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series 7 final exam questions with 100% correct answers
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series 7 final exam questions with 100% correct answers
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series 7 final examWhich of the following is true regarding convertible bonds? - correct answer ✔✔1. conversion price is
set at time the bond is issued
2. if Mkt price is @ discount then the bond price is more influenced by IR than stocks
3. If Mkt price is @ premium then bond price is more influenced by stocks than IR
All of the following are true of oil and gas limited partnerships except - correct answer ✔✔income
programs may involve the acquisition of leases
What are federal funds? - correct answer ✔✔The excess reserves on deposit at the Fed
All of the following bonds trade "flat" except - correct answer ✔✔municipal discount bonds
What type of orders can be executed on RAES, the CBOE automated execution system? - correct answer
✔✔Market orders
If yield curves on bond prices are narrow, it is said that the yield curves are... - correct answer ✔✔flat
A client receives confirmation on a trade of a stock with erroneous information. What should you do? -
correct answer ✔✔Tell your manager and then come to an agreement with the client
Sam Jones has filed a tender offer to buy 50% of Dundee.com outstanding stock for $46 per share. which
of the following sales to the tender offer violate the 1934 securities exchange act regarding tendering of
the stock? - correct answer ✔✔A customer selling Dundee.com stock causes a short position in
Dundee.com stock in his account
An investor has written a put on equity securities. Just prior to the expiration, the put is in the money
and exercised. Which of the following is required of the investor? - correct answer ✔✔Deposit the
required amount within 3 business days
,A customer tells you to purchase GO bonds. the order must be approved by whom? - correct answer
✔✔The municipal principal
Which of the following describes the 30-day visible supply? - correct answer ✔✔The dollar supply of
new bonds to be issued in the next 30 days
Which of the following securities is considered funded debt? - correct answer ✔✔debenture bonds
Which of the following is true regarding the actions of the OBO on the floor of the CBOE? - correct
answer ✔✔He can trade for a customer who has a limit order on his book
Which of the following debt securities is the least likely to be called early? - correct answer ✔✔Z tranche
CMO
Assuming a decreasing interest rate environment and a 10 year call feature on each bond, which of the
following has the greatest price appreciation? - correct answer ✔✔A 30 year bond bought at a discount
Which of the following are not subject to state and local taxes? - correct answer ✔✔1. Treasury notes
2. Federal Home Loan Debt Issues
The FOMC is selling T-Bills in the open market. Which of the following are true? - correct answer ✔✔1.
Interest rates will rise
2. Secondary bond prices will fall
Under FINRA rules, a person who applies for work at a member firm becomes subject to FINRA rules and
actions when - correct answer ✔✔A principal of the member firm signs the person's form U-4
To which of the following transactions does the 5% Policy Rule Apply? - correct answer ✔✔1. Listed
Stock traded on an exchange
2. A principal transaction with a client
, Geographical diversity in a municipal bond portfolio best protects an investor against which of the
following problems? - correct answer ✔✔A regional economic downturn
Which of the following is the automated reporting system for corporate bond trades executed OTC -
correct answer ✔✔TRACE
An investor writes a call on stock that he already owns. At expiration, what is the maximum amount he
can lose? - correct answer ✔✔His cost in the stock, less the premium
Which of the following statements regarding the VIX should the customer be aware of before he starts
trading in those options? - correct answer ✔✔1. The VIX is based on an index but is valued on investor
sentiment
2. The investor has no limit on the number of options he may have on one side of the market
3. The options expire on the Wednesday that is 30 days prior to the third Friday of the next month
The FED uses which of the following most often to control the money supply? - correct answer
✔✔Changing the discount rate
The beta calculates the comparison of the movement of stock in regards to which of the following? -
correct answer ✔✔the price movement of the stock to other stocks in the entire market
One method of analyzing limited partnerships, which identifies the revenues and expenses in the
offering is called..? - correct answer ✔✔Cash flow analysis
According to Reg T, an investor who purchases securities must meet the margin call within how many
days after the regular way settlement date has passed? - correct answer ✔✔Two business days
Which of the following is not a true statement regarding the issuance of the new equity securities? -
correct answer ✔✔A fee based on the amount of shares must be paid by the issuer prior to the offering
being sold to investors
A pension fund portfolio manager desires to increase the income for the portfolio he manages. Which of
the following positions would accomplish this? - correct answer ✔✔Write covered calls
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