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FINRA Series 7 Certification Path
- Step 1: Fist the applicant must take and pass the SIE Exam
- Step 2: After it Secure a Sponsorship
- Step 3: and then Study for the Series 7 Exam
- Step 4: At the end Pass the Series 7 Exam
FINRA Series-7 Exam Syllabus Topics:
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NEW QUESTION 189
Which of the following items is not deducted to determine a corporation's net income?
- A. interest
- B. dividends
- C. taxes
- D. all of the above
Answer: B
Explanation:
dividends. Net income is determined before dividends.
NEW QUESTION 190
Bubba held one XYZ July 30 listed call option when XYZ split 2 for 1.
What is the resulting position, Bubba has on the Option Clearing Corporation's record?
- A. long two XYZ July 15 calls
- B. long two XYZ July 30 calls
- C. long one XYZ July 30 call
- D. long one XYZ July 30 call and short one XYZ July 30 call
Answer: A
Explanation:
long two XYZ July 15 calls. Double the number of contracts and half the strike price. This is similar to XYZ shareholders doubling the number of shares they hold at the lower price.
NEW QUESTION 191
Which of the following activities by a limited partner may subject the partner to unlimited liability?
- A. making loans beyond those specified in the partnership agreement
- B. committing the partnership in any manner
- C. participating in management of the partnership
- D. all of the above
Answer: D
Explanation:
all of the above. Each of these actions by a limited partner causes the loss of limited liability.
NEW QUESTION 192
Distribution from an IRA can begin at age 59½ and must begin by age:
- A. 70½
- B. whenever the individual is retired
- C. 0
- D. 1
Answer: A
Explanation:
70½. This the age at which IRA withdrawals are required.
NEW QUESTION 193
Bubba Corporation has 3,500,000 shares of common stock outstanding and its trading volume in the few weeks has been as follows:
Week 1 - 43,000
Week 2 - 30,900
Week 3 - 37,500
Week 4 - 42,600
Week 5 - 33,000 (the most recent week)
If an affiliated person wanted to liquidate some of his holding of 100,000 shares pursuant to SEC Rule 144, how many shares could he sell?
- A. 37,400
- B. 35,000
- C. 38,500
- D. 36,000
Answer: D
Explanation:
36,000. Under Rule 144 up to one percent of the outstanding shares or the average weekly volume for the preceding four weeks, whichever is greater. The total volume for the last four seeks was 144,000 shares. The average is therefore 36,000 shares. This is greater than one percent of the shares outstanding (35,000).
NEW QUESTION 194
Bubba's order to purchase investment company shares must be executed at a price based upon the net asset value of the shares:
- A. next computed after receipt of the order by the dealer
- B. computed the previous day at the close of the NYSE
- C. computed the same day the order is received by the dealer
- D. last computed before receipt of the order by the dealer
Answer: A
Explanation:
Explanation/Reference:
Explanation: next computed after receipt of the order by the dealer. This is called "forward pricing".
Generally, the price is computed as of the close of the market on the day of the order. However, if the order is received after this computation, the order is executed based upon the next day calculation.
NEW QUESTION 195
A NYSE floor member executing an order for a public customer asks the specialist in the stock to guarantee a price while giving the customer an opportunity to obtain a better price. This procedure is known as:
- A. a stop order
- B. floor protection
- C. a special deal
- D. stopping stock
Answer: D
Explanation:
Explanation/Reference:
Explanation: stopping stock. This is the definition of the term "stopping stock".
NEW QUESTION 196
Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?
- A. they have a fixed rate of return
- B. they are readily marketable
- C. they have a fixed maturity date
- D. they are not secured by collateral
Answer: D
Explanation:
they are not secured by collateral. Equity is ownership, which has no collateral security...or any other kind of security such as a guaranteed return, maturity, or marketability.
NEW QUESTION 197
Bubba buys 100 shares of XYZ stock at $40 per share and sells a listed July XYZ call at 45 for a $2 premium.
What is his loss potential?
- A. $4,200
- B. $3,800
- C. $4,000
- D. $4,500
Answer: B
Explanation:
Explanation/Reference:
Explanation: $3,800. If the stock declined to $0, Bubba would lose $4,000 from having purchased the stock less the $200 premium he received from selling the call option.
NEW QUESTION 198
In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.
If Bubba sells the stock at $45 in July, what is his resulting tax liability for that transaction?
- A. a $400 gain
- B. no liability established until the offsetting option position is closed
- C. a $1,000 gain
- D. a $400 capital loss
Answer: C
Explanation:
Explanation/Reference:
Explanation: a $1,000 gain. There is a $1,000 gain on the stock. The option is a separate capital asset.
NEW QUESTION 199
Which of the following sources provides news of prospective municipal securities sales to underwriters?
- A. the SEC News Digest
- B. the daily Bond Buyer
- C. the Blue List
- D. The Wall Street Journal
Answer: B
Explanation:
Explanation/Reference:
Explanation: the daily Bond Buyer. News is covered in the daily Bond Buyer as well as Munifacts, which is operated by the daily Bond Buyer. The Blue List shows only current offerings, not prospective ones.
NEW QUESTION 200
A management group may serve an investment company as its:
- A. custodian
- B. both A and C
- C. underwriter
- D. investment advisor
Answer: B
Explanation:
both A and C. The custodian must be independent of the investment company.
NEW QUESTION 201
Bubba has a cash account and fails to make full and prompt payment for a purchase. The broker liquidated the transaction. Two weeks later, Bubba places another buy order for 100 shares of XYZ.
What does the broker do?
- A. requires a 25% down payment before executing the order
- B. handles the order after obtaining a promise from Bubba to effect prompt settlement
- C. executes the order at its own risk
- D. refuses the order
Answer: D
Explanation:
refuses the order. Reg T requires that under these circumstances the account must be frozen for 90 days. Any trade prior to that, requires cash in advance.
NEW QUESTION 202
What percentage of maintenance charges and debt service are covered by the rate covenant of a revenue bond issued to finance a municipal toll road?
- A. 75%
- B. 120%
- C. 100%
- D. 150%
Answer: B
Explanation:
120%. The toll facility usually sets rates to cover 120% of maintenance and debt service.
NEW QUESTION 203
Creditors whose claims are not settled upon dissolution of a limited partnership may seek recourse from:
- A. the personal assets of the limited partners
- B. the partnership's income
- C. the general partner's personal assets
- D. the general partner's profits
Answer: C
Explanation:
the general partner's personal assets. When a partnership no longer has assets, but does have debts, creditors may look to the personal property of the general partner.
NEW QUESTION 204
XYZ Corporation earned $2 per share last year and is selling at $20 per share. If it earns $3 per share this year and its price/earnings ratio stays the same, its price will be:
- A. $60
- B. $25
- C. $20
- D. $30
Answer: D
Explanation:
$30. The current P/E is 10. If earnings are $3 and the P/E is still 10, the share price equals $30 ($3 x 10).
NEW QUESTION 205
A buy-in of a customer's sale transaction is mandated if the securities have not been received by the broker/dealer within how many business days following the settlement date:
- A. 0
- B. 1
- C. 2
- D. 3
Answer: A
Explanation:
Explanation/Reference:
Explanation: 10. If a customer fails to deliver securities within ten days after settlement, the broker must repurchase the securities.
NEW QUESTION 206
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How to book FINRA Series 7 Certification Exams
Applicants wishing to take the Series 7 exam must be sponsored by a FINRA member company and FINRA has other Series 7 eligibility requirements. The company must submit a U4 form (uniform registration application in the field of qualifications) to register the candidate for the license exam. FINRA regulates the activities of brokerage firms and registered brokers, ensuring that anyone who sells securities products is qualified and tested.
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