Finra Exam Series-6 Topic 10 Question 70 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 70
Topic #: 10

Which of the following statements regarding the required distribution of income by a regulated investment company are true?

ABoth short-term and long-term capital gains earned by the company can be distributed only once a year.

BUnder current tax laws, qualifying dividends distributed to the company's investors are taxable to those investors at a preferential rate-i.e., either 0% or 15%, depending on the investor's marginal tax rate.

CIf an investor in the investment company has elected to reinvest his dividend and capital income in the company rather than receiving a check, then the investor is not required to pay taxes on the reinvested funds.

DBoth A and B are true statements.

Show Suggested Answer

Suggested Answer: B

Mr. Nomad's friend can engage in the activities described in Selections I and II only. A limited power of attorney gives Mr. Nomad's friend the authority to buy and sell securities on Mr. Nomad's behalf, but not to make any cash withdrawals. He would need a full power of attorney to be able to do so.

by Quentin at Jan 26, 2024, 09:58 AM

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