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Series 7 Top Off questions and correct answers graded A+ passed
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Series 7 Top Off questions and correct answers graded A+ passed
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Series 7 Top OffA registered representative must keep which of the following records related to each existing customer
account? - correct answer ✔✔Copy of new account form info, chronological record of trades, current
account statement showing securities positions, aggregate position held in each security by every
customer detailed by location
Regarding firm-required Arbitration agreements, each member firm must provide the customer with a
separate copy of the arbitration agreement for signature and return within ______ days of account
opening - correct answer ✔✔30 days
T/F: Duplicate account statements must be sent to the municipal employer - correct answer ✔✔False
(Duplicate trade confirmations must be sent to muni employer and prior notice b4 opening account)
OFAC purpose - correct answer ✔✔impose economic sanctions against hostile foreign countries and
groups
Approval of new accounts for FINRA member firms can be performed by the ______ only. - correct
answer ✔✔Branch Office Manager
Information about SIPC, including a copy of the SIPC brochure, must be made available to customers: -
correct answer ✔✔Annually and at account opening
Regulation T applies to: - correct answer ✔✔ADR, Warrants, and Convertible Corp. Bonds (Gov. Bonds
exempt)
How much of other marginable common stocks can be purchased without making a deposit? - correct
answer ✔✔twice the amount of the SMA
If a corporation declares and pays a stock dividend, the shareholder has more shares worth
proportionately less; so that the aggregate market value remains unchanged. What is the effect on the
,debit balance? - correct answer ✔✔There is no effect on the debit balance - the debit is affected by
additional borrowing or repayment of the debt.
If a customer buys shares of ABC, covering the short ABC position, what will occur to Credit, Market
Value, and SMA? - correct answer ✔✔Credit Decreases; Market Value Decreases; SMA Increases
Initial approval of options accounts is performed by the - correct answer ✔✔Branch Office Manager and
Registered Options Principal
Which documents are completed when opening a margin account? - correct answer ✔✔new account
form, margin agreement, loan consent agreement, and credit disclosure statement
Restricted means? - correct answer ✔✔Restricted means how much is equity amount short of margin
requirement. For the account not to be restricted, equity must be 50% of the market value
Example of figuring out change in SMA - correct answer ✔✔Since the market value is $10,000, the
customer can borrow a total of 50% or $5,000 (initial SMA). The customer has actually borrowed $4,000
though since there is $1,000 in the SMA account. If the mkt value increases by 10% (11,000) half of that
can be borrowed (5,500) but since we already borrowed 4,000 we will now have 1,500 in the account
which is an increase of 50% from the former $1,000.
Which of the following will decrease the debit balance in a customer's margin account? - correct answer
✔✔Cash dividends received & Sale of securities
At what market value will the account be at the minimum maintenance margin level set by the self-
regulatory organizations? - correct answer ✔✔Market Value at maintenance=Credit Balance/1.3
Remember in a short margin account, if you are given SMV without credit, just take ____ of the SMV and
then add it to the SMV to find Credit - correct answer ✔✔half
Calculating SMA in Short account - correct answer ✔✔If SMV drops from $80,000 to $65,000, to support
a $65,000 stock position at 50% margin requires equity of $32,500. Since there is equity of $55,000 in
the account, the excess of $22,500 may be borrowed and is the SMA amount. Initial equity doesnt count,
,if it doesnt tell you a specific SMA amount, the initial amount is probably zero so just take difference of
new equity and 50% of market value
"Selling Power" in a margin account means _______ - correct answer ✔✔is twice the amount of SMA
(the amount that can be sold in securities)
Regarding a customer who wishes to write a put in a cash account, __________ - correct answer
✔✔100% of the strike price must be deposited
Overbought - correct answer ✔✔Mkt price avg. increases everyday, advancing<falling
Regulation A (tier 1 & 2) - correct answer ✔✔E-Z registration for startups; Tier 1=no audit <20M, Tier
2=audit <50M
Affects holding period - correct answer ✔✔Sell short against box, buy put contract
Which Muni issues exempt from Int. tax - correct answer ✔✔essential public use (water/pollution)
Muni bond insurance insures _____ and ______ - correct answer ✔✔Interest and principal
Used to analyze G.O. issues - correct answer ✔✔Collection ratio, debt to value ratios
MF financial statements sent - correct answer ✔✔semi-annually
MF Investment cost - correct answer ✔✔Front load cost
RELP v. REIT - correct answer ✔✔REIT does not allow for flow-through of loss
Penny stock rule applies to - correct answer ✔✔customer thats been with broker dealer< 1 year,
customer with less than 3 penny stocks with same broker
, managed limited partnership offering sold on ______ basis, - correct answer ✔✔firm commitment
(Unmanaged= best efforts)
Sallie Mae Public Fed or Private agency? Traded or not traded? - correct answer ✔✔Private agency, listed
and trades
Document sent out with Muni Bond - correct answer ✔✔Official statement
DNC list maintained by? - correct answer ✔✔Firm and FTC only
If someone wants to invest money to retire in 20 years, best recommendation is - correct answer
✔✔low-load variable annuity w/ growth potential (or prefunded G.O. ?)
Interest rates rise and Fed reserve tightens credit are signs of - correct answer ✔✔Economic expansion
Serial bond - correct answer ✔✔Issued same date, diff. maturities
Commercial paper doesn't need a - correct answer ✔✔prospectus
official notice of sale does not include - correct answer ✔✔reoffering yields
Options worksheet requires an ________ delivered to the customer because it is considered________ -
correct answer ✔✔options disclosure, sales literature
Calculate the value of a right - correct answer ✔✔(Mkt price-sub. price)/(N+1)
Which shareholders are considered owners of a corp. - correct answer ✔✔common and preferred
Interest income from CMOS/GNMA/Agency securities - correct answer ✔✔subject to Fed & state tax
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