Finra Exam Series-6 Topic 7 Question 51 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 51
Topic #: 7

[All Series-6 Questions]

The board of directors of a mutual fund is responsible for:

i. authorizing purchases and sales of securities made by the fund.

ii. approving the fund's contract with its investment adviser.

iii. ensuring that the fund complies with federal securities laws regarding such issues as 12b -1 fees.

IV. establishing the fund's dividend and capital gains policy.

AI and IV only

BI, II, and IV only

CII, III, and IV only

DI, II, III, and IV

Show Suggested Answer

Suggested Answer: B

The true statement is that reinvested dividends and capital gain distributions count toward reaching a breakpoint under the rights of accumulation. The rights of accumulation are not something that all mutual funds with front-end loads must offer. There is no time limit on the accumulation period. The rights of accumulation and the letter of intent are two separate animals; neither has anything to do with the other.

by Jennifer at Nov 15, 2022, 07:58 AM

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Basilia

2 months ago

The board of directors? More like the board of 'I've had enough of this mutual fund nonsense!' Amirite? But seriously, D is the way to go. Gotta keep those fund managers on a tight leash.

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Samira

1 months ago

Definitely, the board of directors plays a crucial role in overseeing the fund's operations.

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Jess

2 months ago

Yeah, D seems like the most comprehensive option. They have a lot on their plate.

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Tambra

2 months ago

I agree, D covers all the important responsibilities of the board of directors.

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Alline

3 months ago

Hmm, D is the way to go. The board has to keep their hands in everything from trades to fees to dividends. Keeping those mutual fund managers in check, am I right?

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Cyndy

2 months ago

It's crucial for the board to have oversight on all aspects of the mutual fund to protect investors.

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Johnna

2 months ago

Definitely, they have a lot on their plate to ensure the fund is managed properly.

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Kristofer

2 months ago

I agree, D covers all the important responsibilities of the board of directors.

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Christoper

3 months ago

I was leaning towards B, but after re-reading the question, D does appear to be the correct choice. Gotta love those comprehensive board duties!

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Lucy

3 months ago

Yeah, D seems like the most comprehensive answer. The board has to oversee all the major aspects of the fund's operations.

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Eric

3 months ago

The board's responsibilities include authorizing securities transactions, approving the investment advisor contract, and ensuring compliance with regulations. I think option D covers all the key responsibilities.

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