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Series 7 Exam With Questions And 100% Correct Answers
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Series 7 Exam With Questions And 100% Correct AnswersWhich of the following would most likely impact a firm's "alpha" coefficient?
A. A dramatic market sentiment change
B. A dramatic Standard and Poor's 500 Index change
C. A dramatic change in a corporation's capital structure
D. A dramatic Wilshire 5000 Index - ANSWER C
Corporate bonds are usually:
I serial bond
II term bond
III quoted on a percent of par basis
IV quoted on a yield basis
A. I and III
B. I and IV
C. II and III
D. II and IV - ANSWER C.Corporate bonds are usually term bonds - all bonds of an issue
having the same interest rate and maturity. Term bonds are quoted on a percentage of
par basis in 1/8ths, which is the same as a "dollar" quote.
Quotes for corporate bonds appearing on Bloomberg are- ANSWER wholesale
corporate bond prices for broker/dealers
A corporation that has issued first mortgage bonds is declared in default by the trustee.
Which of the following statements are TRUE?
,I The bondholders have a legal claim to the property backing the bond
II The bondholders do not have a legal claim to the property backing the bond
III The bondholders may sell the property to satisfy the unpaid obligation
IV. The bondholders cannot sell that property to satisfy the unpaid obligation
A. I and III
B. I and IV
C. II and III
D. II and IV - ANSWER A. The holders of first mortgage bonds have been given a "first
mortgage lien" on any "real" property (real estate - land and buildings) pledged by the
issuer as security for the bond offering. In the event of a default, the bondholders have
the legal right to sell the pledged property, and to use the proceeds to satisfy the
outstanding debt.
Trades of foreign currency OPTIONS take place: - ANSWER on the Philadelphia Stock
Exchange
A customer holds a large portfolio of corporate bonds. The customer is concerned
about capital risk. Which diversification strategy would be least effective to minimize
capital risk for this customer?
A. Diversification among differing issuers in differing states
B. Diversification among differing industries
C. Diversification among differing maturities
D. Diversification among differing coupon rates - ANSWER D
An older customer, age 63, that is in the lowest tax bracket, seeks an investment that
will give him an income stream. The BEST recommendation would be:
A. Variable annuity
B. Municipal bond
C. Certificate of deposit
, D. AAA Corporate bond - ANSWER D
Which of the choices given is a leading economic indicator?
A. Consumer Debt Levels
B. Durable Goods Orders
C. Index of Industrial Production
D. Corporate Profits - ANSWER B
Fiscal policy includes all of the following EXCEPT:
A. government spending
B. social security payment levels
C. tax policy
D. monetary policy - ANSWER D.Fiscal policy includes the tax code, government
transfer payment levels, and government spending. Monetary policy is controlled by the
Federal Reserve Board.
All of the following are exempt securities under the Securities Act of 1933 EXCEPT:
A. U.S. Government Bonds
B. U.S. Government Bond Trusts
C. Municipal Bonds
D. Small Business Investment Companies - ANSWER B.U.S. Government Bond Trusts
are an investment company whose shares (actually, these are termed "units") must be
registered with the SEC under the Securities Act of 1933. Government bonds, municipal
bonds, and Small Business Investment Company issues are all exempt securities under
the 1933 Act.
Which of the following is TRUE about an issuer making a tender offer for its
nonconvertible bonds and subsequently increasing the price being offered by 10%?
A. The increase in the tender price does not affect the life of the offer.
B. The increased tender price extends the life of the offer by an additional 5 business
, days.
C. The tender price has been increased, and thereby the life is increased by another 10
business days
D. The increase in tender price increases the life by another 20 business days -
ANSWER B.The life is shorter because this tender offer is being made by the issuer, not
an outsider
Which of the following MUST be registered under state blue sky laws?
I Sales Representatives
IIBroker-Dealers
III U.S. Government Issues
IV Real Estate Investment Trust Issues
A. I and II only
B. III and IV only
C. I, II, IV
D. I, II, III, IV - ANSWER C
All of the following are violations of FINRA rules EXCEPT:
A. refusal to trade at a stated quote unless the quote has been identified as nominal
B. selling shares of a mutual fund to a customer in lots just below breakpoint quantities
C. pledging fully-paid customer securities as collateral with a bank for a loan taken
D. hypothecating customer margin securities by substituting collateral for a debit
balance - ANSWER D
Your firm is a registered representative and wishes to make a presentation to 50 retail
attendees relating to investing in growth versus value stocks. Which of the following are
TRUE about the presentation?
I The presentation must be approved in writing by a compliance officer or principal
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