Discuss Finra Series-6 Exam Topic 5 Question 85

: 130

When a client purchases a variable contract through you, he should be informed that his money will be invested:

Aat the most recent price for which the contract sold.

Bat the next price that is computed after the contract application is accepted by the insurance company.

Cat the previous day's close price for the contract.

Din a product with a guaranteed cash value.

Suggested Answer: B

The fund's beginning NAV was $9.66, its ending NAV was $12.00, and its distributions during the year totaled $0.22 a share, so the total return on the MedTech Fund over this period was 26.5%. Total return can be calculated as:

[(ending NAV + distributions) - beginning NAV]/beginning NAV = [($12.00 + $0.22) -$9.66]/$9.66 = 26.5%.

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33 comments · newest first

Tesha 11 months ago

D is totally misleading, no guaranteed cash value in these!

Frederica 11 months ago

Wait, are we sure about B? Sounds a bit sketchy.

Stephane 12 months ago

C seems off, they wouldn't use the previous day's price.

Gayla 12 months ago

I thought it was A, but B makes more sense.

Myra 1 year ago

It's definitely B, that's how variable contracts work!

Kristal 1 year ago

I definitely remember that variable contracts don't have a guaranteed cash value, so I don't think D is correct.

Mollie 1 year ago

I feel like the answer might be A, but I can't recall the specifics of how variable contracts work.

Raymon 1 year ago

I remember a practice question about variable contracts, and I think it mentioned something about the previous day's close price.

Marylin 1 year ago

I think the investment happens at the next price after the application is accepted, but I'm not completely sure.

Beula 1 year ago

This is a tricky one. I'm torn between A and B, since both mention pricing the investment. But I think B is the better choice since it specifies the next computed price after acceptance, which makes more sense for a variable contract. I'll go with B.

Francesco 1 year ago

Okay, I think I've got this. The key is that the client's money will be invested at the next price computed after the contract is accepted, not the most recent or previous day's price. I'm confident B is the right answer.

Janae 1 year ago

Hmm, I'm a bit unsure about this one. I know variable contracts are tied to the market, but I'm not sure if the investment is based on the most recent price, the next computed price, or the previous day's close. I'll have to think it through.

Linwood 1 year ago

This seems like a straightforward question about how variable contracts are priced. I'll carefully review the options and think through the key details to select the correct answer.

Becky 1 year ago

Hmm, I'm not entirely sure about the difference between agile and traditional techniques in this context. I'll have to review my notes.

Leanora 1 year ago

I remember discussing trends and shifts in our last study session. I think this graph might indicate a trend, but the wording is throwing me off a bit.

Pearlie 1 year ago

B) is the obvious choice here. Unless the client wants their money to be invested in a black hole, then D) might be the way to go.

Yolando 1 year ago

↳ replying to Pearlie

C) at the previous day's close price for the contract.

Nieves 1 year ago

↳ replying to Pearlie

B) at the next price that is computed after the contract application is accepted by the insurance company.

Shonda 1 year ago

↳ replying to Pearlie

A) at the most recent price for which the contract sold.

Sang 2 years ago

C) Previous day's close price? Might as well just light the client's money on fire.

Frankie 1 year ago

↳ replying to Sang

C) at the previous day's close price for the contract.

Eric 1 year ago

↳ replying to Sang

B) at the next price that is computed after the contract application is accepted by the insurance company.

Adelina 1 year ago

↳ replying to Sang

A) at the most recent price for which the contract sold.

Rene 2 years ago

A) No way, they can't just use the most recent price. That's not fair to the client!

Royal 2 years ago

D) a guaranteed cash value product? That's just too good to be true! Where do I sign up?

Zona 1 year ago

↳ replying to Royal

D) in a product with a guaranteed cash value.

Markus 1 year ago

↳ replying to Royal

C) at the previous day's close price for the contract.

Reiko 2 years ago

↳ replying to Royal

B) at the next price that is computed after the contract application is accepted by the insurance company.

Beatriz 2 years ago

↳ replying to Royal

A) at the most recent price for which the contract sold.

Tatum 2 years ago

B) seems like the correct answer. The client's money should be invested at the next price computed after the contract is accepted, not the most recent or previous day's price.

Zoila 2 years ago

I agree, transparency is key in financial transactions to build trust with clients.

Luis 2 years ago

I think it's important for clients to know when their money will be invested to make informed decisions.

Bettyann 2 years ago

B) at the next price that is computed after the contract application is accepted by the insurance company.

Finra Series-6 Exam - Topic 5 Question 85 Discussion