2023 Updates For the Latest Series-7 Free Exam Study Guide!
Best Series-7 Exam Preparation Material with New Dumps Questions
NEW QUESTION 222
Revenue bonds are least likely to provide constructions funds for:
- A. a public school
- B. an airport
- C. a toll highway
- D. a pollution control facility
Answer: A
Explanation:
Explanation/Reference:
Explanation: a public school. Schools are typically financed by general obligation bonds. The other choices are examples of revenue bonds.
NEW QUESTION 223
Which of the following sources provides news of prospective municipal securities sales to underwriters?
- A. the SEC News Digest
- B. The Wall Street Journal
- C. the daily Bond Buyer
- D. the Blue List
Answer: C
Explanation:
Explanation/Reference:
Explanation: the daily Bond Buyer. News is covered in the daily Bond Buyer as well as Munifacts, which is operated by the daily Bond Buyer. The Blue List shows only current offerings, not prospective ones.
NEW QUESTION 224
A treasury obligation having no fixed rate of interest with a thirty-day maturity due April 22 is most likely a:
- A. treasury note
- B. Series H bond
- C. Series EE bond
- D. tax anticipation bill
Answer: D
Explanation:
tax anticipation bill. These obligations pay no interest and their maturity comes after corporate tax payment dates. They are accepted for redemption at face value prior to maturity on corporate tax payment dates to encourage purchase by corporations.
NEW QUESTION 225
Hypothecation usually refers to which of the following?
- A. pledging securities as collateral
- B. none of the above
- C. forecasting the market based upon past performance
- D. determining a reasonable offering price for a new issue
Answer: A
Explanation:
Explanation/Reference:
Explanation: pledging securities as collateral. To hypothecate securities is to pledge them.
NEW QUESTION 226
A 5% markup policy applies to:
- A. registered secondaries
- B. mutual funds
- C. primary distributions
- D. riskless transactions
Answer: D
Explanation:
riskless transactions. The markup policy applies to everything except securities sold under a prospectus, which is the case with the other choices.
NEW QUESTION 227
Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
Bubba wants to buy 100 shares of DUM at $30 per share and 100 shares of OUT at $120. How much additional money must be deposited?
- A. $1,500
- B. $6,000
- C. $7,000
- D. $4,500
Answer: D
Explanation:
$4,500. The purchase of DUM will cost $3,000 (100 x $30) and the purchase of OUT will cost $12,000 (100 x $120). Both combined total a cost of $15,000. Reg T requires 50% ($7,500) and Bubba only has $3,000. So he is $4,500 short.
NEW QUESTION 228
Which of the following is identified as a funded debt instrument?
- A. Series EE savings bond
- B. Fannie Mae bond
- C. US treasury bond
- D. corporate bond
Answer: D
Explanation:
Explanation/Reference:
Explanation: corporate bond. All of the other securities are issues backed by the US government, which are not considered funded debt.
NEW QUESTION 229
Mutual fund salespersons may not represent that a product is like of safer than:
- A. a corporate debt instrument
- B. a fixed annuity
- C. an insurance policy
- D. all of the above
Answer: D
Explanation:
all of the above. A broker/dealer must demonstrate that what is said or printed about a product is not fraudulent. Representing a mutual fund as safer than any of the choices above is likely fraudulent.
NEW QUESTION 230
Bubba sells 100 shares of XYZ short at $58 and buys 1 XYZ Mar 60 Call at $3.
What is the customer's maximum loss?
- A. $100
- B. $5,500
- C. unlimited
- D. $500
Answer: D
Explanation:
$500. Bubba sold short at $58. The call with a strike price of 60, gives him the right to buy back the stock at $60. If the stock rises, the call can be used to limit the loss to 2 points. Bubba can lose $200 on the stock. Bubba also paid a $300 premium. Loss potential is $500.
NEW QUESTION 231
Bubba has several accounts at a brokerage firm. Which of the following is not covered by SIPC?
- A. commodities account in Bubba's name only
- B. joint account of Bubba and his son, Bubba, Jr.
- C. individual account in Bubba's name only
- D. joint account of Bubba and his wife
Answer: A
Explanation:
Explanation/Reference:
Explanation: commodities account in Bubba's name only. SIPC does not cover commodities accounts.
NEW QUESTION 232
Which of the following options positions is characteristic of a short straddle?
- A. long one call and short one put
- B. long one put and short one call
- C. long one put and short one call
- D. long one call and long one put
Answer: C
Explanation:
Explanation/Reference:
Explanation: long one put and short one call. This is a short straddle. A position that is long one put and long one call is a long straddle.
NEW QUESTION 233
Which of the following statements is not true about a letter of intent?
- A. a certain portion of shares purchased are held in escrow until the terms of the letter are met
- B. a shareholder may not redeem any shares for 13 months
- C. the letter of intent has a maximum duration of 13 months
- D. a letter of intent may be backdated by 90 days
Answer: B
Explanation:
Explanation/Reference:
Explanation: a shareholder may not redeem any shares for 13 months. Redemptions are permissible at any time. However, since escrowed shares are set aside to cover the difference in sales loads based on terms of the letter, redemptions prior to 13 months may liquidate the escrow account and thus return to the investor 100% of net asset value.
NEW QUESTION 234
Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85 . What is the nominal yield?
- A. 5.00%
- B. cannot be determined
- C. 5.88%
- D. 5.1%
Answer: A
Explanation:
Explanation/Reference:
Explanation: 5.00%. The nominal yield is the coupon rate on the bond.
NEW QUESTION 235
A registered representative privately assures a customer that a certain stock will double within 18 months.
During this period the stock the stock performs as predicted.
Which of the following statements is true?
- A. this is a violation because the SEC requires all information about stock prices to be publicly announced
- B. this statement constituted a form of fraud prohibited under the Securities Exchange Act of 1934
- C. the commentary was permissible because the stock advanced as the registered representative forecast
- D. the comment is permissible only if the representative had been registered with the SEC under the Investment Advisors Act of 1940
Answer: B
Explanation:
Explanation/Reference:
Explanation: this statement constituted a form of fraud prohibited under the Securities Exchange Act of
1934. Such statements are fraudulent when rendered even if future events result in their accuracy.
NEW QUESTION 236
Upon opening a new account for a customer, a registered representative should:
- A. investigate the customer's credit rating
- B. all of the above
- C. inquire about age
- D. determine what is suitable for the customer based upon his financial background
Answer: B
Explanation:
all of the above. These are required I Rule 405 of the NYSE and under suitability requirements in the Rules of Fair Practice of the FINRA.
NEW QUESTION 237
Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.
What is the equity in Bubba's account?
- A. $500
- B. $20,500
- C. $20,000
- D. $37,000
Answer: C
Explanation:
$20,000. The equity in a short margin account is equal to the credit balance minus the short market value. SMA is not considered when computing equity.
NEW QUESTION 238
The net investment income of an open-end investment company represents:
- A. net gains on sales of portfolio securities
- B. dividends, interest, and net gains on sales of securities
- C. net profits from the investment company operation
- D. net income from dividends and interest paid on securities in the fund's portfolio
Answer: D
Explanation:
Explanation/Reference:
Explanation: net income from dividends and interest paid on securities in the fund's portfolio. Net investment income is dividends and interest but not capital gains.
NEW QUESTION 239
Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions. At what must XYZ trade for Bubba to break even?
- A. $55
- B. $60
- C. $57
- D. $54
Answer: D
Explanation:
Explanation/Reference:
Explanation: $54. Bubba's position is a bullish spread. The breakeven is determined by adding the debit amount to the lower strike price. The debit amount is $4 ($7 - $3). Adding that to $50 equals $54.
NEW QUESTION 240
In which of the following situations may exemption from compliance with Regulation T be granted?
- A. a broker/dealer transacting less than 10% of its business through a member of a securities exchange
- B. a broker/dealer conducts business only in registered securities
- C. a broker/dealer who does not offer margin accounts
- D. none of the above
Answer: D
Explanation:
Explanation/Reference:
Explanation: none of the above. No broker/dealer is exempt. Reg T covers cash accounts as well as margin accounts.
NEW QUESTION 241
A mutual fund with an 8% load and a 1% redemption fee carries a current quote of $6.25 - $6.79. If an investor has tendered his shares for redemption on that basis, the per share price he will receive is approximately:
- A. $6.79
- B. $6.19
- C. $6.25
- D. $6.72
Answer: B
Explanation:
Explanation/Reference:
Explanation: $6.19. The fund has a redemption fee of 1%. This is about 6 cents based upon the bid price.
Subtracting that from the $6.25 bid results in $6.19.
NEW QUESTION 242
Which of the following oil and gas programs does not directly involve drilling?
- A. balanced
- B. developmental
- C. income
- D. exploratory
Answer: C
Explanation:
income. With an income program, the well is already producing. The risk is associated with the commodity price.
NEW QUESTION 243
In terms of depletion, percentage depletion is better than cost depletion because it:
- A. is not subject to recapture
- B. is more widely available
- C. permits recovery of more than the original cost
- D. is limited to production
Answer: C
Explanation:
permits recovery of more than the original cost. Percentage depletion is only available for small producing wells.
NEW QUESTION 244
Under a leaseback arrangement used to finance construction of local schools, who is the issuer of the municipal bonds?
- A. the state in which the schools are located
- B. a public housing authority commissioned by the federal government
- C. the local school district
- D. a legal authority created for this purpose
Answer: D
Explanation:
Explanation/Reference:
Explanation: a legal authority created for this purpose. Bonds with a leaseback arrangement are issued by a specially created entity.
NEW QUESTION 245
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How to Prepare For FINRA Series 7 Certification Exam
Preparation Guide for FINRA Series 7 Certification Exam
FINRA Series 7 Certification: Tips to survive if you don't have time to read all the page
The 7 Series review authorizes the holder to sell all types of products in securities, with the exception of commodities and futures. Officially known as the General Qualifying Examination for Securities Representatives, the Series 7 exam and its accreditation are managed by the Financial Sector Regulatory Authority (FINRA).
In the United States, stockbrokers must pass the Series 7 exam to obtain a commercial license. The 7 Series review focuses on investment risk, taxation, securities, and debt securities; securities, options, pension plans, and customer interactions.
In 2019, FINRA launched a distribution on 1 October 2018. of potential securities professionals. This introductory exam assesses a candidate's knowledge of basic information in the securities sector, including basic concepts for working in the sector
The purpose of the Series 7 license is to define a level of competence for a registered representative or securities dealer working in the securities sector. The 7 Series license is an essential requirement for a novice broker. The licensing exam covers a wide range of financial conditions and matters as well as the regulation of securities.
Candidates who pass the Series 7 exam can negotiate many securities, such as shares, mutual funds, options, municipal securities and variable contracts. The Series 7 license does not cover the sale of real estate or life insurance products. In addition to obtaining the Series 7 license, many states require registered representatives to take the Series 63 exam, also known as the state uniform agent law exam.
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