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FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. A fund's transfer agent is responsible for:
I. calculating and distributing the capital gain and dividend income of the fund.
II. mailing shareholder account statements.
III. paying fund expenses.
A) I, II, and III
B) I and II only
C) I only
D) II only
2. Jack purchased a new bond of the Candlestick Corporation for its face value of $1,000.The bond has a
coupon rate of 3.5%, makes semiannual interest payments, and matures in fifteen years. A year after
purchasing the bond, Jack needs to sell the bond to offset some major expenses he incurred when his
home caught on fire. Interest rates in the economy at this time have fallen to 3.0%.Given this scenario,
when Jack sells the bond, he can expect to receive which of the following?
A) exactly what he paid for the bond.
B) $965, which is what he paid for the bond less the $35 in interest he received during his year of owning
the bond.
C) more than what he originally paid for the bond.
D) less than what he originally paid for the bond.
3. HiTop Investments main office is located in the state of Colorado. A registered representative of the firm
sent out an e-mail to his clients, some of whom reside in other states, promoting the firm's Colorado
Municipal Bond Fund, which invests exclusively in bonds offered by the state and local governments of
Colorado. In the e-mail, the representative states, "These bonds provide income that is free from both
federal and state taxes and may also be free from local taxation, if any exists." Is this e-mail in violation of
any securities' laws?
A) No. Since the fund invests exclusively in bonds offered by the state and local governments of Colorado,
the representative's statement contains no misstatement of fact.
B) Yes. Advertisements referring to a specific fund may not be distributed by electronic means.
C) Yes. A fund that invests only in bonds offered by state and local governments of one state may not be
sold to investors who reside in other states.
D) Yes. The representative's statement that the "bonds provide income that is free from both federal and
state taxes and may also be free from local taxation, if any exists," is untrue.
4. Which of the following share classes do not have front-end loads?
A) Class C
B) Neither Class B nor Class C shares have front-end loads.
C) Class A
D) Class B
5. In 2004, your Uncle Oscar purchased 300 shares of Hasbro, Inc. for $19 a share. Uncle Oscar died earlier
year and left his Hasbro stock to you. The stock was selling for $44 on the day he died, but by the time
you learned that you were the beneficiary of the stock, the price was $47. What is your cost basis in
Hasbro?
A) $19
B) $44
C) $28
D) $47
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: C | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: B |
By Zara
