Calculations and Tax Considerations

Series 6 includes calculations because packaged products still need to be explained numerically. The candidate should understand time value of money, yield, pricing, annuity valuation, and tax consequences well enough to read customer scenarios and avoid obvious mistakes. The exam usually tests practical calculation logic, not advanced mathematics.

Read this chapter as the numbers-and-tax block of the guide. It covers the basic formulas, valuation logic, and tax concepts that support product recommendations and customer disclosures.

In this section

• Time Value of Money
  Present value, future value, compounding, and the planning meaning of time value of money on the Series 6 exam.
• Yield Calculations
  Current yield, tax-equivalent logic, and the practical meaning of yield calculations relevant to Series 6 recommendations.
• Pricing of Investment Company Securities
  NAV, POP, sales-charge logic, and the basic pricing mechanics of investment company securities tested on Series 6.
• Variable Annuity Valuation
  Accumulation-unit and annuity-unit concepts, subaccount valuation, and the numerical logic behind variable annuity discussions on Series 6.
• Cost Basis and Tax Implications
  Capital gains, cost basis, tax deferral, distributions, and the customer-facing tax consequences that affect Series 6 recommendations.