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Exam Series 6 All Questions

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Exam Series 6 topic 1 question 257 discussion

Actual exam question from FINRA's Series 6
Question #: 257
Topic #: 1
[All Series 6 Questions]

You have a young client whose primary investment objective is to be able to retire early. Really early. Shes thinking 40. She has more than sufficient income to meet her current needs for cash.
Which of the following types of stock funds would be most suitable for her?

  • A. balanced
  • B. value
  • C. growth
  • D. All of the above. All stock funds invest in stocks, which can be expected to appreciate in value.
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Suggested Answer: C 🗳️
The most suitable stock fund for your young client who is targeting an early retirement is the growth fund. Growth funds are primarily invested in stocks that pay no dividends since growth firms reinvest their earnings to support their higher-than-average growth rates. Your client doesnt need dividend income and will have to pay taxes on any dividends she receives even if she reinvests them. Both balanced funds and value funds can be expected to pay higher dividends.
by lolojepu at April 6, 2025, 1:29 a.m.

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