SERIES 6 - STC GREENLIGHT EXAM 2025 WITH 100%
CORRECT ANSWERS
1. An investor asks a registered representative to underline the most important
facts found in a preliminary prospectus. The registered representative
A) May not do this since it violates federal securities laws
B) May do this with the approval of a principal at the firm
C) May do this with the approval of FINRA
D) May do this without restrictions or approvals
Answer >> A) May not do this since it violates federal securities laws
Once a prospectus is filed with the SEC, it may not be amended in any way.
2. Listed below are the net asset value and offer prices of two investment
companies
Net Asset Value
,Fund A - $9.20
Fund B - $12.50
Offer Price
Fund A - $10.00
Fund B- $12.00
Based upon the information shown above, you can determine that
A) Both funds are open-end
B) Both funds are closed-end
C) A is closed-end and B is open-end
D) B is definitely closed-end and A is probably open-end
Answer >> D) B is definitely closed-end and A is probably open-end
When the net asset value is higher than the ottering price, the fund definitely is closed-end. Closed-end funds have a
price determined by supply and demand, and their prices may be more or less than the net asset value per share, while
open-end funds are prohibited from ever selling their shares for less than the net asset value. Thus Fund B, which has an
ottering price less than its net asset value, must be a closed-end fund, while Fund A could be either.
3. Cash dividends declared by a corporation
A) Must be approved for payment by the shareholders
,B) Must be approved for payment by the board of directors
C) Are taxed as capital gains
D) Are not taxed Answer >> B) Must be approved for payment by the board of directors
Cash dividends declared by a corporation must be approved by the corporation's board of directors. Shareholder
approval is not needed to declare a cash dividend, although a company must obtain shareholder approval for a stock
split.
Any cash dividends paid to shareholders are taxed as ordinary income in the year received, not capital gains.
4. A customer calls to lodge a complaint against a registered representative (RR).
The customer should be advised to Answer >>
A) Call FINRA
B) Call the RR
C) Call the appropriate principal
D) Put the complaint in writing Answer >> D) Put the complaint in writing
In order to be oflcially considered a complaint, the complaint should be put in writing. This mandates an appropriate
response from the member firm.
5. A Regulation D offering may be sold to a maximum of Answer >>
A) 15 nonaccredited investors
B) 15 accredited investors
C) 35 nonaccredited investors
D) 35 accredited investors Answer >> C) 35 nonaccredited investors
, A Regulation D (private placement) ottering may be sold to a maximum of 35 nonaccredited investors. There is no limit on
the number of accredited investors. An individual will be considered an accredited investor if he has a net worth
of $1,000,000 or has had $200,000 ($300,000 for a married couple) of income for the previous two years with an
anticipation of continued earnings at the same or a greater level.
6. A fee-based account is most suitable for customers who Answer >>
A) Have discretionary accounts
B) Utilize a buy-and-hold strategy
CORRECT ANSWERS
1. An investor asks a registered representative to underline the most important
facts found in a preliminary prospectus. The registered representative
A) May not do this since it violates federal securities laws
B) May do this with the approval of a principal at the firm
C) May do this with the approval of FINRA
D) May do this without restrictions or approvals
Answer >> A) May not do this since it violates federal securities laws
Once a prospectus is filed with the SEC, it may not be amended in any way.
2. Listed below are the net asset value and offer prices of two investment
companies
Net Asset Value
,Fund A - $9.20
Fund B - $12.50
Offer Price
Fund A - $10.00
Fund B- $12.00
Based upon the information shown above, you can determine that
A) Both funds are open-end
B) Both funds are closed-end
C) A is closed-end and B is open-end
D) B is definitely closed-end and A is probably open-end
Answer >> D) B is definitely closed-end and A is probably open-end
When the net asset value is higher than the ottering price, the fund definitely is closed-end. Closed-end funds have a
price determined by supply and demand, and their prices may be more or less than the net asset value per share, while
open-end funds are prohibited from ever selling their shares for less than the net asset value. Thus Fund B, which has an
ottering price less than its net asset value, must be a closed-end fund, while Fund A could be either.
3. Cash dividends declared by a corporation
A) Must be approved for payment by the shareholders
,B) Must be approved for payment by the board of directors
C) Are taxed as capital gains
D) Are not taxed Answer >> B) Must be approved for payment by the board of directors
Cash dividends declared by a corporation must be approved by the corporation's board of directors. Shareholder
approval is not needed to declare a cash dividend, although a company must obtain shareholder approval for a stock
split.
Any cash dividends paid to shareholders are taxed as ordinary income in the year received, not capital gains.
4. A customer calls to lodge a complaint against a registered representative (RR).
The customer should be advised to Answer >>
A) Call FINRA
B) Call the RR
C) Call the appropriate principal
D) Put the complaint in writing Answer >> D) Put the complaint in writing
In order to be oflcially considered a complaint, the complaint should be put in writing. This mandates an appropriate
response from the member firm.
5. A Regulation D offering may be sold to a maximum of Answer >>
A) 15 nonaccredited investors
B) 15 accredited investors
C) 35 nonaccredited investors
D) 35 accredited investors Answer >> C) 35 nonaccredited investors
, A Regulation D (private placement) ottering may be sold to a maximum of 35 nonaccredited investors. There is no limit on
the number of accredited investors. An individual will be considered an accredited investor if he has a net worth
of $1,000,000 or has had $200,000 ($300,000 for a married couple) of income for the previous two years with an
anticipation of continued earnings at the same or a greater level.
6. A fee-based account is most suitable for customers who Answer >>
A) Have discretionary accounts
B) Utilize a buy-and-hold strategy
