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Series 7 Mistakes > Practice Test Mistakes > Flashcards

Practice Test Mistakes Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Does coverage under SIPC consider a money market fund to be cash or a security?

A

Security

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2
Q

When do investors realize the gains of a mutual fund?

A

The investor must redeem their shares to realize the gain

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3
Q

If a bond has been advance refunded, the yield must be stated as the:

A

yield to call

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4
Q

What type of risk is the risk that time value may erode the premium of an equity option?

A

Capital Risk (unrelated to financial wellbeing of underlying investment)

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5
Q

For a Minnesota Housing Authority Bond, which taxes must be paid?

A

State and fed are exempt

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6
Q

If client places a sell stop order good fo rthe day only, when must you write an order ticket?

A

Upon receipt of order

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7
Q

Who sets initial margin requirements for new securities?

A

The Fed Reserve

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8
Q

Which investment has morderate risk and keeps pace with inflation?

A

Variable Annuity

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9
Q

Straddle

A

One call and one put

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10
Q

Spread

A

two calls or two puts

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11
Q

What type of bond is deposited with trustee against which certificates are sold representing principal payment?

A

Stripped Bond

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12
Q

Why are municipal bonds not normal shorted?

A

Because the market is thinly traded- illiquid

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13
Q

Which orders are reduced for cash dividends on the exdate?

A

Only orders placed below market value

Limit Orders to Buy and Sell Stop Order, Sell Stop Limits (BLSS)

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14
Q

What is a common factor for traditional and ROTH IRAs?

A

Contribution limits are the same

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15
Q

Who sets the price of a tender offer?

A

the issuer

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16
Q

How often is interest paid for CMOs

A

monthly

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17
Q

Does SIPC cover FX?

A

No

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18
Q

Does SIPC cover unregistered stock?

A

Yes

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19
Q

Do treasury bills or treasury notes have longer maturity?

A

T-Notes

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20
Q

Under the intrastate offering rule (Rule 147), when may a resident purchaser of securities resell them to a nonresident?

A

Nine months from the end of the distribution.

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21
Q

How many market makers are required for an issue to initially be included on the NASDAQ?

A

3 market makers

22
Q

How many market makers are required for an issue to continue to be traded on the NASDAQ?

A

2 market makers

23
Q

Calculation for current yield of bond

A

Annual Coupon / Current Price of Bond

When Price of bond listed as 104.24 take (24/32 *10) to find current price in dollars

24
Q

How do exporters hedge against currency?

A

Buy puts on the foreign currency

BUT IF DOLLAR IS THE CURRENCY THEY ARE EXPORTING TO, THEN BUY CALLS OF THEIR OWN DOMESTIC CURRENCY

25
Q

If stock split, is PE ratio impacted?

A

YES

26
Q

Which of the following affects the holding period of XYZ stock, a position that has been held for 6 months?

A

Buying a put (both in the money or out)

27
Q

If registered representative is giving a free financial seminal to retail investors, what sort of approval is needed?

A

Approval from a principal

28
Q

How long must a customer hold a mutual fund before using for margin purposes?

A

30 days

29
Q

The principal underwriter of an open-end investment company is also known as the:

A

sponsor

30
Q

Which of the following organizations determines which OTC securities are eligible for purchase on margin?

A

FRB

31
Q

If trading is halted in a listed stock, what happens to the trading in the stock’s listed options?

A

They are halted

32
Q

When an investor converts a convertable bond, capital gains ARE/ARE NOT realized?

A

ARE NOT, until sale of that stock

33
Q

Priority, Price and Parity apply to trading activity where: NYSE, NYSE/OTC, OTC Market, or third Market?

A

NYSE

34
Q

Under FINRA, Is it prohibited to fail to display a limit order at the customer’s request?

A

No

35
Q

Under FINRA, Is it prohibited to delay reporting a transaction at customer’s request?

A

Yes

36
Q

Do all sell order need to be marked either LONG/SHORT or ONLY MARKED WHEN SHORT?

A

LONG/SHORT

37
Q

When brokers send proxies to the benefit owners, it is at whose expense?

A

The Issuer

38
Q

TRF is used for listed securities when they ARE/ARE NOT traded on the trading floor?

A

ARE NOT

39
Q

If NYSE halts trading in ABC, what does the OTC market do about ABC?

A

It does at it sees fit- either halts or continues trading

40
Q

The 5% markup policy applies to primary and secondary market. T/F?

A

False- only secondary

41
Q

Are warrants equity-like securities or debt securities?

A

Equity-like securities?

42
Q

A writer of a combination expects the market to be?

A

STABLE

43
Q

A buyer of a combination expects the market to be?

A

VOLATILE

44
Q

DO ADRs have foreign income tax?

A

YES

45
Q

In a margin account, when a long position’s market value increases, does the equity rise or the debit balance rise?

A

The equite

46
Q

Can a private placement offering be advertised?

A

No

47
Q

Open End Investment Fund distribute dividends from their ____________?

A

Net Investment Income

48
Q

Is there a holding period for an affiliate if he/she buys shares on the open market?

A

No

49
Q

Are distributions of a 403b plan subject to income tax?

A

Yes

50
Q

What plans are not subject to ERISA?

A

Defined compensation Plans

Series 7 Mistakes (1 decks)

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