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Place the following in their proper order in the handling of an order.
I. P & S dept.
III. Margin dept.
IV. Wire room
IV, I, III, II
I, IV, III, II
I, III, II, IV
IV, III, I, II
A new stock issue may begin trading on NASDAQ
as early as the completion of the IPO
following the opening trade on the morning of the effective date
30 days after the effective date
after a 5 business day quiet period
Contributions are permitted to be made to an H.R.10 plan, better known as the Keogh Plan, based upon
full time corporate salary
part time wages as an employee of a partnership
compensation earned as a freelance writer
alimony received as part of a court settlement
A restricted margin account is one in which
the equity has fallen below the minimum maintenance requirement
the equity has fallen below the $2,000 minimum equity requirement
the customer is temporarily prohibited from accessing SMA
the equity is less than Reg. T
Which of the below instruments trades plus accrued?
Zero coupon bonds
Industrial Development Revenue bonds
The Uniform Practice Code of FINRA sets forth requirements regarding deliveries, eligibility for issuer distributions, and a wide variety of rules pertaining to dealer to dealer day to day activities. When it comes to the determination of ex-dividend dates:
the ex dividend date for open-end investment company shares is set by the Board or the principal underwriter of the fund.
the ex dividend date in respect of listed common shares is normally 2 business days prior to the designated record date set by the Board.
the ex-date for stock dividends 25% or greater is normally 1 business day past the payable date.
all of the above
Underwriting compensation in IPOs is subject to a thorough review by FINRA. Finra will make a definitive ruling on the fairness and reasonability of each of the following issue attributes with the exception of:
stock options provided to the underwriting syndicate
the POP (public offering price) of the new shares
cash compensation provided to the underwriting syndicate
none of these are exceptions from FINRA oversight
As the result of a client complaint involving accusations of churning, and allegations of unauthorized trades, a duly qualified panel of arbitrators has heard the case and rendered its ruling against the registered rep on all counts, as well as the branch manager and the member firm for failure to supervise. FINRA rules set forth the normal procedure for the filing of an appeal to the adverse ruling with which of the following?
National Adjudicatory Council
Board of Governors of FINRA
District Business Conduct Committee
none of the above
The most volatile of the money market rates shown below is the:
fed funds rate
call loan rate
SEC Rule 144 restricts sales of control stock by corporate insiders to which of the following limits?
Control stock may be sold without limit so long as the insider has filed Form 144 with the SEC at the time of the sale and the sale is not based upon material non-public information.
Control stock may be sold over a 90 day period in an amount not to exceed the greater of 1% of the issuer’s outstanding shares or the average weekly volume over the 4 week period preceding the sale.
Control stock may be sold over a 90 day period in an amount equal to the lesser of 1% of the issuer’s outstanding shares or the average weekly volume over the 4 week period preceding the sale.
The sale of stock by control persons requires that all sale transactions be effected through a broker/dealer which is a member of the principal exchange on which the stock is traded and the firm may act only in an agency capacity.
One of your customers who is an active trader and is a student of technical analysis has called you to discuss his findings regarding the price action on MMM common. He believes that it is fast approaching its resistance level of 60. If he does not think the stock will break out, which of the below would be most appropriate?
Sell most if not all of his current long position
Place a GTC buy limit order at 61
Place a GTC sell stop order at 60
Sell MMM 60 put options with a 3 month expiration
The stock of which of the following listed corporations is generally considered the most sensitive to interest rate changes?
In anticipation of a weaker dollar, one would expect
US exports to be more competitive
foreign exports to increase
the US trade deficit to grow
none of the above
Which of the following mutual funds would be most suitable for the client seeking stability of capital?
growth and income fund
government bond fund
An investment in United States Treasury bonds may be subject to which of the following taxes?
I. capital gains
II. federal income
III. state income
IV. ad valorem
all of the above
I and III
I and II
Direct institution to institution securities transactions are considered
a violation of the Securities & Exchange Act of 1934
the secondary market
the third market
the fourth market
According to the rules and regulations of the Options Clearing Corporation and the options exchanges, an equity call option may be covered by each of these except:
100 shares of the underlying common stock
cash equal to the aggregate exercise price of the option
a depository receipt for 100 shares of the underlying common stock
none of these are exceptions
The Daily Bond Buyer publishes information about the municipal securities business including the volume of new municipal issues coming to market over the next 30 days. This is referred to as:
the Bond Buyer Index
the new issue calendar
the placement ratio
the visible supply
Uncovered short put exercise results in
acquisition of shares with a resulting cost basis of strike price less premium
liquidation of shares with a resulting sales proceeds of strike price less premium
the potential for unlimited loss
the potential for a maximum loss of strike price plus premium
LMN corporation has 2 million shares authorized, of which 1 million have been issued and there are 100,000 shares of treasury stock on the balance sheet. If the Board declares a dividend of $200,000, the per-share dividend payout would be:
= 22 cents dividend per share.
Rose McGraw has given 1,000 shares of ABC common to her granddaughter under the UGMA regulations. ABC is currently trading at $14 and Rose’s initial cost for the shares nearly a decade ago was $7/share. For taxation purposes, the cost basis and date of acquisition for the granddaughter would be:
$7 cost basis and the date of acquisition is the date of the gift
$14 cost basis and the date of acquisition is the date of the gift
$7 cost basis and the date of acquisition is the donor’s date of purchase
$14 cost basis and the date of acquisition is the date of purchase by the donor
A Eurodollar bond has each of the following characteristics except:
interest payments may be made in either US dollars or the currency of the nation in which the bond was issued.
its interest payments will be made in US dollars only.
these bonds are issued by either US or foreign corporations but are not issued in the United States.
principal is repaid at maturity in US dollars.
Compute the taxable or corporate equivalent yield for a 4.5% GO in the portfolio of an investor in the 36% tax bracket.
Municipal yield divided by (100% minus investor’s tax bracket)
= 4.5% divided by (100% minus 36%)
= 4.5% divided by 64%
The breadth of the market is measured by the
put / call ratio
price / earnings ratio of the S&P 500
daily volume compared to the average daily volume
advance / decline ratio
A margin account customer buys 100 shares of JKS common at 80 and deposits the required Reg. T margin. A week later with JKS at 90, the account has SMA of:
The client’s new equity is $5,000, found by taking CMV minus debit balance = $9,000 minus $4,000.
However, Reg. T only requires equity of 50% of CMV, which on a $9,000 position is a Reg. T required equity of $4,500.
Your client’s equity of $5,000 exceeds Reg. T by $500.
The new equity of $5,000 minus the Reg. T equity of $4,500 = $500.
This $500 is commonly referred to as SMA, and is also called excess equity, also called Reg. T excess, and is also referred to as the client’s ‘line of credit.’