FINRA Investment Company and Variable Contracts Products Representative Examination (IR) Sample Questions:
1. A long-term, unsecured bond issued by a corporation is called:
A) an industrial revenue bond.
B) a debenture.
C) commercial paper.
D) a general obligation bond.
2. On Friday, August 6th, the Board of Directors of Ecolab (ECI) announced that it would pay a dividend of
$ 0.155 a share to shareholders of record as of Tuesday, September 21st.The dividend checks were
scheduled to be mailed on Friday, October 15th. In this scenario, the payment date is:
A) Friday, August 6th.
B) none of the above.
C) Friday, September 17th.
D) Tuesday, September 21st.
3. A warrant differs from a standard call option in that:
A) when a call option is exercised, the outstanding shares of the firm whose stock is being purchased
increases; this does not occur when a warrant is exercised.
B) when a warrant is exercised, the firm whose stock is being purchased will have an increase in cash;
this is not the case when a standard call option is exercised.
C) a warrant gives the holder the right to sell shares of the underlying stock; a call option gives the holder
the right to buy shares of the underlying stock.
D) a standard call option generally has a longer period to expiration than a warrant.
4. Under the Investment Company Act of 1940, an investment company must:
A) provide a prospective investor with a copy of its registration statement when offering shares for sale.
B) include a statement of its investment policy in its prospectus.
C) have a board of directors composed of no more than 50% who are "interested persons."
D) maintain a minimum net worth of $5 million.
5. Which of the following correctly describes a difference between closed-end and open-end investment
companies?
A) Open-end investment company shares will never be offered at a price below the net asset value per
share of the fund; this is not true of closed-end companies.
B) Open-end companies may invest in non-diversified portfolios; closed-end companies are required to
invest only in diversified portfolios.
C) Shares of open-end companies sell on exchange floors; shares of closed-end companies are bought
and sold through the company itself.
D) Open-end investment companies have a fixed number of shares; closed-end companies can create
new shares if there are more buyers than sellers.
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: A |














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