Finra Exam Series-6 Topic 6 Question 67 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 67
Topic #: 6

NewWave Investments, a family of mutual funds, hires the star of a new motion picture about the workings of Wall Street to provide a testimonial as part of NewWave's new television ad campaign. The actor's financial adviser has, in fact, invested some of the actor's monies in NewWave's funds. NewWave provides the actor with a script in which the actor explains the concept of dollar cost averaging to the viewers. At the conclusion of the actor's explanation, the viewers are informed that the actor has been paid for his testimonial, that his experience may not be representative of that of other clients, and that past performance is no guarantee of future performance. Based on these facts:

ANewWave has violated no rules; it has complied with all of FINRA's disclosure requirements.

BNewWave has violated a FINRA rule stipulating that testimonial providers can receive no payment for their testimonies.

CNewWave has violated a FINRA rule that prohibits testimonials of public figures from being used advertisements.

DNewWave has violated a FINRA rule requiring that any testimonial that contains a technical aspect related to investing must be given by someone who has both the knowledge and experience to hold a valid opinion on the topic.

Show Suggested Answer

Suggested Answer: D

The false statement regarding both a UGMA and a UTMA is that the assets must be re-registered in the minor child's name when the child turns 18. The rule differs between the two types of accounts. The UGMA requires that the assets must be re-registered when the child reaches the ''age of majority,'' as defined by the state, and the definition differs among states. Under the UTMA, the transfer of the account can be delayed until the minor child has reached the age of 25.

by Arminda at Nov 27, 2023, 07:22 PM

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Tu

2 days ago

I think NewWave has violated a FINRA rule stipulating that testimonial providers can receive no payment for their testimonies.

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