Series 6 – Investment Company and Variable Contract Products Representation Qualification Exam Series 6 – Investment Company and Variable Contract Products Representation Qualification Exam Mutual Funds & Investment Companies

Question 1

Under the Investment Company Act of 1940, a mutual fund is classified as which type of investment company?

Accepted Answer

Open-end management company

Answer

Closed-end company

Answer

Unit investment trust

Answer

Face-amount certificate company

Question 2

A mutual fund's net asset value (NAV) per share is calculated by:

Accepted Answer

Dividing (total assets minus total liabilities) by total shares outstanding

Answer

Dividing total liabilities by total shares outstanding

Answer

Multiplying total assets by the expense ratio

Answer

Subtracting the sales charge from the public offering price

Question 3

Which type of mutual fund sales charge is deducted at the time of purchase?

Accepted Answer

Front-end load

Answer

Contingent deferred sales charge

Answer

12b-1 fee

Answer

Back-end load

Question 4

What is the maximum sales charge permitted on a mutual fund under FINRA rules?

Accepted Answer

8.5%

Answer

5.5%

Answer

6.0%

Answer

7.0%

Question 5

A breakpoint in mutual fund sales is best described as:

Accepted Answer

A reduced sales charge available when purchases reach a certain dollar threshold

Answer

The point at which a fund stops accepting new investors

Answer

The date on which dividends are declared

Answer

The minimum initial investment required to open a fund account

Question 6

Which of the following best describes a 12b-1 fee?

Accepted Answer

An annual fee used to cover the fund's distribution and marketing expenses

Answer

A fee charged when shares are redeemed within a certain period

Answer

A fee paid to the portfolio manager for investment advice

Answer

A transaction fee charged on every trade within the fund