV stand for in mutual funds?
A) Net Asset Value
B) Nominal Annual Yield
C) New Account Value
D) Net Allocation Value
Answer: A
Rationale: NAV is the per-share value of the fund's assets minus liabilities.
4. A load fund charges a fee at the time of purchase. What is this called?
A) Back-end load
B) Front-end load
C) No-load
D) Redemption fee
,Answer: B
Rationale: Front-end loads are sales charges deducted from the investment amount.
5. What is a breakpoint in mutual fund sales?
A) A point where fees increase
B) A sales charge reduction threshold
C) The minimum holding period
D) Annual expense limit
Answer: B
Rationale: Breakpoints lower the sales charge for larger investments.
6. Which mutual fund type invests primarily in stocks?
A) Bond fund
B) Money market fund
C) Equity fund
D) Balanced fund
Answer: C
Rationale: Equity funds focus on common stocks for growth potential.
7. What is the role of a mutual fund's board of directors?
A) Daily trading decisions
B) Oversight of fund management
C) Marketing the fund
D) Calculating NAV
Answer: B
, Rationale: The board ensures the fund operates in shareholders' best interests.
8. In a no-load fund, what fee might still apply?
A) 12b-1 fee
B) Front-end load
C) Contingent deferred sales charge
D) Purchase fee
Answer: A
Rationale: 12b-1 fees cover distribution and marketing costs.
9. What is a money market fund's main objective?
A) Capital appreciation
B) High risk trading
C) Preservation of capital and liquidity
D) Tax exemption
Answer: C
Rationale: These funds invest in short-term, low-risk debt for stability.
10. Which is a characteristic of index funds?
A) Active stock picking
B) Passive tracking of a market index
C) Guaranteed returns
D) High turnover rates
Answer: B
Rationale: Index funds aim to replicate benchmark performance with low costs.
– STC Greenlight Version with Verified
Answers for Top Score Assurance
Introduction
This document provides a focused preparation resource for the Series 6 exam,
emphasizing key concepts in investment company products and variable contracts. It
includes over 200 multiple-choice questions with verified answers, designed for efficient
review. Questions are numbered sequentially for easy tracking. Each question is followed
by the correct answer and a brief rationale to reinforce understanding. Content draws from
standard exam outlines, prioritizing clarity and relevance without excess details.
Total Questions: 210
Structure: Questions 1-100 cover foundational topics; Questions 101-210 expand on
advanced applications and scenarios.
Section 1: Investment Company Products (Questions 1-
100)
1. What is the primary purpose of a mutual fund?
A) To provide fixed income only
B) To pool investor money for diversified investments
C) To guarantee principal protection
,D) To offer unlimited trading flexibility
Answer: B
Rationale: Mutual funds collect capital from multiple investors to buy a diversified portfolio
of securities.
2. Which feature distinguishes open-end mutual funds from closed-end funds?
A) Fixed number of shares
B) Continuous issuance and redemption of shares
C) Higher minimum investment requirements
D) Exclusive focus on bonds
Answer: B
Rationale: Open-end funds allow shares to be created or redeemed daily based on NAV.
3. What does NAV stand for in mutual funds?
A) Net Asset Value
B) Nominal Annual Yield
C) New Account Value
D) Net Allocation Value
Answer: A
Rationale: NAV is the per-share value of the fund's assets minus liabilities.
4. A load fund charges a fee at the time of purchase. What is this called?
A) Back-end load
B) Front-end load
C) No-load
D) Redemption fee
,Answer: B
Rationale: Front-end loads are sales charges deducted from the investment amount.
5. What is a breakpoint in mutual fund sales?
A) A point where fees increase
B) A sales charge reduction threshold
C) The minimum holding period
D) Annual expense limit
Answer: B
Rationale: Breakpoints lower the sales charge for larger investments.
6. Which mutual fund type invests primarily in stocks?
A) Bond fund
B) Money market fund
C) Equity fund
D) Balanced fund
Answer: C
Rationale: Equity funds focus on common stocks for growth potential.
7. What is the role of a mutual fund's board of directors?
A) Daily trading decisions
B) Oversight of fund management
C) Marketing the fund
D) Calculating NAV
Answer: B
, Rationale: The board ensures the fund operates in shareholders' best interests.
8. In a no-load fund, what fee might still apply?
A) 12b-1 fee
B) Front-end load
C) Contingent deferred sales charge
D) Purchase fee
Answer: A
Rationale: 12b-1 fees cover distribution and marketing costs.
9. What is a money market fund's main objective?
A) Capital appreciation
B) High risk trading
C) Preservation of capital and liquidity
D) Tax exemption
Answer: C
Rationale: These funds invest in short-term, low-risk debt for stability.
10. Which is a characteristic of index funds?
A) Active stock picking
B) Passive tracking of a market index
C) Guaranteed returns
D) High turnover rates
Answer: B
Rationale: Index funds aim to replicate benchmark performance with low costs.
