[Aug 07, 2023] Updates Up to 365 days On Valid Series-7 Braindumps [Q196-Q213] – IT Certification Exam Questions & Answers

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[Aug 07, 2023] Updates Up to 365 days On Valid Series-7 Braindumps

Best QualitySeries-7 Exam Questions FINRA Test To Gain Brilliante Result

The Series-7 certification exam covers a wide range of topics related to the securities industry, including investment products, securities regulations, and client interactions. Series-7 exam consists of 125 multiple-choice questions and has a time limit of 3 hours and 45 minutes. A passing score of 72% is required to obtain the certification.

Q196. Which of the following is true about a customer with a frozen account?

may not trade corporate securities under any circumstances

may make purchases but not sales of corporate securities

must deposit the full purchase cost before an order is executed

must deposit sufficient cash for each transaction no later than the settlement date

must deposit the full purchase cost before an order is executed. A “frozen” account is restricted to full cash payment in advance for any purchase.

Q197. The Bubba Fund is a load mutual fund that offers a reinvestment plan.
What does this mean?

purchasers of fund shares must agree to make regular investments over a period of years

income, dividend, and capital gain distributions may be automatically used to purchase new shares of the fund

holders of fund shares are permitted to regularly purchase additional shares at the bid price

no federal income taxes are paid on dividends and capital gain distributions from the fund

income, dividend, and capital gain distributions may be automatically used to purchase new shares of the fund. The new purchases are at the ask price, not the bid price.

Q198. What is the loan value on a call option held in a customer’s margin account?

50%

30%

the compliment of the FRB initial margin requirement for listed stocks

Explanation/Reference:
Explanation: 0. Options do not have loan value, except for long-term LEAPS.

Q199. Which of the following statements regarding mutual funds is true?

the custodian can also be the transfer agent

the sponsor receives a management fee based on the fund’s total assets

the terms “management company” and “investment advisor” are interchangeable

the management company receives a portion of the sales load for managing the fund assets

Explanation/Reference:
Explanation: the custodian can also be the transfer agent. This has become increasingly common. None of the other choices are correct.

Q200. Which of the following rights does an ADR holder not have?

preemptive rights

the right to vote for your mother-in-law as a board member

the right to transfer ownership

the right to see financial statements

preemptive rights. Holders of ADRs do not have preemptive rights, although they have most other rights of shareholders, including the right to vote for board members-even a mother-in-law

Q201. Bubba entered an order to sell long 100 shares of XYZ at 38.75 stop limit. Thereafter, the following round- lot transactions occurred: 38.75, 38.65, 38.50.
At what price was Bubba’s order executed?

38.75

38.65

38.50

it was never executed

Explanation/Reference:
Explanation: it was never executed. The first transaction at 38.75 elected the order, but since it was both a stop order and a limit order, there was never another transaction at 38.75. Consequently, Bubba’s order was never executed.

Q202. Bubba maintains an individual cash account as well as a joint account with his wife, Bubbette. While Bubba is out of town on a fishing trip, Bubbette calls the brokerage firm with an order to buy 100 shares of Great Company, Inc., at the market value for Bubba individual account. It is a stock Bubba has previously informed the brokerage he wanted to buy at the “right price”.
What does the brokerage do?

refuse to accept the order unless Bubba has provided a signed trading authorization in favor of Bubbette

execute the order as requested

enter the order only after receipt of written instructions to do so from Bubba

buy the stock in the joint account and, after verification from Bubba, journal the security to his individual account

Explanation/Reference:
Explanation: refuse to accept the order unless Bubba has provided a signed trading authorization in favor of Bubbette. Unless Bubbette has been given written trading authorization over Bubba’s account, trading orders cannot be accepted from her or any other person.

Q203. The registration requirements of the federal securities acts are intended to protect the public interest by providing for a prospectus on new issues and its review by the SEC.
Which of the following is the true of this process?

It provides the SEC with adequate information on which to base approval for new issues

It does not imply SEC approval of the issue

It guarantees purchasers against an untrue statement of material fact or an omission of material fact

It relieves participating underwriters from any further responsibility for checking essential facts before recommending purchase to the customers

It does not imply SEC approval of the issue. The SEC does not approval an issue. It only attempts to see that sufficient information has been provided from which a proper investment determination may be made.

Q204. The Bubba Corporation has 900,000 of common outstanding and holds 100,000 shares as treasury stock. At the end of the third quarter $450,000 is distributed as a dividend on the common.
How much is the dividend per share?

$0.45

$0.50

$2.00

$2.22

$0.45. Since treasury stock does not receive dividends, divide $450,000 by the outstanding 100,000 shares to arrive at $0.45 per share.

Q205. Under what circumstances may a municipal securities dealer guarantee a customer against loss in market value of bonds?

under no circumstances

only if the agreement is in writing

only if the bonds are rated AAA or Aaa

only if the bonds are insured

Explanation/Reference:
Explanation: under no circumstances. No guarantees may be made against loss of market value because no one can guarantee the direction of the market. Insured bonds are protected against loss of principal and interest but not against market value depreciation.

Q206. Bubba plans to borrow some money and pledge securities as collateral.
Which of the following can he not use as collateral?

Series EE bonds

US treasury bills

US treasury notes

US treasury bonds

Series EE bonds. Because Series EE bonds are not negotiable, they have no collateral value. They cannot be sold back to the US government.

Q207. Bubba buys “double-barreled” municipal bonds. What is the source of guaranteed repayment on these bonds?

a specific municipal project plus a federal subsidy

two specific municipal projects

all projects of the issuing municipality

one specific municipal project plus the full financial strength of the issuer

one specific municipal project plus the full financial strength of the issuer. Double -barreled bonds are first payable from a specific project, but are further guaranteed by the issuing municipality.

Q208. The initial Federal Reserve Bank margin requirement is set at 60% and Bubba purchases 100 shares of XYZ at $100 per share. He deposits $6,000 of the $10,000 purchase price in his account.
If XYZ increases in value to $150 per share, how much excess equity would Bubba have in his account?

$1,000

$1,500

$2,000

$3,000

$2,000. Bubba started with $6,000 of equity and a debit balance of $4,000. The market value of his XYZ stock increased by $5,000 ($15,000 – $10,000). Therefore, his equity increased to $11,000. Since Bubba only needs 60% equity, his Reg T requirement is $9,000 ($15,000 x 60%). His equity exceeds the requirement by $2,000.

Q209. The cost of maintaining an investment in a mutual fund is best reflected in the:

custodial fee

sales charge

expense ratio

net investment income

expense ratio. Custodial fees are negligible and the sales charge is a one-time expense. The “best” reflection of mutual fund costs is the expense ratio.

Q210. What is the name for the rate of discount from the list price that is paid to a municipal securities underwriting group member for its sales participation?

commission

concession

spread

takedown

Explanation/Reference:
Explanation: takedown. The takedown is an additional allowance on bonds sold by a member.

Q211. Under which of the following conditions are homeowners most likely to refinance existing mortgages?

when interest rates rise

when interest rates fall

when interest rates are stable

when the yield curve is inverted

Explanation/Reference:
Explanation: when interest rates fall. Homeowners are most likely to refinance when rates are lower than the past.

Q212. Which of the following does not appear in a municipal syndicate letter to underwriters?

the specific bid and offering terms of the issue

the amount of each member’s participation

the extent of the manager’s authority in directing the offering

the duration of the syndicate account

Explanation/Reference:
Explanation: the specific bid and offering terms of the issue. The bid and offering terms are determined after the syndicate letter to underwriters.

Q213. In stabilizing a new issue, the manager may make a “syndicate penalty bid”. This means that:

the underwriter will be penalized his profit on any securities repurchased from his clients

all stock purchased will be returned to the issuing corporation

the manager will charge the syndicate the value of the shares

any shares repurchased are added to the treasury stock of the issuing corporation

Explanation/Reference:
Explanation: the underwriter will be penalized his profit on any securities repurchased from his clients.
Since clients sell shares back to the syndicate shortly after the offering, the underwriter has not made a proper distribution. The underwriter therefore may be penalized any profit.

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The Series-7 exam covers a broad range of topics related to the securities industry, including stocks, bonds, options, mutual funds, and other investment products. It is a 225-question multiple-choice exam that is divided into two parts, each of which must be completed within a four-hour time limit. The first part of the exam covers general securities knowledge, while the second part focuses on specific job functions such as customer account handling, securities trading, and investment banking.

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