Series 6 Investment Products Quiz

1. A Unit Investment Trust (UIT) differs from a mutual fund primarily in that a UIT:

Is actively managed

Has a fixed portfolio and termination date

Offers daily NAV pricing

Requires a prospectus

2. A money market fund is designed to maintain a stable NAV of:

$1.00 per share

$5.00 per share

$10.00 per share

$25.00 per share

3. Exchange-traded funds (ETFs) differ from traditional mutual funds in that ETFs:

Are not registered investment companies

Trade on exchanges like stocks throughout the day

Cannot hold diversified portfolios

Always charge higher expense ratios

4. In a variable universal life (VUL) insurance policy, the policyholder typically has control over:

Premium amounts and separate account allocations

Underwriting and policy approval

The insurance company's investment strategy

Annual dividend payments

5. A closed-end fund's share price is determined primarily by:

The fund's NAV only

Supply and demand in the secondary market

The fund manager's discretion

Daily market indices

6. An open-end mutual fund must redeem shares at NAV:

Once per quarter

At the close of each business day

Monthly only

At the fund company's discretion

7. Breakpoints in mutual fund sales allow customers to pay lower sales charges when purchasing shares over:

A specified dollar amount

A certain holding period

Multiple transactions

Different share classes

8. Which of the following is NOT a characteristic of mutual funds?

Professional management

Unlimited liability for shareholders

Diversification of holdings

Pooled investment structure

9. Class B mutual fund shares typically have:

High upfront sales charges

Contingent deferred sales charges that decline over time

No sales charges at all

Annual redemption fees

10. Which investment product is primarily designed to provide retirement income with tax deferral?

Closed-end fund

Annuity

Unit investment trust

Exchange-traded fund

11. The Net Asset Value (NAV) of a mutual fund is calculated by dividing total assets minus liabilities by:

Total shares outstanding

Number of fund managers

Annual expense ratio

Total fund expenses

12. Variable life insurance policies contain a death benefit that may vary based on:

Market performance of the separate account

The policyholder's age

Current interest rates

The insurance company's profits

13. A prospectus for a mutual fund must be delivered to customers:

At the time of sale or before

Within 30 days of purchase

Upon request only

Within 90 days of purchase

14. Under FINRA rules, mutual fund sales charges are limited to what maximum percentage?

5.25%

8.5%

10%

12.5%

15. A variable annuity contract typically includes which two accounts?

Fixed and variable accounts

Separate and general accounts

Investment and insurance accounts

Qualified and non-qualified accounts

16. A 12b-1 fee in a mutual fund is used primarily to cover:

Management and advisory fees

Marketing and distribution costs

Custodial and administrative fees

Brokerage commissions

17. The separate account of a variable annuity is regulated as a(n):

Bank trust account

Investment company

Insurance reserve

Brokerage account

18. Which of the following best describes a hedge fund?

A registered mutual fund with limited redemptions

An unregistered investment pool with fewer regulatory restrictions

A government-backed investment vehicle

A type of variable annuity

19. Which share class typically has the lowest ongoing expenses but requires a larger initial investment?

Class A

Class B

Class C

Class I

20. The Investment Company Act of 1940 requires that mutual funds have a board of directors with a majority of:

Inside directors

Independent directors

Fund managers

Shareholders

FINRA Series 6 Investment Products Basics Quiz