Series 6: Investment Company and Variable Contracts Products Representative Qualification Examination (IR) Fund Practice Questions

Your client wishes to invest in a mutual fund that aims for capital appreciation. Which type of fund should they consider?

• AA. Balanced fund
• BB. Equity fund
• CC. Money market fund
• DD. Fixed-income fund

A prospectus states "This fund primarily invests in REITs". What type of investment is it?

• AA. Equity fund
• BB. Income fund
• CC. Real Estate Investment Trust
• DD. Alternative investment

What does a high expense ratio in a mutual fund indicate?

• AA. Poor management
• BB. High returns
• CC. Low risk
• DD. High costs

If a mutual fund has a front-end load, what does that mean for investors?

• AA. Fees deducted annually
• BB. Fees deducted up front
• CC. No fees when investing
• DD. Performance fee charged

A client invested in a target-date fund. What is the primary investment strategy of this type of fund?

• AA. High-intensity trading
• BB. Gradual risk reduction
• CC. Investing in commodities
• DD. Static asset allocation

If an investor sells shares of a mutual fund, when is the net asset value determined?

• AA. The next market session
• BB. At the end of the day
• CC. Immediately upon sale
• DD. At the start of the day