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STC Series 7 Final Exam 1 With 100- correct answers.
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STC Series 7 Final Exam 1 With 100- correct answers.
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STC Series 7 Final Exam 1 With100% correct answers
Eurodollars are primarily used in:
Financing investments outside of the United States
Which of the following statements is TRUE concerning electronic
communication networks (ECNs)?
They can be used by investors who want to trade anonymously.
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The Dow Jones Industrial Average is considered an index of:
Large-capitalized stocks
An individual purchased stock for $10,000 and has written calls
against the stock over a two-year period. She received premiums
totaling $1,500 in the first year and $2,000 in the second year, with
all of the options expiring. What’s her total cost basis on the stock
after the second year?
$10,000
,When covered calls expire (as in this question), the premium will be
realized as a short-term capital gain and the cost basis for the stock
will generally remain the same. If the options were closed out prior
to expiration, the result is either a capital gain or loss based on the
difference in premiums. If an option was exercised, the premium
would be added to the option's strike price to determine the sales
proceeds and the gain/loss would be either short-term or long-term
based on how long the stock had been held prior to its sale.
Keep in mind, to find the breakeven point on a covered call, the
premium received is subtracted from the cost to purchase the stock.
We have an expert-written solution to this problem!
A broker who transacts an order for a customer must send a
confirmation disclosing all of the following information, EXCEPT:
If it acted as principal and that it prepares research on the security
Which of following option recommendations are suitable for a
sophisticated investor who expects the overall market to fall, but is
bullish on mining stocks?
Buying narrow-based index calls and buying broad-based index puts
On Tuesday May 1, XYX Corporation's Board of Directors announced
a dividend payable on Friday, May 25 to stockholders of record on
Monday, May 14. The ex-dividend date is:
Friday, May 11
Stocks sell ex-dividend on the first business day preceding the
record date. The record date is Monday, May 14. Therefore, the ex-
dividend date would be one business day before, or Friday, May 11.
Which statement is NOT TRUE regarding the prospectus for a
variable annuity contract?
It cannot be delivered electronically.
The tranche with the longest maturity and, therefore, the last to
receive interest and principal payments within a CMO, is known as
the:
Z-tranche
, Which of the following statements is TRUE regarding the disclosure
of back-end sales charges to customers?
A confirmation should be sent disclosing that a sales charge may
have to be paid upon redemption.
An investment banking principal has received a letter from a
customer complaining about a recent new issue that declined
substantially on its first day of trading. The client purchased the
shares based on a recommendation by an associated person of the
firm. The customer contends that the recommendation was
unsuitable. Which of the following statements is TRUE?
A memo must be prepared describing any action taken in response
to the complaint
A company has $50,000,000 par value convertible bonds
outstanding. The coupon rate is 8%. The bonds are currently selling
at 96. What is the current yield?
8.3%
In regard to recruitment advertising by member firms, which of the
following statements is TRUE?
Recruitment advertising may not contain exaggerated claims about
opportunities in the securities business
A customer is seeking a high risk, high reward investment. Given
this objective, which of the following is the MOST appropriate?
A stock with no dividend and a beta of greater than 2.0
Logan has the following position in his account.
Long 1 DEF May 35 call.
Logan anticipates a slight bullish move in DEF from which he wants
to benefit, but he also wants some income generated to reduce the
cost of the position without adding additional risk. He could
accomplish this by adding which of the following positions to his
account?
Short 1 DEF May 45 call
By selling (short) 1 DEF May 45 call, Logan will generate income
through the premium received and reduce the overall cost of the
position. While the short call allows the owner to purchase DEF from
him at $45 per share until it expires in May, Logan is long a DEF call
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