FINRA Series 6 Practice Test & Mock Exam

Series 6 rewards candidates who can match mutual funds and variable products to the client appropriately, explain costs and disclosures clearly, and process representative activity without missing the compliance step. If you are searching for Series 6 sample questions, a practice test, mock exam, or simulator, this is the main Securities Prep page to start on web and continue on iOS or Android with the same account. This page includes 24 sample questions with detailed explanations so you can try the exam style before opening the full app question bank.

Interactive Practice Center

Start a practice session for Series 6 below, or open the full app in a new tab. For the best experience, open the full app in a new tab and navigate with swipes/gestures or the mouse wheel—just like on your phone or tablet.

▶ Click to Load Interactive App

Open Full App in a New Tab

A small set of questions is available for free preview. Subscribers can unlock full access by signing in with the same account they use on web and mobile.

Prefer to practice on your phone or tablet? Download the Securities Prep app:

Scan for iOS (United States)

Scan for Android (United States)

• iOS: United States · Canada
• Android: United States · Canada

If you already subscribed on web or mobile, sign in with the same account here to continue on desktop.

Free diagnostic: Try the 50-question Series 6 full-length practice exam before subscribing.

What this Series 6 practice page gives you

• a direct route into the Securities Prep simulator for Series 6
• targeted practice around mutual funds, variable annuities, variable life, 529 plans, and suitability workflow
• detailed explanations that show why the strongest representative response is the most defensible
• a clear free-preview path before you subscribe
• the same subscription across web and mobile

Series 6 exam snapshot

• Provider: FINRA
• Exam: Investment Company and Variable Contracts Products Representative Qualification Exam
• Practice reference: 50 practice questions in 90 minutes
• Registration context: generally paired with the SIE

Topic coverage for Series 6 practice

• Packaged products: mutual funds, variable annuities, variable life, and municipal fund securities
• Client-fit decisions: suitability, disclosures, costs, and product-risk tradeoffs
• Transaction workflow: representative processing, compliant next steps, and documentation

How to use the Series 6 simulator efficiently

1. Start with packaged-product and suitability drills so the representative workflow becomes easy to recognize.
2. Review every miss until you can explain which product feature, cost, or disclosure issue changed the answer.
3. Move into mixed sets once you can switch between product, suitability, and processing scenarios without hesitation.
4. Finish with timed runs so the 90-minute pace feels controlled.

Free preview vs premium

• Free preview: 24 public sample questions on this page plus the web app entry so you can validate the question style and explanation depth.
• Premium: the full Series 6 practice bank, focused drills, mixed sets, timed mock exams, detailed explanations, and progress tracking across web and mobile.

Free samples and full bank

• Live now: this exact practice route is available in Securities Prep on web, iOS, and Android.
• On-page sample set: this page includes 24 public sample questions from the current practice coverage.
• Full app: open the Securities Prep web app or mobile app for broader timed coverage.

Free review resources

Use these free SecuritiesMastery.com resources for concept review, then return to this page when you are ready to practice in Securities Prep.

• Series 6 Cheat Sheet
• Series 6 Study Guide

Focused sample questions

Use these focused Series 6 sample-question pages when you want to isolate one official topic area before returning to the mixed simulator.

• Business Development
• Customer Accounts
• Packaged Product Recommendations
• Transaction Processing
• Free Series 6 Full-Length Practice Exam

24 Series 6 sample questions with detailed explanations

These sample questions cover multiple blueprint areas for Series 6. Use them to check your readiness here, then move into the full Securities Prep question bank for broader timed coverage.

Question 1

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer has a 529 plan held at your broker-dealer and requests an $8,000 distribution “to reimburse myself for college costs” for her daughter who is currently enrolled at an eligible university. She can’t specify whether the spending was tuition, required fees, or general living expenses.

As the registered representative, what is the best next step before initiating the withdrawal request?

• A. Clarify the specific expenses and explain that only qualified education expenses receive tax-favored treatment
• B. Recommend taking the distribution and using the 1099-Q to claim the entire amount as tax-free
• C. Advise moving the account to a different 529 plan because withdrawals are always federally tax-free
• D. Process the distribution immediately because the beneficiary is enrolled at an eligible school

Best answer: A

Explanation: Before submitting paperwork, the representative should gather enough information to determine whether the withdrawal will be used for qualified education expenses. Qualified withdrawals generally receive tax-favored treatment, while nonqualified withdrawals can result in taxable income on the earnings portion and may be subject to an additional tax penalty. Providing general guidance and encouraging the customer to consult a tax professional helps avoid giving specific tax advice.

Question 2

Topic: Function 4 — Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions

Which transaction is a primary market transaction (and why does the source of the security matter)?

• A. Buying newly issued open-end mutual fund shares from the fund, where proceeds go to the issuer
• B. Buying ETF shares on an exchange, where proceeds go to the ETF sponsor
• C. Buying closed-end fund shares on an exchange, where proceeds go to the closed-end fund
• D. Buying UIT units from another investor in the secondary market, where proceeds go to the UIT sponsor

Best answer: A

Explanation: A primary market transaction involves buying securities directly from the issuer, meaning the investor’s payment provides capital to that issuer. In contrast, secondary market transactions occur between investors, so the seller—not the issuer—receives the proceeds. Knowing the source helps distinguish issuance/capital-raising from trading liquidity.

Question 3

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

A customer with an existing mutual fund account tells the registered representative: “I’m traveling for months—please make fund exchanges for me whenever you think it’s appropriate, without contacting me each time.” The customer’s financial profile and investment objectives are already on file and up to date. The customer wants the representative to start making exchanges this week.

What is the best next step?

• A. Accept verbal authorization if a supervisor witnesses the call
• B. Execute the first exchange, then collect authorization afterward
• C. Obtain written discretionary authorization and principal approval
• D. Send the customer a trade confirmation disclosing discretion

Best answer: C

Explanation: The customer is requesting discretionary authority, meaning the representative would decide the timing and selection of exchanges. Before placing any discretionary transactions, the firm must have the customer’s written authorization (such as a limited power of attorney) and the required supervisory/principal approval on record.

Question 4

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer reviewing two stocks held in an equity mutual fund asks which company appears more leveraged based on its balance sheet.

Exhibit: Balance sheet snapshot (USD, in millions)

Company   Total Assets   Total Liabilities
X         $500           $400
Y         $500           $250

Using shareholders’ equity = assets − liabilities and debt-to-equity = liabilities ÷ equity (round to one decimal), which choice is correct, and why?

• A. Company Y; equity $250m, debt-to-equity 0.3
• B. Company X; equity $100m, debt-to-equity 4.0
• C. Company Y; equity $250m, debt-to-equity 2.0
• D. Company X; equity $400m, debt-to-equity 1.3

Best answer: B

Explanation: Shareholders’ equity is the residual claim after liabilities, so it equals assets minus liabilities. Leverage is commonly assessed by comparing liabilities to equity; a higher debt-to-equity ratio generally increases financial risk because a larger portion of assets is financed by creditors.

Question 5

Topic: Function 4 — Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions

A customer enters a market order to buy 500 shares of an equity ETF through a broker-dealer’s app.

Exhibit: Execution summary

Security: ABCD ETF
Order: Buy 500 MKT
Time received: 10:30:12 ET
NBBO at receipt: 25.10 bid / 25.12 ask
Routed to (market center): WHSLR1 (wholesaler)
Executed: 10:30:13 ET @ 25.13
Price improvement: 0.00
Payment for order flow: Yes

Which statement is best supported by the exhibit and baseline best-execution concepts?

• A. Customers are not permitted to learn which market center executed their order
• B. The execution proves a best-execution violation because 25.13 exceeds 25.12
• C. Because it is an ETF, the trade will be priced at end-of-day NAV
• D. Routing to a wholesaler can affect execution quality and requires routing/PFOF disclosure

Best answer: D

Explanation: The exhibit shows the broker-dealer routed a market order to a particular market center (a wholesaler) and received payment for order flow. Where an order is routed can influence execution outcomes such as price improvement, speed, and fill quality. Because routing can create conflicts, firms must seek best execution and provide appropriate order-routing and PFOF disclosures.

Question 6

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A registered representative drafts a marketing email to retirees about a variable annuity subaccount. The email says, “The subaccount returned 12% last year and should deliver double-digit returns again, making it the safest way to grow retirement income.” The RR wants to send it to 200 prospects.

Which option identifies the primary risk/limitation the RR must address before using this communication?

• A. Surrender charges may apply if the customer withdraws early
• B. Opinions/projections can’t be presented as facts, and claims need a basis
• C. Withdrawals before age 59½ may be subject to tax penalties
• D. Subaccount values fluctuate with the market and can lose value

Best answer: B

Explanation: The main issue is that the email turns a past return into an implied promise and presents a subjective “safest” claim as if it were a fact. Communications must clearly separate facts from opinions and any performance-related statements must have a reasonable basis and be presented in a fair and balanced way. Otherwise, the message can be misleading to prospects.

Question 7

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer asks a registered representative what products are considered “municipal fund securities.” Which statement is INCORRECT?

• A. Interests in local government investment pools can be municipal fund securities
• B. ABLE account programs are municipal fund securities
• C. LGIP investments are FDIC-insured bank deposits
• D. Interests in 529 college savings plans are municipal fund securities

Best answer: C

Explanation: Municipal fund securities are a category of municipal securities that includes interests in 529 plans, ABLE programs, and certain local government investment pools. They are investment products offered through governmental-sponsored programs and do not carry FDIC insurance simply because a government is involved. Stating that an LGIP is an FDIC-insured bank deposit is inaccurate.

Question 8

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A customer wants to invest in a brand-new mutual fund “as soon as it launches” and asks your firm to place the purchase today based on a draft prospectus. You confirm the fund’s registration statement has been filed with the SEC but is not yet effective. Which primary tradeoff/limitation should the customer understand in this situation?

• A. The registration statement guarantees the fund’s NAV stability
• B. The SEC has approved the fund as a good investment
• C. The registration statement sets the fund’s daily NAV pricing
• D. No sale is final until effective; disclosures may change

Best answer: D

Explanation: A registration statement’s purpose is to support the offering process through mandated disclosure (including the prospectus), not to endorse the investment. If the registration statement is only filed and not effective, the offering’s terms can still change and the transaction cannot be completed as a final sale yet.

Question 9

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A registered representative is discussing a variable annuity exchange with a customer who prefers texting. The representative has been using a personal phone to text and plans to delete the messages after submitting the application because “the signed forms are what matter.” Which action best complies with a high-level books-and-records expectation for broker-dealers?

• A. Move the conversation to firm-approved, archived channels and keep related records
• B. Continue texting, but save screenshots in a personal cloud folder
• C. Delete the texts once the customer signs the exchange paperwork
• D. Use a personal email account and forward key messages to the customer file

Best answer: A

Explanation: Firms are expected to retain and be able to produce business communications and transaction records so regulators and supervisors can reconstruct what occurred and evaluate sales practices. Using only firm-approved, monitored, and archived systems helps ensure messages are captured, cannot be selectively altered or deleted, and can be retrieved when needed. That customer-protection purpose applies even when “final” paperwork is signed.

Question 10

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

A customer opens a new mutual fund account through the firm’s online portal and wants to invest $75,000 immediately. The uploaded driver’s license shows a different last name than the application, the address is a commercial mail drop, and the customer says the initial deposit will be a wire from a “business partner” whose name is not on the account. The customer pressures the representative to “just open it now” and says the details can be fixed later.

Which option states the primary risk/limitation that matters most in this setup?

• A. The customer may pay unnecessary sales charges without breakpoints
• B. The customer may face penalties if they redeem too soon
• C. The mutual fund’s NAV may decline after purchase
• D. The firm may be unable to verify identity, requiring escalation

Best answer: D

Explanation: The key issue is the cluster of identity and funding inconsistencies that signal possible suspicious activity. When information can’t be reasonably verified or facts don’t align, the representative should not “push it through” to meet the customer’s timeline. The expectation is to escalate concerns to a supervisor/AML or compliance channel and follow the firm’s CIP procedures.

Question 11

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer is considering a variable annuity and says, “I’m comfortable with market risk, but I want to understand what this will really cost me over time.” Which statement by the registered representative best meets a customer-protection standard when explaining variable annuity costs?

• A. “Variable annuities have layered costs—typically mortality and expense risk charges, administrative fees, and the underlying subaccount expenses—and those ongoing charges reduce your net return; you should also review the surrender-charge schedule because early withdrawals can add a separate cost.”
• B. “The main cost is the mortality and expense risk charge; subaccount expenses are minimal and usually don’t affect performance much.”
• C. “Don’t worry about the fees—variable annuity illustrations already reflect the product’s total costs, so your return should match the hypothetical performance.”
• D. “Surrender charges only apply if the account value is down; if the annuity has grown, withdrawals won’t have an extra cost.”

Best answer: A

Explanation: The most appropriate response explains that variable annuities have multiple layers of cost that are deducted from the customer’s account and therefore lower net performance. It also flags that surrender charges are a separate, transaction-based cost that may apply if the customer withdraws or surrenders during the surrender period.

Question 12

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer is considering an actively managed U.S. large-cap equity mutual fund but wants to compare it fairly to the S&P 500 Index. She is concerned that any “outperformance” might simply come from taking more market risk than the index. She asks for a single statistic that estimates the portion of the fund’s return attributable to the manager after adjusting for the fund’s exposure to the benchmark.

Which recommendation best satisfies her request?

• A. Use the fund’s alpha versus the S&P 500
• B. Use the fund’s R-squared to the S&P 500
• C. Use the fund’s standard deviation of returns
• D. Use the fund’s beta versus the S&P 500

Best answer: A

Explanation: Alpha is a performance-evaluation measure that focuses on return relative to a benchmark after adjusting for the fund’s sensitivity to that benchmark (its beta). A positive alpha suggests the manager added value beyond what would be expected from market exposure, while a negative alpha suggests underperformance on that basis.

Question 13

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer buys Class A mutual fund shares in her brokerage account. The next day she asks which document will typically show the details of that specific transaction—trade date, number of shares, price (NAV), and the total amount paid including any sales charge.

Which document best matches what the customer is asking for?

• A. The customer’s periodic account statement
• B. The trade confirmation
• C. The mutual fund’s statutory prospectus
• D. The mutual fund’s shareholder report

Best answer: B

Explanation: A trade confirmation is designed to document the execution details of a particular transaction in the customer’s account. It typically includes the trade date, quantity, price (such as mutual fund NAV), and the total dollar amount, reflecting applicable charges. A prospectus and account statements provide different, broader types of information.

Question 14

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

A broker-dealer requires registered representatives to use firm-approved encrypted email, restricts access to customer Social Security numbers to authorized staff, and maintains written procedures for handling a suspected data breach. This set of practices is primarily intended to fulfill which account-administration function?

• A. Prevent insider trading through information barriers
• B. Ensure mutual fund purchases receive the correct breakpoint discount
• C. Safeguard customers’ nonpublic personal information from unauthorized access
• D. Document a customer’s investment objectives for suitability review

Best answer: C

Explanation: Information security and data-safeguarding procedures are required because firms maintain sensitive customer records (nonpublic personal information). Controls like encryption, access limits, and breach-response processes help prevent unauthorized access, identity theft, and misuse of customer information as part of account administration.

Question 15

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer places an online order to buy $25,000 of ABC Growth Fund Class A through a broker-dealer. Before submitting, the customer is shown the following disclosure.

Exhibit: Trade disclosure (pre‑submission)

Which interpretation is supported by the exhibit and baseline Series 6 knowledge?

• A. It confirms the customer will receive the breakpoint discount automatically.
• B. It discloses material pricing, costs, and a compensation conflict.
• C. It guarantees the fund will not lose principal if held long term.
• D. It shows Class A shares have no ongoing distribution expenses.

Best answer: B

Explanation: Transaction-related disclosures are provided so customers can make informed decisions with a clear view of material product features and trade terms. Here, the exhibit specifically identifies how the order will be priced, the sales charges and ongoing fees, and the fact that the broker-dealer and representative are compensated. Those items address material costs and potential conflicts of interest tied to the transaction.

Question 16

Topic: Function 4 — Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions

A customer is placing an online order to buy 1,000 shares of an ETF currently showing a quote of \(\$25.10\) bid and \(\$25.12\) ask. The customer says, “I need this filled today, but I don’t want to pay more than \(\$25.15\) per share.” Which response by the registered representative best reflects a customer-protection standard about market and limit orders?

(Assume the ETF trades intraday and the market is open.)

• A. Use a buy stop order at \(\$25.15\) to cap the purchase price
• B. Use a sell limit order at \(\$25.15\) to control the price
• C. Use a buy limit order at \(\$25.15\) and explain it may not fill
• D. Use a buy market order to ensure execution today

Best answer: C

Explanation: A buy limit order aligns with the customer’s stated maximum price because it will not execute above the limit. The trade may execute at \(\$25.15\) or better, but it can remain unfilled if the ETF’s price rises above the limit. This properly balances price protection versus execution certainty.

Question 17

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer set up an automatic $500 monthly purchase into ABC Growth Fund in a brokerage account. The customer elected to receive account statements quarterly by e-delivery. Because of a bank-link problem, the April–June automatic purchases never occurred, so there were no trade confirmations for those months. When the customer reviews the July quarterly statement, the missing purchases are noticed and the customer asks the representative to “buy the missed shares at April, May, and June prices.”

What is the most likely outcome?

• A. The firm can backdate the purchases at prior month NAVs
• B. Dividend reinvestment will automatically replace the missed shares
• C. The fund must honor the lowest NAV from April–June
• D. Any new purchase will be priced at the next computed NAV

Best answer: D

Explanation: Mutual funds are priced once per day, and orders receive the next computed NAV after the order is accepted. If missed purchases are discovered later through a periodic account statement, the customer cannot retroactively buy at earlier NAVs. This illustrates why complete, timely statements matter for catching missing activity sooner.

Question 18

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A registered representative uploads a prewritten, evergreen web page to the firm’s site promoting a variable annuity’s features. The page will display unchanged to all visitors until the firm edits it. Later, the representative answers investors’ questions in a live, text-based webinar Q&A.

What is the most likely supervisory outcome for these two communications?

• A. Neither communication must be retained because both are electronic
• B. Only the live Q&A requires principal preapproval
• C. The web page is preapproved; the live Q&A is monitored/ reviewed after
• D. Both the web page and live Q&A require principal preapproval

Best answer: C

Explanation: Because the web page content is static and distributed the same way to everyone, it is typically treated like a retail advertisement and requires principal approval before it is posted. A live webinar Q&A is interactive electronic communication that functions more like a conversation. Firms generally supervise it through risk-based monitoring and post-use review rather than preapproving each exchange.

Question 19

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A registered representative is hosting a free “Basics of Investing” webinar for the public next week. She wants to (1) discuss diversification and how mutual funds and variable annuities work in general, (2) avoid making an offer of any specific product during the webinar, and (3) keep the material in the category of a generic educational communication rather than product-specific sales material. Which action best satisfies these constraints?

• A. Distribute a fund family’s prospectus and application during the webinar to “cover” any communication concerns
• B. Include a slide listing specific mutual funds by name with their recent returns as examples of diversification
• C. Mention a specific variable annuity by name but state that the webinar is “not a recommendation”
• D. Use an educational piece that avoids naming any specific fund/contract or showing performance, and handle any product discussions later with required disclosures

Best answer: D

Explanation: A generic communication is educational and discusses products at a high level without identifying specific funds or contracts or highlighting performance. Once a communication identifies a particular product or emphasizes performance, it becomes product-specific sales material and generally triggers additional firm approval, disclosure, and use standards. Using a truly generic piece and deferring product details to later discussions best meets the representative’s goals.

Question 20

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A customer is considering a new mutual fund offering. The registered representative shows the customer a preliminary prospectus and a marketing flyer describing an estimated front-end sales charge and a tentative investment objective. The customer asks whether those terms are guaranteed.

Which statement by the representative is INCORRECT?

• A. “If anything differs in the final prospectus, the final prospectus terms apply.”
• B. “You can rely on the preliminary prospectus and flyer; final documents won’t differ materially.”
• C. “Only the final prospectus is controlling, so you should review it before investing.”
• D. “Those terms can change; we’ll confirm final charges and features in the statutory prospectus.”

Best answer: B

Explanation: Preliminary offering documents and sales literature are subject to change before an offering is finalized. A representative should set the expectation that final terms—such as sales charges, pricing, and product features—must be verified in the final, statutory prospectus. Stating that customers can rely on preliminary materials as if they will not change is not appropriate.

Question 21

Topic: Function 4 — Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions

A customer sees a real-time quote for an ETF at \(\$25.10\) on their app at 2:15 p.m. ET and asks how pricing works if they place an order now. Which statement by the registered representative is INCORRECT?

Assume markets are open and the customer places the order during regular trading hours.

• A. A mutual fund order placed now will execute at today’s next calculated NAV
• B. The ETF can be bought or sold during the day at market prices
• C. If you place a mutual fund order now, you’ll receive the current quoted price
• D. The mutual fund’s price is set once per day after the market closes

Best answer: C

Explanation: ETFs are exchange-traded and generally have intraday bid/ask quotes and execution prices during the trading day. Mutual funds are forward priced, meaning orders entered before the fund’s pricing time receive the next calculated NAV, typically computed after the market closes. Therefore, treating a mutual fund like an intraday-quoted security is incorrect.

Question 22

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer wants to invest $80,000 into a diversified mutual fund portfolio and expects to make very few changes over the next several years. She is considering the firm’s fee-based program that charges a 1.00% annual asset-based fee and says she mainly wants “a check-in call once or twice a year” and is very cost-sensitive. Which action is the registered representative’s BEST recommendation to satisfy these constraints?

• A. Explain the ongoing fee and total costs in writing, and recommend it only if services will be used
• B. Recommend Class C shares so ongoing 12b-1 fees offset the advisory fee
• C. Recommend the fee-based program because it eliminates sales charges and is always cheaper
• D. Open the fee-based account and rely on the firm’s website fee schedule as disclosure

Best answer: A

Explanation: Fee-based pricing means the customer pays an ongoing asset-based fee that continues whether or not trades occur, and it is typically in addition to the mutual funds’ internal expenses. Because the customer anticipates minimal activity and is cost-sensitive, the representative should clearly disclose the program’s total costs and recommend it only if the ongoing services provide enough value to justify the recurring fee.

Question 23

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

A registered representative is completing a new customer investment profile (all amounts in USD). The customer reports:

• Primary residence: $450,000; mortgage balance: $280,000
• Checking/savings: $35,000
• Taxable brokerage account: $120,000
• 401(k): $300,000
• Auto: $25,000; auto loan balance: $10,000
• Credit card balance: $5,000

What is the customer’s approximate net worth to enter on the profile (round to the nearest $1,000)?

• A. $355,000
• B. $650,000
• C. $930,000
• D. $635,000

Best answer: D

Explanation: Net worth is calculated by subtracting total liabilities from total assets, using the customer’s stated values. Here, the customer’s assets include the residence, retirement account, and other property, while liabilities include the mortgage, auto loan, and credit card balance. Rounding to the nearest $1,000 does not change the result.

Question 24

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A customer buys shares that are issued by the investment company itself and are priced once per day at the next calculated NAV. Because the purchase is part of a continuous primary distribution, the customer must receive the fund’s current prospectus.

Which choice best matches this description?

• A. Closed-end fund shares purchased on an exchange (secondary market)
• B. Open-end mutual fund purchased from the fund (primary offering)
• C. ETF shares purchased intraday at a market price (secondary market)
• D. UIT units purchased in the secondary market from another investor

Best answer: B

Explanation: The description fits an open-end mutual fund sold directly by the fund company in a continuous primary offering. Open-end shares are not traded between investors on an exchange and are priced once daily at the next computed NAV. Because it is a primary distribution, a current prospectus applies to the sale.

Series 6 packaged products map

Use this map after the sample questions to connect individual items to investment companies, variable contracts, customer profile, suitability, disclosure, and communications decisions these Securities Prep samples test.

    flowchart LR
	  S1["Customer objective or product question"] --> S2
	  S2["Identify fund annuity or account feature"] --> S3
	  S3["Review risk fees liquidity and tax treatment"] --> S4
	  S4["Apply suitability and disclosure duties"] --> S5
	  S5["Handle order communication or replacement issue"] --> S6
	  S6["Document recommendation rationale"]

Quick Cheat Sheet

Mini Glossary

• Suitability: Assessment that a recommendation fits the customer profile and the representative’s obligations.
• Customer profile: Facts such as objective, risk tolerance, liquidity need, time horizon, tax status, and constraints.
• Communications: Retail and institutional content subject to approval, recordkeeping, and fair-balanced standards.
• Supervision: Firm process for review, approval, escalation, and evidence of compliance.
• AML: Anti-money laundering controls for identifying, monitoring, and reporting suspicious activity.

In this section

• Series 6: Business Development
  Try 10 focused Series 6 questions on Business Development, with explanations, then continue with the full Securities Prep practice test.
• Series 6: Customer Accounts
  Try 10 focused Series 6 questions on Customer Accounts, with explanations, then continue with the full Securities Prep practice test.
• Series 6: Packaged Product Recommendations
  Try 10 focused Series 6 questions on Packaged Product Recommendations, with explanations, then continue with the full Securities Prep practice test.
• Series 6: Transaction Processing
  Try 10 focused Series 6 questions on Transaction Processing, with explanations, then continue with the full Securities Prep practice test.
• Free Series 6 Full-Length Practice Exam: 50 Questions
  Try 50 free Series 6 practice questions across the official topic areas, with answers and explanations, then continue with the full Securities Prep question bank.