Series 6 – Investment Company and Variable Contract Products Representation Qualification Exam Mutual Funds & Investment Companies Flashcards
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Under the Investment Company Act of 1940, a mutual fund is classified as which type of investment company?
Answer: Open-end management company
Mutual funds are classified as open-end management companies because they continuously issue and redeem shares at NAV.
A mutual fund's net asset value (NAV) per share is calculated by:
Answer: Dividing (total assets minus total liabilities) by total shares outstanding
NAV equals total fund assets minus liabilities, divided by the number of shares outstanding.
Which type of mutual fund sales charge is deducted at the time of purchase?
Answer: Front-end load
A front-end load is a sales charge collected at the time of purchase, reducing the amount invested.
What is the maximum sales charge permitted on a mutual fund under FINRA rules?
Answer: 8.5%
FINRA limits mutual fund sales charges to a maximum of 8.5% of the public offering price.
A breakpoint in mutual fund sales is best described as:
Answer: A reduced sales charge available when purchases reach a certain dollar threshold
Breakpoints are investment thresholds at which investors qualify for reduced front-end sales charges.
Which of the following best describes a 12b-1 fee?
Answer: An annual fee used to cover the fund's distribution and marketing expenses
A 12b-1 fee is an annual charge deducted from fund assets to pay for distribution, marketing, and sometimes shareholder services.
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Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy
- finra.org — Renewal, score validity, retake policy, score release, test dates, eligibility, fees, exam format, passing score · verified Oct 2026
- prometric.com — Test delivery · verified Oct 2026