Series-7 Study Guide Brilliant Series-7 Exam Dumps PDF
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FINRA Series-7 exam, also known as the General Securities Representative Qualification Examination (GS), is a crucial step for individuals seeking to become registered representatives in the securities industry. Series-7 exam is designed to test the candidate’s knowledge of the securities industry, including its regulations, financial products, and ethical practices. Passing Series-7 exam is a requirement for individuals who wish to work with securities, including stocks, bonds, mutual funds, and other investment products.
FINRA Series-7 exam is a critical step for individuals who wish to work in the securities industry. Series-7 exam is designed to test the knowledge and skills of individuals in areas such as stocks, bonds, mutual funds, options, and investment banking. Candidates must prepare thoroughly to pass the exam and must have a strong understanding of the securities industry, regulatory requirements, and ethical standards. Passing the FINRA Series-7 exam is a significant accomplishment and is a requirement for individuals who wish to sell securities products and services to the public.
FINRA Series-7 (General Securities Representative Qualification Examination) is a certification exam for professionals who want to work in the securities industry. Series-7 exam is administered by the Financial Industry Regulatory Authority (FINRA) and is recognized as the industry standard for individuals who want to become a general securities representative. Passing Series-7 exam is a requirement for individuals who want to work in the sale of all types of securities products, including stocks, bonds, mutual funds, and options.
NEW QUESTION # 219
Bubba's pledge to purchase a specified dollar amount of a mutual fund within a specified period of time is called:
- A. a letter of intent
- B. an investment letter
- C. a stock power
- D. a promissory note
Answer: A
Explanation:
Explanation/Reference:
Explanation: a letter of intent. This accurately describes the definition of a letter of intent.
NEW QUESTION # 220
What rate of return takes into consideration appreciation or depreciation in market value relating to the par value of a debt security?
- A. current yield
- B. basis yield
- C. yield to maturity
- D. nominal yield
Answer: C
Explanation:
Explanation/Reference:
Explanation: yield to maturity. The premium or discount in the security price relative to par value is considered when computing the yield to maturity.
NEW QUESTION # 221
Bubba and his wife, Bubbette, maintain a joint account with a brokerage firm as "joint tenants in common". Bubbette calls a registered representative at the brokerage and places an order to sell 100 shares of XYZ, which is long in the account.
Which of the following statements is correct about this order?
- A. it may be entered only after confirming with Bubba
- B. it must be approved by an officer of the brokerage prior to entry
- C. the order may not be accepted
- D. it may be entered
Answer: D
Explanation:
it may be entered. In a joint account any tenant is empowered to enter orders, which is specified in the account agreement.
NEW QUESTION # 222
Which of the following statements incorrectly describes US securities markets?
- A. a capital market comprised of long-term debt and equity issues
- B. a municipal market comprised of tax-exempt issues of state and local governments
- C. a money market comprised of short-term debt and equity issues
- D. a government and agency market comprised of both short-term and long-term debt issues
Answer: C
Explanation:
Explanation/Reference:
Explanation: a money market comprised of short-term debt and equity issues. This is the statement that is
"incorrect". Equity issues are not traded in the money market, which consists only of high-quality short-term debt securities.
NEW QUESTION # 223
Bubba buys one XYZ October 80 put and sells one XYZ October 70 put.
What is his position called?
- A. combination
- B. money spread
- C. calendar spread
- D. straddle
Answer: B
Explanation:
Explanation/Reference:
Explanation: money spread. Since the strike prices are different, but not the expiration date, this is a money spread (sometimes called a "price spread" or a "vertical spread").
NEW QUESTION # 224
Bubba is a registered representative who wishes to buy shares of a new issue his firm is distributing. Under FINRA Conduct Rules, Bubba may:
- A. do so if his allotment is insubstantial and not disproportionate to public orders
- B. not do so for his own account, buy may purchase shares for his sister's account
- C. not do so under any circumstance
- D. do so if he has a history of buying hot issues
Answer: C
Explanation:
not do so under any circumstance. New issues may not be distributed to Bubba or members of his immediate family.
NEW QUESTION # 225
Which of the following is not a practice of a mutual fund custodian?
- A. changing shareholder registrations on the fund's records
- B. lending the fund's securities to banks or broker/dealers
- C. maintaining sales records for the fund's underwriter
- D. disbursing dividends and capital gains to the fund's shareholders
Answer: B
Explanation:
Explanation/Reference:
Explanation: lending the fund's securities to banks or broker/dealers. This practice is not permitted under federal law.
NEW QUESTION # 226
Securities may be sold under SEC rule 144 provided that the following conditions are met:
- A. the company files regular financial data with the SEC
- B. they are sold in principal transactions only
- C. both A and B
- D. they are sold in agency transactions only
Answer: A
Explanation:
Explanation/Reference:
Explanation: the company files regular financial data with the SEC. Rule 144 transactions may use either agency or principal methods.
NEW QUESTION # 227
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. $60
- B. $55
- C. $57
- D. $54
Answer: D
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 # 228
Municipal bonds would be least attractive as an investment for which of the following?
- A. a commercial bank
- B. the executive officer of an industrial corporation in the highest income tax bracket
- C. a pension fund
- D. an insurance company
Answer: C
Explanation:
a pension fund. Since the pension fund does not pay income tax, the tax benefits of the municipal bonds are not realized.
NEW QUESTION # 229
The principal underwriter of an open-end investment company is frequently called:
- A. selling group member
- B. investment counselor
- C. sponsor
- D. participating investment advisor
Answer: C
Explanation:
sponsor. Also called the "distributor", these terms are interchangeable for an open -end investment company.
NEW QUESTION # 230
Who is responsible for verifying that limited partners meet net worth and income requirements?
- A. the limited partners
- B. the sponsor
- C. the general partner
- D. the registered representative
Answer: D
Explanation:
the registered representative. Assuring that limited partners meet net wroth and income requirements is the responsibility of the registered representative.
NEW QUESTION # 231
Which of the following rights does an ADR holder not have?
- A. preemptive rights
- B. the right to transfer ownership
- C. the right to vote for your mother-in-law as a board member
- D. the right to see financial statements
Answer: A
Explanation:
preemptive rights. Holders of ADRs do not have preemptive rights, although they have most other rights of shareholders, including the right to vote for board members-even a mother-in-law
NEW QUESTION # 232
An employer profit sharing plan may be described as:
- A. a tax deferral plan
- B. a retirement plan
- C. all of the above
- D. an income tax deduction
Answer: C
Explanation:
Explanation/Reference:
Explanation: all of the above. A profit sharing plan has tax deductible contributions and is designed to provide a retirement plan for participants. Income in the plan is tax-free until withdrawn.
NEW QUESTION # 233
Which of the following is not found in the final prospectus?
- A. a statement as to possible stabilization by the manager
- B. a statement that the SEC neither approves nor disapproves of the issue
- C. the public offering price
- D. a copy of the underwriting agreement
Answer: D
Explanation:
a copy of the underwriting agreement. The underwriting agreement is "not" in the final prospectus. This is a contract between the issuer and the underwriting syndicate.
NEW QUESTION # 234
What is the possible reward for investing in raw land?
- A. potential capital appreciation
- B. large deductions
- C. lack of investment risk
- D. deferred income
Answer: A
Explanation:
Explanation/Reference:
Explanation: potential capital appreciation. This is the only correct choice. Any income is not deferred, raw land cannot be depreciation for a large deduction, and there is substantial risk.
NEW QUESTION # 235
The agreement between the members of a syndicate and the manager is known as the:
- A. underwriting agreement
- B. agreement among underwriters
- C. selling agreement
- D. standby agreement
Answer: B
Explanation:
agreement among underwriters. This agreement authorizes the manager to handle the offering. The final contract between the manager and the issuer is the "underwriting agreement".
NEW QUESTION # 236
An option that permits the holder to exercise the contract only at expiration is referred to as:
- A. American style
- B. Nordic style
- C. Asian style
- D. European style
Answer: D
Explanation:
European style. These options can only be exercised at the expiration date while American style options can be exercised at any time prior to expiration.
NEW QUESTION # 237
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. $7,000
- B. $4,500
- C. $6,000
- D. $1,500
Answer: B
Explanation:
Explanation/Reference:
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 # 238
Limited partnerships try to avoid recapture because:
- A. it always increases the investor's tax bracket
- B. it turns potential capital gains into current taxable income
- C. it may subject the partnership to the add-on tax
- D. it increases the risk of a tax audit
Answer: B
Explanation:
it turns potential capital gains into current taxable income. Recapture is taxed as ordinary income, not capital gain. The other choices are not true.
NEW QUESTION # 239
A tax-free rollover of assets between qualified retirement plans for the benefit of a specific individual is permitted so long as it is accomplished within:
- A. 30 days
- B. 90 days
- C. 60 days
- D. one year
Answer: C
Explanation:
Explanation/Reference:
Explanation: 60 days. ERISA permits 60 days for rollovers.
NEW QUESTION # 240
Bubba buys a ten-year municipal and at 102 and sells it five years later at 101.
What is tax treatment?
- A. the $10 loss is applied against future profits in municipal securities
- B. a $10 long-term capital loss is realized
- C. the $10 loss is applied as a reduction against ordinary income
- D. no capital loss or income deduction is realized
Answer: D
Explanation:
no capital loss or income deduction is realized. The $20 premium is amortized over the ten-year life of the bond. After five years, half of the premium has been written down. The remaining premium is the same as the premium received upon selling the bond. The sale at 101 results in no loss or gain.
NEW QUESTION # 241
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