Practice Quiz

FINRA Series 6

Category - Series 6

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The American Funds family of funds offers numerous funds to investors. Among these are a U.S. government bond fund, a high-yield corporate bond fund, a diversified emerging markets fund, and a large stock growth fund. Of these four, the one that would expose the investor to the most social and political risk is its:
  1. U.S. government bond fund.
  2. diversified emerging markets fund.
  3. large stock growth fund.
  4. high-yield corporate bond fund.
Explanation
Answer: B - An investor will be most exposed to social and political risk in American’s diversified emerging markets fund. This fund invests, by definition, in securities offered by firms located in developing countries, whose economies are in transition. Often, the political and social environment of these countries is very unstable.
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