[Sep 16, 2023] Series-7 certification guide Q&A from Training Expert 2Pass4sure [Q144-Q158]

Series-7 FINRA

admin • September 16, 2023

[Sep 16, 2023] Series-7 certification guide Q&A from Training Expert 2Pass4sure [Q144-Q158]

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[Sep 16, 2023] Series-7 certification guide Q&A from Training Expert 2Pass4sure

Series-7 Certification Overview Latest Series-7 PDF Dumps

FINRA Series-7 (General Securities Representative Qualification Examination (GS)) Exam is a critical exam for anyone looking to become a registered representative in the United States. Series-7 exam is designed to test the knowledge and skills required to perform the duties of a general securities representative, including selling and trading stocks, bonds, and other securities. Passing Series-7 exam is a prerequisite for anyone who wants to work as a securities representative in the United States.

NEW QUESTION 144
Which of the following securities has the highest amount of market risk?

US treasury bills

US treasury certificates

US treasury notes

savings bank deposits

US treasury notes. Savings bank deposits have no risk. The short duration of treasury bills and certificates embodies less market risk than longer-term treasury notes.

NEW QUESTION 145
The initial Federal Reserve Bank margin requirement is set at 60% and Bubba purchases 100 shares of XYZ at $100 per share. He deposits $6,000 of the $10,000 purchase price in his account.
If XYZ increases in value to $150 per share, how much excess equity would Bubba have in his account?

$1,000

$1,500

$2,000

$3,000

$2,000. Bubba started with $6,000 of equity and a debit balance of $4,000. The market value of his XYZ stock increased by $5,000 ($15,000 – $10,000). Therefore, his equity increased to $11,000. Since Bubba only needs 60% equity, his Reg T requirement is $9,000 ($15,000 x 60%). His equity exceeds the requirement by $2,000.

NEW QUESTION 146
Customers who engage in increased activity of wiring money from their account could indicate which of the following activities?

Interpositioning

Churning

Crossing

Money laundering

Explanation/Reference:
Explanation: money laundering. Potential money laundering activities include excessive wiring of money between accounts.

NEW QUESTION 147
Bubba buys a municipal bond at a discount and holds it to maturity.
Which of the following is true?

interest is taxable as ordinary income

the capital gain is tax exempt

interest is tax exempt, but the capital gain is taxable

the capital gain is tax exempt, but the interest is taxable as ordinary income

Explanation/Reference:
Explanation: interest is tax exempt, but the capital gain is taxable. This happens because Bubba purchased the bond in the secondary market with a different price than the original issue face amount.

NEW QUESTION 148
A basis point is:

0.10%

0.01%

1.00%

0.001%

0.01%. A basis point is one-hundredth of a point. Since a point is 1%, a basis point is 0.01%. A bond price change of one basis point is ten cents ($1,000 x 0.01%).

NEW QUESTION 149
Which of the following best describes depreciation?

a tax credit available to investors in heavy equipment

deductions from gross income to offset lower value of equipment

return of principal from real estate investments

capitalized and amortized maintenance costs

Explanation/Reference:
Explanation: deductions from gross income to offset lower value of equipment. The cost of equipment is deducted from gross income over the life of the equipment, as its value declines.

NEW QUESTION 150
Which of the following pays interest at maturity only?

a corporate serial bond

US treasury bills

Income bonds

Series H savings bonds

Explanation/Reference:
Explanation: US treasury bills. T-bills are purchased at a discount and do not have interest coupons. When surrendered, the par value is paid at maturity. All the other choices, if they are paying any interest, pay throughout the term of the issue.

NEW QUESTION 151
Which of the following registered investment companies normally sells with an appropriate commission added to the contract price?

an open-end investment company

a unit investment trust

a face-amount certificate company

a closed-end investment company

Explanation/Reference:
Explanation: a closed-end investment company. An open-end investment company may have a sales charge but not a commission.

NEW QUESTION 152
In a 401(k) plan, when are employee’s contributions of compensation deferral vested?

after 2 years

immediately

after 5 years

the same as the employer’s contributions

immediately. The employer’s contributions may be subject to a vesting schedule, but the employee’s contributions are immediately vested.

NEW QUESTION 153
An employer profit sharing plan may be described as:

an income tax deduction

a retirement plan

a tax deferral plan

all of the above

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 154
Bubba has several accounts at a brokerage firm. Which of the following is not covered by SIPC?

individual account in Bubba’s name only

commodities account in Bubba’s name only

joint account of Bubba and his wife

joint account of Bubba and his son, Bubba, Jr.

commodities account in Bubba’s name only. SIPC does not cover commodities accounts.

NEW QUESTION 155
With respect to the public offering of securities by an underwriting syndicate, which of the following is true?

the underwriting spread is greater than the selling concession

the reallowance is greater than the selling concession

the selling concession is greater than the underwriting spread

the reallowance is greater than the underwriting spread

Explanation/Reference:
Explanation: the underwriting spread is greater than the selling concession. The underwriting spread (or
“gross spread”) is the difference between the price paid to the issuer and the public offering price. The selling concession is the amount that the managing underwriter gives to dealers in the selling group. The reallowance is the amount that underwriters give to other dealers and is less than the selling concession.

NEW QUESTION 156
Convertible preferred stock has all of the following characteristics except:

a lower dividend rate than non-convertible preferred

a dilution of earnings if converted into common stock

a requirement for shareholders to always accept the call price when called

required dividend payments to shareholders before any dividends are paid to holders of common stock

a requirement for shareholders to always accept the call price when called. All of the other statements are true “except” this one. Convertible preferred shareholders have a n opportunity to convert to common stock. There is no forced call price.

NEW QUESTION 157
If a municipality has funds available to make a partial call of an issue of outstanding serial bonds, which bonds should be called first?

the shortest maturity

the maturity with the largest number of bonds

the longest maturity

the maturity bearing the lowest interest rate

the longest maturity. These bonds are called first because the municipality will save the interest costs for the longest period of time.

NEW QUESTION 158
Which of the following price quotes is representative of a treasury bill?

98.9 – 100

96 – 96½

5.78 – 5.73

5.55 – 5.75

Explanation/Reference:
Explanation: 5.78 – 5.73. Prices for treasury bills are quoted as percentage yields. A quotation in yield means the first price in the spread – the bid price – should be higher than the offer price. A higher yield means a lower price.

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