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Series 7 > Exam 5 Wrong Answers > Flashcards

Exam 5 Wrong Answers Flashcards

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Series 7 Top-off Exam flashcards
1
Q

If interest rates are falling, which statement is true?

A

Premium bonds will appreciate faster than discount bonds

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2
Q

A customer’s margin account has available SMA of $1,000. How much would the customer have to deposit to purchase listed options with premiums totaling $4,000?

A

$3,000

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3
Q

Which of the following is/are characteristics of the interbank system?

A

Not regulated

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4
Q

When a member is liable for its percentage of any unsold securities, the syndicate is a(n)2

A

Eastern syndicate

Undivided syndicate

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5
Q

Under MRSB uniform practice rules, regular way settlement on municipal bonds is

A

Three business days following trade date

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6
Q

A municipal broker/dealer enters a bid wanted. This is a

A

Non binding request for a likely bid

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7
Q

A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from terminal illness or injury is called

A

Accelerated benefit provision

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8
Q

What is the major difference between oil and gas limited partnership and a real estate limited partnership?

A

IDCs

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9
Q

Regarding underwriting compensation, rank the following in order of size from greatest to least.3

A

Spread, concessions, reallowance

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10
Q

Under a Regulation S offering, when can securities be resold to the investors in the United States?2

A

1 year for equity securities

40 days for debt securities

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11
Q

Which of the following is a lagging indicator?

A

Average prime rate

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12
Q

In a margin account, market value is $11,000 and debit is $5,000. What is the buying power in this account?

A

$1,000

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13
Q

What method of calculating the cost basis of mutual fund shares sold requires recording each share transaction and accounting for individual shares sold?

A

Share Identification method

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14
Q

Which of the following corporate bonds is considered safest for an investor?

A

AAA-rated unsecured bonds

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15
Q

Which of the following will be a violation of the Private Transactions Conduct Rule 3040?

A

An associated person offering securities that are not registered with the Commission

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16
Q

An investor buys bonds which are priced in basis points. These bonds are

A

Serial bonds

17
Q

A customer writes 10 ABC 40 puts at $4.75 when the market price of ABC is $42. What is the maximum possible gain for the investor?

A

$4,750

18
Q

Which of the following is not true concerning a redemption fee?

A

It is a form of sales charge

19
Q

Accrued interest on a new issue municipal bond is calculated from

A

Dated date to settlement date

20
Q

Which of the following documentation is required to open a corporate account?

A

Corporate charter and the corporate resolution

21
Q

Which measures a corporation’s solvency?

A

Working capital

22
Q

What is an underwriter’s maximum sales compensation, including wholesaling costs, in a DPP offering?

A

10%

23
Q

The G.O. index contains

A

20 GO bonds with 20 year maturities

24
Q

Which of the following are powers of the SEC?2

A

Write laws

Revoke registrations

25
Q

T invests into his variable annuity on a periodic payment plan. If T wishes to annuities the contract and start receiving monthly payments now, which of the following is True?

A

T must stop investing before he can annuities the contract and start receiving monthly payments

26
Q

Shares of stock that have actually been sold to the public are known as

A

Issued stock

27
Q

Which of the following are true of negotiable certificates of deposit?2

A

The issuing bank guarantees the instrument

They can be traded in the secondary market

28
Q

The expense limitation clause of a life insurance policy

A

Requires the insurance company to pay administrative expenses above the maximum charges stated in the policy

29
Q

What are the two types of voting processes used by corporations?

A

Statutory and cumulative

30
Q

The market value is $12,000. The debit balance is $5,500. What is your buying power?

A

$1,000

31
Q

A retired investor is reinvesting the proceeds from a mature municipal bond. Which of the following would best suit her objectives?

A

A pre-refunded bond

32
Q

Who of the following are restricted persons associated with an IPO?2

A

The father in law of a registered representative

A broker/dealer not involved in the syndicate

33
Q

The method by which a mutual fund offering price will be determined is

A

Outlined in the prospectus

34
Q

In which qualified retirement plan may both the employer and employee contribute to an employee trust?

A

401k

35
Q

The announcement that must be filed in connection with a Regulation D offering is

A

An offering memorandum

Series 7 (47 decks)

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