FINRA-SERIES-7 Online Practice Questions and Answers

In comparing the premium cost of a LEAPS option with a premium of a traditional option on the same security and same strike price, which of the following is generally true?

A. the premiums will be approximately the same

B. the LEAPS premium will be higher than the traditional option premium

C. the premium for the traditional option will be higher than the LEAPS option premium

D. LEAPS premiums do not consider time value

Which of the following is not an attribute of US treasury bills?

A. an unusually high degree of liquidity

B. always sells at a discount to face value

C. is most often issued with three-month, six-month, and one-year maturities

D. interest is exempt from federal income taxes

Big Guns Municipal Bond Dealer Corporation buys 100M of 7% 20-year GO bonds at par. The bonds are marked up and immediately re-offered for sale. Which of the following re-offering prices would probably be deemed excessive?

A. 6.8% net

B. 6.9% less 0.5

C. $100.75

D. 5.00% net

Municipal bond brokers generally conduct the following:

A. trade for dealer banks

B. trade for non-bank dealers

C. trade for their own account

D. both A and B

Bubba is long spot Canadian dollars at 0.7400. If he wants to buy one put option on Canadian dollars with a strike price of 74 and a cost of $0.35, what is Bubba's breakeven price for Canadian dollars?

A. 0.4900

B. 0.7365

C. 0.7400

D. 0.7435

Under which of the following was SIPC established?

A. Securities Act of 1933

B. Securities Exchange Act of 1934

C. Securities Investor Protection Act of 1970

D. Securities Exchange Reform Act of 1975

A revenue bond is issued by a state agency. The state legislature is granted authority to apportion money to support the debt services if necessary, but is not legally obligated to do so. What type of bond is this?

A. limited tax

B. double-barreled

C. Series 8

D. moral obligation

What is the maximum amount of gift to customers or other individuals related to the securities business that a registered representative is permitted to give?

A. $500

B. $200

C. $100

D. $50

Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed: 100 ABC $30 200 XYZ $70 200 QBB $40 200 KKK $25 Total market value = $30,000 Debit balance in the account = $12,000 Net equity balance of the account = $18,000

If Bubba wants to buy 100 shares of DUM at $30 per share, how much additional money must be deposited?

A. $3,000

B. $1,500

C. $2,000

D. $0

Which of the following activities by a limited partner may subject the partner to unlimited liability?

A. participating in management of the partnership

B. committing the partnership in any manner

C. making loans beyond those specified in the partnership agreement

D. all of the above