Finra Series-6 Exam - Topic 5 Question 85 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 85
Topic #: 5

[All Series-6 Questions]

: 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.

Show Suggested Answer

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%.

by Lauran at Aug 25, 2024, 09:32 PM

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Tesha

4 months ago

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

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Frederica

4 months ago

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

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Stephane

4 months ago

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

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Gayla

5 months ago

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

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Myra

5 months ago

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

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Kristal

5 months ago

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

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Mollie

5 months ago

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

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Raymon

5 months ago

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

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Marylin

5 months ago

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

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Beula

5 months 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.

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Francesco

5 months 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.

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Janae

6 months 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.

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Linwood

6 months 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.

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Becky

6 months 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.

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Leanora

6 months 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.

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Pearlie

10 months 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.

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Yolando

9 months ago

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

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Nieves

9 months ago

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

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Shonda

9 months ago

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

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Sang

11 months ago

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

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Frankie

10 months ago

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

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Eric

10 months ago

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

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Adelina

10 months ago

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

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Rene

11 months ago

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

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Royal

11 months ago

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

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Zona

10 months ago

D) in a product with a guaranteed cash value.

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Markus

10 months ago

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

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Reiko

11 months ago

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

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Beatriz

11 months ago

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

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Tatum

11 months 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.

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