Series 6 Accounts and Customer Profile Practice Questions

Correct answer: C. Buying securities on margin against the account's holdings

Custodial accounts must be cash accounts. The custodian may buy, sell and reinvest within the prudent-investor standard, but may not borrow on margin or commit the minor to speculative strategies such as uncovered options.

• AA. Wrong: buying mutual funds is a typical, permitted use of a UTMA account.
• BB. Wrong: reinvestment is permitted and is ordinary practice.
• CC. Correct: margin borrowing is not allowed in a custodial account.
• DD. Wrong: the custodian may sell and rebalance, subject to acting prudently for the minor.

• Source: Exam outline: FINRA Series 6 Content Outline, accessed October 2026

Correct answer: D. The beneficiary has no rights to the account while the owner is alive, and the assets never pass through probate.

A TOD beneficiary has no ownership, signature or trading rights during the owner's lifetime. At death the assets pass directly to the named beneficiary, avoiding probate, and the owner may change the beneficiary at any time.

• AA. Wrong: a TOD beneficiary holds only a future interest that arises at the owner's death. The beneficiary is not a co-owner and has no trading authority while the owner is alive.
• BB. Wrong: a valid TOD registration overrides the will for that account, so the assets go to the named beneficiary and the executor does not distribute them under the will.
• CC. Wrong: the owner keeps full control of withdrawals and investment decisions during life. The beneficiary has no signature or approval rights until the owner dies.
• DD. Correct: the owner keeps full control during life and the beneficiary has no present rights. At death the assets transfer directly to the beneficiary outside the probate process, which is the defining feature of TOD registration. Some states let estate creditors reach such assets if the probate estate is insufficient, but this does not change the basic rule that TOD assets pass outside probate.

• Source: Exam outline: FINRA Series 6 Content Outline, accessed October 2026

Correct answer: B. Roth contributions are after-tax, and the original owner takes no lifetime required minimum distributions.

Roth IRA contributions are not deductible, and qualified distributions are tax-free. The original Roth owner has no lifetime required minimum distributions, unlike a traditional IRA owner.

• AA. Wrong: this reverses the tax treatment; it describes a traditional IRA.
• BB. Correct: after-tax contributions and no lifetime RMDs for the original owner are Roth features.
• CC. Wrong: earnings in both IRA types grow tax-deferred inside the account.
• DD. Wrong: the original owner of a Roth IRA is not subject to lifetime RMDs.

• Source: 26 U.S.C. § 408A, accessed October 2026

Correct answer: D. Within seven business days after the application is received at the office responsible for supervision

The variable annuity rule requires principal review of a deferred variable annuity application, and a decision whether to approve, within seven business days after the member's supervisory office receives a complete application package.

• AA. Wrong: the rule does not require principal review within two business days of signing. The clock under FINRA Rule 2330 starts when the application is received at the office of supervisory jurisdiction, not when the customer signs, and the period is seven business days.
• BB. Wrong: this uses the correct trigger (receipt at the supervising office) but the wrong length. Rule 2330 allows seven business days, not ten, for the principal to approve or reject the application.
• CC. Wrong: the period is not measured from the customer's signature and is not five business days. Rule 2330 measures seven business days from receipt of the application at the office of supervisory jurisdiction.
• DD. Correct: seven business days from receipt of the application.

• Source: FINRA Rule 2330, accessed October 2026