Unique Top-selling Series-7 Exams - New 2023 FINRA Pratice Exam
General Securities Representative Dumps Series-7 Exam for Full Questions - Exam Study Guide
NEW QUESTION # 215
What Federal Reserve Board regulation governs the extension of securities-related credit by banks?
- A. Regulation T
- B. Regulation X
- C. Regulation U
- D. Regulation G
Answer: C
Explanation:
Regulation
U. Regulation T is the extension of credit by broker/dealers. Reg U relates to the extension of credit by banks on securities.
NEW QUESTION # 216
The public offering price of the securities of an open-end management investment company is:
- A. the price used by distributors in determining sales incentive discounts to individual purchasers
- B. determined by the relative demand for the shares of the issuer
- C. based upon net asset value of the securities underlying the shares of the issuer plus a 10 % sales charge
- D. determined by a method set forth in the prospectus of the issuer
Answer: D
Explanation:
determined by a method set forth in the prospectus of the issuer. The method is described in the prospectus. It uses the net asset value plus any sales charge
NEW QUESTION # 217
Which of the following would be least useful to an analyst making a technical market report?
- A. the short interest
- B. predictions of recession in the economy
- C. new highs and lows
- D. advances and declines
Answer: B
Explanation:
predictions of recession in the economy. All of the other choices are technical market indicators. An economic forecast is "fundamental" market data.
NEW QUESTION # 218
Which of the following has the least active secondary market?
- A. commercial paper
- B. certificates of deposit
- C. treasury bills
- D. banker's acceptances
Answer: A
Explanation:
commercial paper. The sizes of secondary markets for these securities are listed in order with treasuries first, then banker's acceptances, followed by certificates of deposit. There is only a very small secondary market for commercial paper.
NEW QUESTION # 219
Smart Guys Securities Corporation has given a workable bid to Better Guys Securities Corporation. If market conditions change, Smart Guys may:
- A. change the bid
- B. not change the bid unless first notifying the other dealer
- C. not change the bid
- D. change the bid only with prior approval of the other dealer
Answer: A
Explanation:
Explanation/Reference:
Explanation: change the bid. A workable bid indicates a price level where a dealer is willing to negotiate business. It is not a firm bid and may be changed before becoming firm.
NEW QUESTION # 220
An investment company acting as a conduit in the distribution of net investment income, pursuant to IRS rules, is called:
- A. dual-purpose
- B. balanced
- C. diversified
- D. regulated
Answer: D
Explanation:
regulated. The term "regulated" refers to tax status under Subchapter M of the Internal Revenue Code. This simply means that if a mutual fund or other investment company qualifies for regulated status, the threat of taxation at multiple levels is eliminated.
NEW QUESTION # 221
The registration requirements of the federal securities acts are intended to protect the public interest by providing for a prospectus on new issues and its review by the SEC.
Which of the following is the true of this process?
- A. It guarantees purchasers against an untrue statement of material fact or an omission of material fact
- B. It provides the SEC with adequate information on which to base approval for new issues
- C. It does not imply SEC approval of the issue
- D. It relieves participating underwriters from any further responsibility for checking essential facts before recommending purchase to the customers
Answer: B
Explanation:
Explanation/Reference:
Explanation: It does not imply SEC approval of the issue. The SEC does not approval an issue. It only attempts to see that sufficient information has been provided from which a proper investment determination may be made.
NEW QUESTION # 222
Which of the following is a right for shareholders of common stock?
- A. the right to vote about important matters of the company
- B. the right to dividends
- C. both B and C
- D. the right to have the stock price increase
Answer: A
Explanation:
Explanation/Reference:
Explanation: the right to vote about important matters of the company. Shareholders have no expectation of stock price increase or dividends. They are entitled to receive dividends only if the board of directors declares them.
NEW QUESTION # 223
Which of the following is not a practice of a mutual fund custodian?
- A. maintaining sales records for the fund's underwriter
- B. lending the fund's securities to banks or broker/dealers
- C. changing shareholder registrations on the fund's records
- D. disbursing dividends and capital gains to the fund's shareholders
Answer: B
Explanation:
Explanation/Reference:
Explanation: lending the fund's securities to banks or broker/dealers. This practice is not permitted under federal law.
NEW QUESTION # 224
Which of the following is available both to owners of stock and owners of limited partnership participations?
- A. deduction of business expenses from income
- B. a share in the profits from earnings
- C. tax credits
- D. deductions for losses in excess of income earned
Answer: B
Explanation:
a share in the profits from earnings. Both shareholders and limited partners share in the profits from earnings.
NEW QUESTION # 225
In the distribution of a new issue, a dealer acting as an underwriter is said to have a:
- A. free ride
- B. firm market
- C. firm commitment
- D. divided account
Answer: C
Explanation:
Explanation/Reference:
Explanation: firm commitment. The term underwriting means a guarantee to the issuing corporation. This is a firm commitment, unlike a best efforts offering where there is no guarantee.
NEW QUESTION # 226
Big Easy Investment Banking, Inc., is participating in an Eastern account underwriting of $10 million of municipal bonds by agreeing to underwrite 10% of the issue. One week later, $4 million remains unsold but Big Easy has distributed $1.5 million of bonds.
What is the liability of Big Easy remaining in the account?
- A. $0
- B. $400,000
- C. $1,000,000
- D. $600,000
Answer: B
Explanation:
Explanation/Reference:
Explanation: $400,000. In an Eastern account, liability remains open until the entire syndication is closed.
Therefore, Big Easy has a liability for 10% of the unsold portion. Since the unsold portion is $6 million, the liability for Big Easy is 10% of that amount, which is $400,000.
NEW QUESTION # 227
Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points.
Which of the following orders would be the best recommendation?
- A. buy stop order
- B. sell stop-limit order
- C. sell stop order
- D. sell limit order
Answer: B
Explanation:
Explanation/Reference:
Explanation: sell stop-limit order. A sell stop-limit order specifies a price, but will not turn into a market order. This order will only get executed at the price or better. Stop orders, although quicker in execution, will turn into market orders and the customer will not be guaranteed a specific price. Stop -limit orders are risky, in that the order may or may not get executed, but in this situation, it is the best choice.
NEW QUESTION # 228
Prospective bidders for a municipal bond being issued should consult what document for relevant procedures?
- A. the offering circular
- B. the SEC Registration Statement
- C. the official notice of sale
- D. the Eastern account agreement
Answer: C
Explanation:
Explanation/Reference:
Explanation: the official notice of sale. All bid requirements are found in the official notice of sale.
NEW QUESTION # 229
A mutual fund letter of intent may permissibly be predated for a period of time up to:
- A. 13 months
- B. 90 calendar days
- C. 5 business days
- D. 10 business days
Answer: B
Explanation:
90 calendar days. An investor has 90 days from the date of original purchase to sign a letter of intent. The maximum duration for the letter is 13 months from the initial purchase.
NEW QUESTION # 230
In what broad category of municipal bonds are "limited tax" bonds placed?
- A. new housing authority
- B. special tax
- C. general obligation
- D. revenue
Answer: C
Explanation:
Explanation/Reference:
Explanation: general obligation. A limited tax bond is generally classified as general obligation.
NEW QUESTION # 231
Who owns a corporation?
- A. the holders of common stock
- B. the holders of common stock and the holders of preferred stock
- C. the government
- D. the owners of debentures
Answer: B
Explanation:
Explanation/Reference:
Explanation: the holders of common stock and the holders of preferred stock. The holders of all classes of stock are the owners. Each stock class has separate privileges, but all represent ownership. Even if the government is an owner, it holds shares of stock.
NEW QUESTION # 232
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