Updated Jun-2023 Test Engine to Practice Series-7 Test Questions
Series-7 Real Exam Questions Test Engine Dumps Training With 402 Questions
The Series-7 exam consists of 125 multiple-choice questions that must be completed within 225 minutes. The exam covers a broad range of topics related to the securities industry, including investment risk, securities markets, investment products, and regulatory requirements. Candidates are required to score at least 72% to pass the exam. The exam is computer-based and is administered at various testing centers across the United States.
NEW QUESTION # 54
Convertible preferred stock has all of the following characteristics except:
- A. a lower dividend rate than non-convertible preferred
- B. a requirement for shareholders to always accept the call price when called
- C. required dividend payments to shareholders before any dividends are paid to holders of common stock
- D. a dilution of earnings if converted into common stock
Answer: B
Explanation:
Explanation/Reference:
Explanation: a requirement for shareholders to always accept the call price when called. All of the other statements are true "except" this one. Convertible preferred shareholders have a n opportunity to convert to common stock. There is no forced call price.
NEW QUESTION # 55
Which of the following is identified as a funded debt instrument?
- A. US treasury bond
- B. Fannie Mae bond
- C. corporate bond
- D. Series EE savings bond
Answer: C
Explanation:
Explanation/Reference:
Explanation: corporate bond. All of the other securities are issues backed by the US government, which are not considered funded debt.
NEW QUESTION # 56
Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.
What is the NYSE minimum equity maintenance for this account?
- A. $6,600
- B. $12,600
- C. $5,500
- D. $6,000
Answer: A
Explanation:
Explanation/Reference:
Explanation: $6,600. The NYSE maintenance requirement on short margin accounts is 30%. Multiplying the short market value of $22,000 by 30% equals $6,600.
NEW QUESTION # 57
A public offering by an investment banker in which any securities not sold are returned to the issuer is known as:
- A. a firm commitment
- B. a contingency offering
- C. an all or none offering
- D. a best efforts offering
Answer: D
Explanation:
a best efforts offering. With a best efforts offering the investment banker does not make any guarantee that all the offered securities will sell. The investment banker pays for only those securities that are actually sold and returns unsold shares to the issuer.
NEW QUESTION # 58
The net asset value of a mutual fund was $9.72 last month. This month it is calculated at $9.85.
What is the change in value called?
- A. appreciation
- B. capital gain
- C. asset revaluation
- D. yield
Answer: A
Explanation:
Explanation/Reference:
Explanation: appreciation. That's the correct term for increase in value.
NEW QUESTION # 59
At the time it underlying stock is trading at 48, Bubba buys a listed call option with a $50 strike price for $300. At what minimum price must that stock trade for Bubba to recover his investment (ignoring commission and taxes)?
- A. $51
- B. $48
- C. $53
- D. $45
Answer: C
Explanation:
$53. The breakeven price on the call is the premium plus the strike price. Since the premium is $3 per share, the breakeven price is $53.
NEW QUESTION # 60
In considering the fairness of a firm's markup, the FINRA considers:
- A. amount of the transaction
- B. financial condition of the client
- C. profitability of the member firm
- D. dealer cost for the security
Answer: A
Explanation:
amount of the transaction. The other choices are not FINRA considerations. The dollar amount of the transaction is one of the factors considered in markup fairness. Other factors include the type of security, the amount of service rendered, the unit price of the security, and general availability of the security.
NEW QUESTION # 61
What is the importance of the "at risk" rule?
- A. it limits liability to the amount at risk
- B. it limits deductions to the amount at risk
- C. it prevents carry forward of disallowed interest deductions
- D. deductions for interest may not exceed investment income
Answer: B
Explanation:
it limits deductions to the amount at risk. Deductions may not exceed contributed capital.
NEW QUESTION # 62
A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.
What subscription ratio is the corporation establishing for each new share?
- A. 10 million rights per share
- B. 6 million rights per share
- C. 6 rights per share
- D. 10 rights per share
Answer: C
Explanation:
Explanation/Reference:
Explanation: 6 rights per share. Each share receives a right and there are six million shares receiving rights to one million new shares. So six rights are required for one share.
NEW QUESTION # 63
Which of the following is normally the largest asset of a manufacturing company?
- A. notes receivable
- B. accounts receivable
- C. sales
- D. inventory
Answer: D
Explanation:
Inventory. A manufacturer will normally have more inventory than accounts receivable and notes receivable. Sales is not an asset category.
NEW QUESTION # 64
As a general rule, when a partnership is terminated, in what order are assets distributed?
- A. general creditors, general partners, limited partners, secured lenders
- B. secured lenders, general creditors, limited partners, general partners
- C. secured lenders, limited partners, general creditors, general partners
- D. general creditors, secured lenders, limited partners, general partners
Answer: B
Explanation:
secured lenders, general creditors, limited partners, general partners. Creditors first, in order of their security, then partners. General partners are last.
NEW QUESTION # 65
Bubba buys a US treasury bond. The interest he earns is:
- A. subject to state income tax but exempt from federal income tax
- B. subject to federal and state income tax
- C. exempt from federal and state income tax
- D. subject to federal income tax but exempt from state income tax
Answer: D
Explanation:
Explanation/Reference:
Explanation: subject to federal income tax but exempt from state income tax. The interest on US government securities is taxed by the US government but not by state governments. The opposite is true of bonds issued by a state, which are exempt from federal tax but subject to state taxes -except for taxes of the state that issues them.
NEW QUESTION # 66
Bubba opens a margin account and sells short 100 shares of XYZ at $50. Assuming a Reg T requirement of 50%, what is the opening balance in Bubba's account?
- A. $5,000
- B. $2,500
- C. $10,000
- D. $7,500
Answer: D
Explanation:
Explanation/Reference:
Explanation: $7,500. The short sale transaction is $5,000. The Reg T required deposit is $2,500 ($5,000 x
50%). Adding both results in $7,500.
NEW QUESTION # 67
Under what circumstances may a registered investment company change its investment objective?
- A. after providing notice that is recorded in the Federal Register
- B. after approval by a majority vote of the shareholders
- C. after SEC approval
- D. after it obtains a new charter from the state secretary
Answer: B
Explanation:
Explanation/Reference:
Explanation: after approval by a majority vote of the shareholders. All vital interests of the shareholders are subject to their majority vote.
NEW QUESTION # 68
Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.
What is the NYSE minimum equity maintenance for this account?
- A. $6,600
- B. $12,600
- C. $5,500
- D. $6,000
Answer: A
Explanation:
$6,600. The NYSE maintenance requirement on short margin accounts is 30%. Multiplying the short market value of $22,000 by 30% equals $6,600.
NEW QUESTION # 69
According to FINRA Conduct Rules, a party judged guilty of a rule infraction by the District Business Conduct Committee may then appeal to:
- A. the FINRA Board of Governors
- B. the SEC
- C. the FINRA Board of Arbitration
- D. the public court system
Answer: A
Explanation:
the FINRA Board of Governors. The first appeal is to the Board of Governors, then to the SEC, and then to the federal courts.
NEW QUESTION # 70
In the distribution of a new issue underwriters or selling group member are prohibited from:
- A. all of the above
- B. selling to the public at the so-called public offering price
- C. selling to another broker or dealer who needs to fill an accommodation order
- D. withholding blocks of a new issue in the member's account
Answer: D
Explanation:
Explanation/Reference:
Explanation: withholding blocks of a new issue in the member's account. Underwriters and selling group members are prohibited from keeping blocks of a new issue for their own accounts.
NEW QUESTION # 71
Bubba buys a bond issued at par with a 5% coupon that is convertible into common stock at $40.
What conversion ratio does Bubba determine?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: A
Explanation:
25. The conversion ratio is how many shares of common stock Bubba obtains by converting. Divide the bond price - $1,000 for a single bond - by the $40 conversion price.
NEW QUESTION # 72
Which of the following sets of prices is that of a closed-end investment company?
- A. $10.10 $11.00
- B. $20.15 $21.85
- C. $28.14 $27.75
- D. $7.50 $8.10
Answer: C
Explanation:
Explanation/Reference:
Explanation: NAV=$28.14 and Asked Price=$27.75. In this case the ask price is less than NAV, which is never true of an open-end investment company.
NEW QUESTION # 73
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Topics of FINRA Series 7 Certification Exam
Candidates must know the exam topics before they start of preparation. Because it will really help them in hitting the core. Our FINRA Series 7 exam dumps will include the following topics:
- Retirement plans
- Options
- Taxation
- Investment risk
- Equity, and debt instruments
- Interactions with clients
Series-7 Actual Questions Answers PDF 100% Cover Real Exam Questions: https://www.exam4pdf.com/Series-7-dumps-torrent.html
Series-7 Exam questions and answers: https://drive.google.com/open?id=1TT2K0AsQld2YU6jPW7OegRcjaKgjRWnC
