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FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. On which of the following items do mutual fund shareholders get to vote?
I. any change in the investment objective of the fund
II. the election of a new investment adviser
III. the renewal of the fund's 12b-1 fee
IV. the purchase or sale of real estate by the fund
A) I, II, and IV only
B) I, II, III, and IV
C) I, III, and IV only
D) I, II, and III only
2. Yvette is a recently-widowed 63-year-old. The couple had no children, and when her husband died, she
was the beneficiary of his $45,000 life insurance policy. She also receives benefits from his retirement
plan and social security, but this income falls about $300 short of covering her regular monthly expenses,
which includes a sizeable amount for health insurance. In the months since her husband's death, she sold
their larger home and purchased a condominium, netting $80,000 from the combined transactions. Yvette
was a homemaker all her life, and her husband handled all their finances, so Yvette is just learning how to
balance her checkbook. One thing she does know is that she is going to have to purchase a new car
within the next few months. Yvette is in good health and expects to live at least another 25 years. Which
of the following types of investments should be included in recommending an asset allocation to Yvette?
A) money market fund
B) municipal bond fund
C) life insurance policy
D) aggressive growth stock fund
3. Joan is a customer of GetErDone Broker-Dealers. Her twin sister, Jean, has accompanied her to
GetErDone's office and has gathered some information regarding opening an account with the firm, giving
it her contact information at the same time. Under Regulation S-P, which of the following statements
regarding GetErDone's handling of Joan's and Jean's personal information is true?
A) All of the above are true statements.
B) GetErDone can disclose any information that Jean provided them to nonaffiliated third parties since
Jean is not a customer of the broker-dealer.
C) GetErDone must provide Joan with a notification of its privacy policies annually and provide her with
information on how to mandate that it not share her nonpublic personal information with nonaffiliated third
parties.
D) GetErDone is required to have provided Jean with a copy of its privacy policy when she inquired about
opening an account with the broker-dealer.
4. Mr. R. Retired recently turned 61 and has decided to annuitize a variable annuity contract in which he had
been investing. When he does so:
A) he will have to pay a 10% penalty for annuitizing the contract before he turned 62 1/2 .
B) his accumulation units will be converted into a fixed number of annuity units.
C) Both B and C are true statements.
D) the value of his annuity units becomes fixed.
5. Mr. Schaker hasn't been seeing a lot of clients these days with the recent market downturn-which means
he hasn't been generating any commissions, and commissions are his bread and butter. So, Mr. Schaker
does some Googling on his computer and notes that a prominent family of load funds has just introduced
a new global fund. Scribbling the name and contact information of the fund family on his notepad, he
begins calling his existing clients and promoting the new fund, encouraging his clients to redeem some
shares in their existing funds to invest in this fund. Has Mr. Schaker violated any securities laws?
A) No. Research indicates that new funds tend to offer abnormally high returns for the first 12 months of
their existence, so Mr. Schaker is doing his clients a favor even if he himself stands to profit.
B) No. In FINRA's rules regarding fair dealing with customers, the SRO clearly states that "This does not
mean that legitimate sales efforts in the securities business are to be discouraged. . . "
C) Yes. A registered representative should always refrain from recommending shares of a load fund;
trades involving load funds should always be "unsolicited."
D) Yes. Mr. Schaker is recommending the fund to his existing clients to benefit himself, not them.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: A | Question # 3 Answer: C | Question # 4 Answer: B | Question # 5 Answer: D |



