FINRA-SERIES-7 Online Practice Questions and Answers

What type of mutual fund would invest in equities and bonds?

A. dual purpose

B. balanced

C. technology

D. growth

What is the loan value on a call option held in a customer's margin account?

A. 0

B. 50%

C. 30%

D. the compliment of the FRB initial margin requirement for listed stocks

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. $5,080

B. $13,350

C. $22,500

D. $50,000

Bubba owns 200 shares of XYZ at $90, and wishes to hedge the position while generating income. What is the best recommendation?

A. sell calls

B. sell puts

C. buy calls

D. buy puts

A limit order is best describes as an order:

A. to buy at a specific price or lower

B. to sell at a specific price or higher

C. to be executed at a specific price or better

D. that is in effect for only one day

A case of leverage is:

A. selling common stock short and buying warrants for the equivalent number of shares followed by subscribing to the shares and covering the short

B. borrowing at 6% and investing the funds at 10%

C. buying stock on the NYSE and later selling it the same day on the CBOE

D. redeeming a convertible bond before maturity

Bubba Corporation owes income tax. Which of the following may be tendered at par value for payment of the tax?

A. term bond

B. tax anticipation bill

C. special tax bond

D. pre-issue bond

Which of the following would not be subject to the holding period restrictions under Rule 144?

A. restricted stock acquired via investment letter

B. restricted stock acquired via stock options plan

C. restricted stock acquired via private placement

D. restricted stock acquired via open market purchase

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. standby

C. mini-max

D. market potential

Which of the following is not an investment company within the terms of the Investment Company Act of 1940?

A. a holding company dealing in mineral leaseholds

B. a face-amount certificate company

C. a unit investment trust company

D. a management company