100% Real Series-7 dumps - Brilliant Series-7 Exam Questions PDF
Series-7 Exam PDF [2023] Tests Free Updated Today with Correct 402 Questions
NEW QUESTION # 179
Under an initial federal requirement of 70% equity, Bubba purchases 100 shares of XYZ at $40 per share and wishes to satisfy the margin call by delivering another listed security into his account.
He may do so by depositing stocks with a market value of:
- A. $2,800
- B. 4,000
- C. $9,333
- D. $5,714
Answer: C
Explanation:
$9,333. If Bubba were depositing cash, he would need $2,800 (70% x $4,000). Since he is depositing stock, he would have to deposit enough with loan value of $2,800. To arrive at this, divide $2,800 by the 30% loan value to obtain $9,333.
NEW QUESTION # 180
Bubba sells 100 shares of XYZ short at $58 and buys 1 XYZ Mar 60 Call at $3.
What is the customer's maximum loss?
- A. $5,500
- B. unlimited
- C. $500
- D. $100
Answer: C
Explanation:
$500. Bubba sold short at $58. The call with a strike price of 60, gives him the right to buy back the stock at $60. If the stock rises, the call can be used to limit the loss to 2 points. Bubba can lose $200 on the stock. Bubba also paid a $300 premium. Loss potential is $500.
NEW QUESTION # 181
When an index option is exercised, settlement is made by:
- A. cash
- B. delivery of a futures contract
- C. any of the above
- D. delivery of the underlying securities
Answer: A
Explanation:
Explanation/Reference:
Explanation: cash. Index options are settled by payment of cash.
NEW QUESTION # 182
Bubba buys a ten-year municipal and at 102 and sells it five years later at 101.
What is tax treatment?
- A. no capital loss or income deduction is realized
- B. a $10 long-term capital loss is realized
- C. the $10 loss is applied as a reduction against ordinary income
- D. the $10 loss is applied against future profits in municipal securities
Answer: A
Explanation:
Explanation/Reference:
Explanation: no capital loss or income deduction is realized. The $20 premium is amortized over the ten- year life of the bond. After five years, half of the premium has been written down. The remaining premium is the same as the premium received upon selling the bond. The sale at 101 results in no loss or gain.
NEW QUESTION # 183
A new stock offering by Bubba Corporation provides details that state between 1,000,000 and 1,500,000 shares will be sold depending upon market conditions. This offering is a:
- A. best efforts
- B. market potential
- C. mini-max
- D. standby
Answer: C
Explanation:
Explanation/Reference:
Explanation: mini-max. These offerings state the minimum and maximum number of shares offered.
NEW QUESTION # 184
Bubba owns a subordinated debenture in a company that is liquidating.
When will he get paid?
- A. after the company pays its outstanding bills, but before paying bank loans
- B. after the bills are paid and the bank is paid, but before the preferred shareholders
- C. after the shareholders of preferred stock
- D. before the holders of secured debt
Answer: B
Explanation:
after the bills are paid and the bank is paid, but before the preferred shareholders. As a creditor, Bubba is paid before any of the shareholders. But his position is subordinated to other creditors, like the bank and accounts payable.
NEW QUESTION # 185
A typical money market instrument carries which of the following?
- A. long-term maturity date
- B. medium-term maturity date
- C. serial bond maturity date
- D. short-term maturity date
Answer: D
Explanation:
Explanation/Reference:
Explanation: short-term maturity. A money market maintains liquidity and is defined as having maturity of less than one year.
NEW QUESTION # 186
Under which of the following was SIPC established?
- A. Securities Investor Protection Act of 1970
- B. Securities Exchange Reform Act of 1975
- C. Securities Act of 1933
- D. Securities Exchange Act of 1934
Answer: A
Explanation:
Securities Investor Protection Act of 1970. SIPC was established under this act.
NEW QUESTION # 187
Bubba Corporation has net income of $4,200,000. It has 100,000 outstanding shares of 8% preferred stock ($100 par value) and 400,000 shares of common stock ($10 par value).
What are the earnings per share of common stock?
- A. $4.20
- B. $8.50
- C. $10.50
- D. $6.00
Answer: B
Explanation:
Explanation/Reference:
Explanation: $8.50. Subtract the preferred dividend of $800,000 (100,000 x 8% x 100) from the net income.
Divide the result of $3,400,000 ($4,200,000 - $800,000) by the 400,000 common shares to obtain $8.50.
NEW QUESTION # 188
Bubba is buying a treasury bill. The discount he receives results in Bubba's determination of:
- A. rate of return
- B. nominal yield
- C. face value
- D. yield to call
Answer: A
Explanation:
rate of return. Because T-bills pay no interest, Bubba's rate of return is the discount as a percentage of the face value he receives at maturity.
NEW QUESTION # 189
Under Regulation T, when must money be deposited to cover requirements for Bubba's new purchases on margin?
- A. no later than the fifth business day after the trades
- B. on the day of the trades
- C. no later than the seventh business day after the trades
- D. on the next business day following the trades
Answer: A
Explanation:
Explanation/Reference:
Explanation: no later than the fifth business day after the trades. Bubba should pay up no later than the fifth business day.
NEW QUESTION # 190
An offering price of 102 plus accrued interest applies to which of the following securities?
- A. certificates of deposit
- B. treasury bills
- C. banker's acceptances
- D. commercial paper
Answer: A
Explanation:
Explanation/Reference:
Explanation: certificates of deposit. CDs trade with "accrued interest" as part of the price.
NEW QUESTION # 191
A trust instrument drawn pursuant to the Trust Indenture Act of 1939 sets forth which of the following?
- A. both B and C
- B. the rights of stockholders
- C. the duties of the trustee
- D. the obligations of the issuing corporation
Answer: A
Explanation:
Explanation/Reference:
Explanation: both B and C.
A trust indenture does both of these but does not define the rights of stockholders.
NEW QUESTION # 192
Bubba buys municipal bonds with a $100,000 principal amount at 89 on margin. His account has no cash or securities.
What is his minimum required deposit?
- A. $13,350
- B. $50,000
- C. $22,500
- D. $5,080
Answer: A
Explanation:
$13,350. Munis are not subject to Reg
T. The NYSE maintenance requirement on munis is the greater of 15% of the market value or 7% of the principal amount.
NEW QUESTION # 193
In a 401(k) plan, when are employee's contributions of compensation deferral vested?
- A. the same as the employer's contributions
- B. after 5 years
- C. after 2 years
- D. immediately
Answer: D
Explanation:
immediately. The employer's contributions may be subject to a vesting schedule, but the employee's contributions are immediately vested.
NEW QUESTION # 194
A basis point is:
- A. 0.01%
- B. 0.10%
- C. 1.00%
- D. 0.001%
Answer: A
Explanation:
Explanation/Reference:
Explanation: 0.01%. A basis point is one-hundredth of a point. Since a point is 1%, a basis point is 0.01%.
A bond price change of one basis point is ten cents ($1,000 x 0.01%).
NEW QUESTION # 195
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The FINRA Series-7 (General Securities Representative Qualification Examination) Certification Exam is a comprehensive test that is designed to assess the knowledge and skills of individuals who are interested in pursuing a career in the securities industry. This exam is administered by the Financial Industry Regulatory Authority (FINRA), which is a non-profit organization that regulates the securities industry in the United States. The Series-7 exam is a prerequisite for individuals who want to become a registered representative or a stockbroker.
Verified & Correct Series-7 Practice Test Reliable Source Jun 15, 2023 Updated: https://actualtests.crampdf.com/Series-7-exam-prep-dumps.html