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FINRA Series 6 Investment Company and Variable Contracts Products Representative Exam

2. Opens accounts / Suitability and best interest: practice questions

Our FINRA Series 6 bank has 18 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

Which is one of the four component obligations of Regulation Best Interest?

  1. The margin obligation
  2. The care obligation
  3. The underwriting obligation
  4. The net capital obligation
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B. The care obligation — Reg BI is satisfied by the disclosure, care, conflict of interest and compliance obligations (Rule 15l-1(a)(2)).

Question 2

Form CRS must be delivered to a new retail investor before or at the earliest of:

  1. The first quarterly statement
  2. A recommendation, an order or account opening
  3. The first trade confirmation
  4. The end of the first year
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B. A recommendation, an order or account opening — SEA Rule 17a-14(c)(1): deliver at or before the earliest of a recommendation, placing an order, or opening a brokerage account.

Question 3

When does Rule 2111 not apply to a recommendation?

  1. When Regulation Best Interest applies
  2. When the customer is under 30
  3. When the product is a mutual fund
  4. When the representative is a Series 6
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A. When Regulation Best Interest applies — Rule 2111.08: the rule does not apply to recommendations subject to SEA Rule 15l-1 (Regulation Best Interest).

Question 4

Under Regulation Best Interest, who is a "retail customer"?

  1. Any corporation with fewer than 50 employees
  2. A natural person using it for personal purposes
  3. Any pension plan
  4. Only customers with less than $1 million
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B. A natural person using it for personal purposes — Rule 15l-1(b)(1): a natural person or legal representative who receives a recommendation and uses it primarily for personal, family or household purposes.

Question 5

Which suitability obligation requires a representative to understand a product well enough to know it is suitable for at least some investors?

  1. Reasonable-basis suitability
  2. Customer-specific suitability
  3. Quantitative suitability
  4. Institutional suitability
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A. Reasonable-basis suitability — Rule 2111.05(a): reasonable-basis suitability requires a reasonable basis to believe the recommendation is suitable for at least some investors.

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