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Series 7 > Exam 15 Wrong Answers > Flashcards

Exam 15 Wrong Answers Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Which of the following is false regarding a Rule 147 offering?

A

100% of the proceeds must be invested in the state

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2
Q

A stock dividend affects which of the following?2

A

Shareholder’s equity

Net worth

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3
Q

Prior to completing a trade, a broker/dealer must have which of the following, according to MSRB rules?3

A

Registered representative signature

Principal signature

Customer financial status

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4
Q

Which of the following statements are true regarding income bonds?2

A

They do not pay semiannual interest

Hey may not return 100% of principal at maturity

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5
Q

Which of the following is not a secured bond?

A

Guaranteed bond

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6
Q

Compute combined equity in this account. Long market value is $80,000; short market value is $6,000; Debit is $54,000; Credit is $10,000 and SMA is $10,000.

A

$30,000

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7
Q

Upon termination of employment, an employee’s funds from a 457(b) plan

A

May be transferred into an IRA. Once transferred, the funds become subject to a 10% penalty for early withdrawal

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8
Q

CQS transactions involve all the following except

A

OTCBB

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9
Q

Which of the following would be considered short swing profits by the IRS?

A

A company insider profits on a stock trade after holding the stock for a 5 month period

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10
Q

All of the following are used to properly evaluate the yield to maturity of a bond investment except

A

Current price of the bond

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11
Q

An investor wants to purchase ABC stock, which is currently trading at $38 per share, because he believes it has excellent long term appreciation potential. Near term however, he expects the stock to decline in price due to general market weakness. If he wants to purchase the stock below it’s current market value and generate additional income, he could

A

Write a put at $35

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12
Q

Which of the following is false regarding bond anticipation notes?

A

Notes are repaid from general tax collections and direct government obligations

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13
Q

A customer shorts one ABC Jan 65 call for a premium of 4 and holds one ABC 70 call for a premium of 1. What is the customer’s maximum potential loss?

A

$200

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14
Q

Which of the following needs voter approval?

A

GO

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15
Q

Which of the following is not true regarding a non qualified retirement plan?

A

It needs IRS approval

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16
Q

Which of the following is not an exempt transaction?

A

An issue of 5-year Treasury notes

17
Q

In opening an options account, all of the following must be completed except

A

Eceiving a signed options agreement from the customer

18
Q

A Third Market trade involves

A

Listed stocks traded over the counter

19
Q

As an initial transaction in a margin account, you sell 100 shares of XYZ at 30. The market drops to 25. What is your equity?

A

$2,500

20
Q

A beginning investor has limited funds, but wants immediate exposure to a variety of investment styles. The investor should consider which if the following funds?

A

Fund of funds

21
Q

A customer with a short equity put option is assigned an exercise notice by his firm. How should he handle this?

A

He must accept the exercise notice and buy the underlying stock

22
Q

With a systematic withdrawal plan, from what source are the first payments made?

A

Dividends

23
Q

Jimmy had money invested in SkyHi Aggressive Growth Fund for the past calendar year and realized a substantial capital gain on the shares; however, Jimmy did not sell the shares during the year. Which of the following statements is True?

A

The capital gain is exported to Jimmy on a 1099 form

24
Q

A $200 million new issue is being underwritten by a sYndicate. A “tombstone” ad has been placed in the Wall Street Journal listing the manager of the syndicate and the syndicate’s members. The placing of the ad was required by the

A

None of the above

25
Q

Which of the following is an exploratory well?2

A

Well in an unproven area

Well is a primary site

26
Q

All of the following are true of the voting rights of variable life policy owners except they

A

Have one vote for every share

27
Q

No recourse debt is not usually added to a limited partner’s cost basis, except in the case of

A

Real estate

28
Q

Buy one ABC Jan 40 call and write one ABC Jan 30 call. This position2

A

Is a Credit spread

Loses money if premiums widen

29
Q

A limited partnership’s taxable income exceeds its cash flow. Which two of the following statements are correct?2

A

Limited partners will have phantom income

The limited partnership is experiencing the crossover point

30
Q

A mutual fund is listed as $20.25-$21.41 - +.03. How much is the sales charge for this fund?

A

$1.16

31
Q

Broker/Dealers (B/Ds) are held to higher disclosure standards with regard to penny stocks. What information must be disclosed to penny stock clients?

A

Inside bid and offer quotation, number of shares the quote is good for, and the dealer’s bid/offer if no inside bid/offer quotation is available

32
Q

Which of the following have currency risk?2

A

American Depository Receipts

Eurobonds

33
Q

According to MSRB rules, all of the following would be an advertisement except 3

A

Listings of offerings

Preliminary official statements

Final official statements

34
Q

Which of the following are needed for the opening of a corporate margin account?3

A

New account form

Corporate charter

Corporate resolution

35
Q

Minimum margin on municipal bonds is determined by the

A

FINRA

36
Q

Who enforces MSRB rules on NYSE member firms?

A

FINRA

37
Q

A customer bought 100 shares of XYZ at 48. Within 31 days she sold her shares at 42. She then within 30 days wrote an XYZ May 40 put. How can she avoid deferral of her tax loss?

A

Nothing. The loss will be deferred

Series 7 (47 decks)

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