A rep proposes that a client replace her variable annuity, now in year 2 of an 8-year surrender schedule, with a new annuity from another insurer whose surrender period restarts. What is the most important consideration?

Whether the new contract's benefits justify new surrender charges, lost benefits, added fees and tax effects

Which of the following is generally classified as a leading economic indicator?

Building permits issued for new housing units

Under the Investment Company Act of 1940, which type of investment company issues certificates promising a stated sum at maturity in exchange for installment payments?

Face-amount certificate company

Series 6 Investment Information and Recommendations Practice Questions

Official outline: FINRA Series 6 Content Outline
Questions on this page: 4
Updated: Nov 3, 2026

Question 1, hard
Priya purchased fund shares on March 10, 2025. What is the earliest sale date that would qualify for long-term holding period treatment?
- A.March 11, 2026
- B.March 10, 2026
- C.September 10, 2025
- D.March 10, 2027
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Correct answer: A. March 11, 2026
The holding period begins the day after purchase, and long-term treatment requires holding more than one year. A sale on March 11, 2026 is the first day that qualifies; March 10, 2026 is exactly one year.
- A. Right: more than one year, starting the day after purchase.
- B. Wrong: this is exactly one year, not more than one year.
- C. Wrong: six months is only a short-term holding period.
- D. Wrong: two years is longer than needed.
- Source: 26 U.S.C. § 1222, accessed October 2026
Question 2, hard
A rep proposes that a client replace her variable annuity, now in year 2 of an 8-year surrender schedule, with a new annuity from another insurer whose surrender period restarts. What is the most important consideration?
- A.Only whether the new insurer has a higher claims-paying rating than the current insurer, as reported by the rating agencies
- B.Whether the new contract's benefits justify new surrender charges, lost benefits, added fees and tax effects
- C.Whether the exchange qualifies under Section 1035, which by itself makes it suitable for the client
- D.Whether the exchange will pay the rep a higher commission than keeping the current annuity, which the client should know
Show answer and explanationHide answer
Correct answer: B. Whether the new contract's benefits justify new surrender charges, lost benefits, added fees and tax effects
Variable annuity exchanges require a reasoned review of costs and benefits, including surrender charges, a new surrender period, loss of benefits and fees. A tax-free exchange can still be unsuitable.
- A. Wrong: insurer rating matters, but it is only one of many factors.
- B. Right: the rep must weigh the full cost-benefit picture for the client.
- C. Wrong: tax-free status does not establish suitability.
- D. Wrong: compensation to the rep is a conflict, not a consideration in favor of the exchange.
- Source: FINRA Rule 2330, accessed October 2026
Question 3, easy
Which of the following is generally classified as a leading economic indicator?
- A.The national unemployment rate reported monthly
- B.Building permits issued for new housing units
- C.The Consumer Price Index
- D.The prime lending rate charged by commercial banks
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Correct answer: B. Building permits issued for new housing units
Leading indicators change before the economy turns, and building permits are a standard example. Unemployment, the CPI and the prime rate are lagging indicators that confirm trends after they develop.
- A. Wrong: unemployment usually peaks or bottoms after the economy has turned.
- B. Right: permits are issued before construction and so tend to turn ahead of the economy.
- C. Wrong: consumer prices are a lagging measure of inflation.
- D. Wrong: the prime rate follows moves in policy rates rather than leading them.
- Source: Exam outline: FINRA Series 6 Content Outline, accessed October 2026
Question 4, medium
Under the Investment Company Act of 1940, which type of investment company issues certificates promising a stated sum at maturity in exchange for installment payments?
- A.Unit investment trust
- B.Face-amount certificate company
- C.Closed-end management company
- D.Open-end management company
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Correct answer: B. Face-amount certificate company
The 1940 Act recognizes three classes: management companies (open-end and closed-end), unit investment trusts and face-amount certificate companies. Face-amount companies issue certificates payable at a stated amount at maturity.
- A. Wrong: a UIT issues redeemable units in a fixed portfolio.
- B. Right: these certificates promise a fixed face amount.
- C. Wrong: a closed-end fund issues a fixed number of shares that trade in the market.
- D. Wrong: an open-end fund issues redeemable shares continuously.
- Source: 15 U.S.C. § 80a-4, accessed October 2026
- Source: 15 U.S.C. § 80a-2, accessed October 2026

Sources

26 U.S.C. § 1222, checked October 2026
FINRA Rule 2330, checked October 2026
15 U.S.C. § 80a-4, checked October 2026
15 U.S.C. § 80a-2, checked October 2026

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Series 6 Investment Information and Recommendations Practice Questions

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