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Tables of Contents for Nasd Exam Series 6 Preparation Guide
Chapter/Section Title
Page #
Page Count
Securities and Markets; Investment Risks and Policies
2
74
Investment Securities
4
27
Corporate securities
4
20
Equity securities
Debt securities
Special securities
U.S. Government securities
24
4
Marketable issues
Nonmarketable issues
State and municipal bonds
28
2
Money market instruments
30
1
Securities Markets
31
9
Exchange/auction markets
32
1
NASDAQ/NNOTC/Negotiated markets
32
2
New issues market
34
2
Market terms
36
2
Price and yield terms
38
2
Economic Factors
40
10
Price changes in the economy
41
2
Monetary policy
43
4
Fiscal policy of the federal government
47
2
International economic factors
49
1
Investment Risk Factors
50
6
Kinds of investment risk
51
2
Concept of risk/reward
53
3
Suitability Factors
56
7
Investment objectives of clients
56
1
Financial status of clients
57
4
Risk tolerance of clients
61
2
Investment Company Portfolio/Risk Characteristics
63
13
Money market
63
1
Income
64
1
Growth
64
1
Growth/Income
64
1
Aggressive growth
64
1
Bonds
65
1
Specialized
65
1
Chapter Summary
66
6
Review Quiz
72
4
Investment Companies, Taxation, and Customer Accounts
76
64
Investment Companies
78
36
Types of investment companies
78
3
Unit investment trust
Face amount certificate
Management companies: Closed-end
Management companies: Open-end
Diversified and nondiversified companies
Open-end mutual funds
81
6
General concept
Structure and operation
Cost of operation of mutual fund
Functions of underwriter (distributor)
Functions of custodian
Functions of transfer agent
Rights of shareholders
Types of fund distributions
87
1
Net investment income
Capital gains
Return of capital
Distribution alternatives
Conveniences and services provided to investors
88
4
Day-to-day investment decisions made by portfolio manager
Safekeeping of portfolio securities
Exchange privileges within families of funds
Ability to invest fixed sums in full and fractional shares
Can liquidate part of investment and keep diversification
Fund shares provide collateral for loans
Simplified recordkeeping
Ease of diversification
Ease of account inquiry
Ease of purchase and redemption of shares
Automatic reinvestment of dividends and capital gains
Systematic withdrawal plans
Check-writing services
Telephonic exchanges and services
Simplified tax information
Types of mutual funds, characteristics, investment policies
92
2
By objective
By underlying investment
Important factors in comparison of mutual funds
94
4
Basis of comparison
Performance statistics
Other factors
Sources of mutual fund performance statistics
98
1
Methods by which fund shares are purchased by the public
99
1
Prices of mutual fund shares
100
4
Net asset value (NAV) per share
Sales charges
Distribution plans, SEC Rule 12b-I
Reduced sales charges, quantity discounts
104
1
Qualifying for reduced sales charges
Rights of accumulation
Dollar cost averaging (DCA)
105
1
Redemption of mutual fund shares
106
3
Methods
Considerations
Basis of redemption price
Fund required to remit timely payment
Prospectus and statement of additional information (SAI)
109
5
Registration requirement
Purpose of prospectus
Contents
Federal Income Tax Regulations For Mutual Funds
114
6
Tax consequences of the investment company's activities
114
2
Regulated investment company
Tax treatment of capital gains distributions
Tax treatment of income distributions
Tax consequences of mutual fund investor's activities
116
4
Shareholder responsibility
Tax treatment of securities transactions
Tax basis of securities
Holding periods of securities
Wash sale rule
Customer Accounts
120
6
Open account characteristics
120
1
Required minimum investment
Dividend/capital gains election
Account documentation
121
3
Customer name and residence
Whether of legal age
Reasonable effort to obtain other information
Forms of ownership of mutual fund shares
124
2
Individual registration
Joint accounts: Joint tenants with right of survivorship
Joint accounts: Tenants in common
Trust accounts
Custodial accounts: UGMA/UTMA
Contractual Plan, Periodic Payment Plan
126
14
Characteristics
126
2
Fixed total investment
Fixed time period
Fixed payments at regular intervals
Fixed sales charges
Fixed custodial fees
Automatic reinvestment
Partial liquidation and reinstatement privileges
Lump sum purchase
Breakpoints
Prospectus requirements
128
1
Plan prospectus
Prospectus of underlying fund
Operation of contractual plan
129
3
Mutual fund underlying asset
Plan sponsor/company
Act of 1940, Section 27
Right to refund
Notice of right to refund
Right of withdrawal
Spread-load option
Chapter Summary
132
5
Review Quiz
137
3
Variable Contracts and Retirement Plans
140
30
Variable Contracts
142
15
Separate accounts
142
1
Definition
Variable annuity contracts
143
7
Comparison
Types of variable annuities
Features
Sales charge and expenses
Valuation of variable annuity contract
Tax treatment
Variable life insurance
150
7
Comparison
Features
Valuation of a variable life insurance policy
Tax treatment of variable life insurance
Retirement Plans
157
13
Individual retirement account (IRA)
157
3
Purpose
Funding
Eligibility/contribution limits
Rollover/transfer rules
Taxation
Distribution rules
Simplified employee pension (SEP) plans
Roth IRAs
Keogh/HR 10 plans
160
1
Purpose
Funding
Eligibility and employee coverage
Contribution limits
Taxation
Distribution rules
Corporate pension plans
161
3
Comparison: Defined contribution versus defined benefit
Types of defined contribution plans
Employees Retirement Income Security Act (ERISA)
164
1
Chapter Summary
165
3
Review Quiz
168
2
Securities Industry Regulations
170
48
General Industry Regulations
172
15
Securities Act of 1933
172
1
Definitions
Securities Exchange Act of 1934
173
10
Definitions
Securities and Exchange Commission (SEC)
Registered securities associations
The National Association of Securities Dealers (NASD)
Certificate of Incorporation
By-Laws
Membership and Registration Rules
Conduct Rules
Procedural Rules
Fingerprinting of securities industry personnel
Securities Investor Protection Act 1970
183
1
Purpose
Membership
Investment Advisers Act of 1940
184
1
Purpose
Definitions
Registration
Insider Trading and Securities Fraud Enforcement Act of 1988
185
2
Prohibition of misuse of material, nonpublic information
Civil penalties
Criminal penalties
Liability to contemporaneous traders
Policies and procedures to be developed by broker-dealers
Regulations Related to Marketing, Prospecting
187
7
Securities Act of 1933
188
2
Rule 134---Communications not deemed a prospectus
Rule 135A---Generic advertising
Rule 156---Investment company sales literature
Investment Company Act of 1940
190
1
Securities Exchange Act of 1934
191
1
NASD Conduct Rules
191
3
Rules Related to Sales Presentations, Materials
194
7
Securities Act of 1933
194
2
Securities Exchange Act of 1934
196
1
Manipulative and deceptive devices
Registration and regulation of brokers, dealers
Securities Investor Protection Act of 1970
197
1
NASD Conduct Rules
198
3
Use of Manipulative, Deceptive, or Fraudulent Devices
Communications with the Public
Customers' Securities or Funds
Rules Related to Transaction
201
8
Securities Exchange Act of 1934
201
1
Manipulative and deceptive devices
Accounts and records
Federal Reserve Board, Regulation T
202
1
Cash accounts
NASD Conduct Rules
203
6
Use of Manipulative, Deceptive, or Fraudulent Devices
Recommendations to Customers
Customers' Securities or Funds
Dealing with Nonmembers
Variable Contracts of an Insurance Company
Investment Company Securities
Private Securities Transactions
Transactions for or by Associated Persons
Books and Records
Prompt Receipt and Delivery of Securities
Subsequent and Ongoing Communication and Service
209
9
NASD Conduct Rules
209
1
Standards of Commercial Honor and Principles of Trade
Books and Records
NASD Procedural Rules---Code of Arbitration Procedure
210
1
Administrative provisions
Uniform Code of Procedure
Summary of NASD Prohibited Activities
211
1
Review of the NASD
211
1
Chapter Summary
212
4
Review Quiz
216
2
Series 6 Securities Practice Exam #1
218
14
Series 6 Securities Practice Exam #2
232
14
Glossary
246
40
Index
286
16
Appendix I: Answer Keys
302