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FINRA SERIES 7 EXAM FULL QUESTIONS AND ANSWERS |100% CORRECT
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FINRA SERIES 7 EXAM FULL QUESTIONS AND ANSWERS |100% CORRECT STRIPS may be attractive to investors for which of the following reasons? A. They offer semi-annual interest payments B. The securities are tax-free until they mature C. They carry almost no reinvestment risk D. They are offered at...

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  • September 25, 2024
  • 56
  • 2024/2025
  • Exam (elaborations)
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  • finra series 7 exam full questions and answers 10

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TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024

FINRA SERIES 7 EXAM FULL
QUESTIONS AND ANSWERS |100%
CORRECT


STRIPS may be attractive to investors for which of the following reasons?




A. They offer semi-annual interest payments

B. The securities are tax-free until they mature

C. They carry almost no reinvestment risk

D. They are offered at only a 20 year maturity which is a maturity that is not offered by

traditional Treasury securities - ✔️✔️Correct-C. They carry almost no reinvestment risk

The Alternative Minimum Tax (AMT):



A. Adds back in certain "tax preference items" that are deducted for purposes of regular

income tax

B. Is designed to ensure that residents of states with high taxes do not pay more tax as

a percentage of income than residents of states with lower taxes

C. Affects both corporate and individual income tax




1/56

,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
D. Requires affected taxpayers to calculate their income tax in two ways and pay the

lower amount - ✔️✔️Correct-A. Adds back in certain "tax preference items" that are

deducted for purposes of regular income tax

A wash sale occurs when:



A. Contemporaneous purchases are made for the same security

B. A sale of a security at a capital loss occurs fewer than 30 days prior to the purchase

of the same or a similar security

C. Any sale of a security occurs within 30 days of a purchase of the same or a similar

security

D. An investor reports capital gains and losses for securities issued by the same

company in the same tax year - ✔️✔️Correct-B. A sale of a security at a capital loss

occurs fewer than 30 days prior to the purchase of the same or a similar security

403(b) plans are available to the following groups of people:

I. Government employees

II. Employees of public educational institutions

III. Employees of nonprofit organizations

IV. Self-employed individuals



A. II and III

B. I and II


2/56

,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
C. I and IV

D. III and IV - ✔️✔️Correct-A. II and III

The writer of a put has:



A. The right to sell

B. The obligation to buy

C. The obligation to sell

D. The right to buy - ✔️✔️Correct-B. The obligation to buy

Marilyn writes an ABC Aug20 put @ 4. What is the maximum amount she could lose on

this option?



A. $2,000

B. $1,600

C. Unlimited

D. $400 - ✔️✔️Correct-B. $1,600

For a call option, the strike price is:



A. The market value of the underlying security at which the option must be exercised

B. The price at which the call holder can buy the underlying security from the call writer

C. The price at which the call writer must buy the underlying securities from the call

holder


3/56

, TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
D. The breakeven point for the holder of the option - ✔️✔️Correct-B. The price at which

the call holder can buy the underlying security from the call writer

An interval fund is a type of investment company that is:



A. Redeemable at any time

B. Must be purchased in periodic intervals

C. Highly liquid

D. Legally classified as a closed-end fund - ✔️✔️Correct-D. Legally classified as a

closed-end fund



Interval funds are a type of investment company that offers higher yields but permits

shareholders to sell their shares only at specific time periods or "intervals." Legally

classified as a closed-end fund, interval funds share characteristics with mutual funds

such as the fact that there is no trading or secondary market for interval funds; instead

shares must be purchased and sold (redeemed) with the fund. An investment in an

interval fund is much less liquid than shares in other types of investment companies,

such as mutual funds, closed-end funds, and ETFs.

Which of the following would you be the least interested in looking at to analyze a

revenue bond?



A. Flow of funds


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