FINRA-SERIES-7 Online Practice Questions and Answers

A four-letter symbol assigned to an issue is characteristic of an equity security that is:

A. authorized for inclusion in the NASDAQ system

B. listed on the NYSE

C. admitted to unlisted trading privileges on a regional stock exchange

D. trading in less than 100-share units on the American Stock Exchange

Which of the following is an analyst most likely to classify as a defensive issue?

A. the securities of a company that airplanes to the military

B. a stock of a large company

C. the common stock of a utility company

D. a corporate bond

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

What is Bubba's excess equity in the account?

A. $3,000

B. $18,000

C. $12,000

D. $0

Which of the following stock exchanges is not registered with the SEC?

A. Pacific Stock Exchange

B. Boston Stock Exchange

C. Chicago Stock Exchange

D. all are registered

Bubba Corporation issued bonds that pay interest on January 15 and July 15 each year until maturity. An investor purchasing these bonds on Monday, April 12, must pay the contract price plus accrued interest for: A. 87 days

B. 89 days

C. 93 days

D. 90 days

An investment company acting as a conduit in the distribution of net investment income, pursuant to IRS rules, is called:

A. balanced

B. diversified

C. regulated

D. dual-purpose

Initial margin deposit minimum requirements are set by the:

A. NYSE

B. FINRA

C. FRB

D. FDIC

Which of the following is not a characteristic of treasury bills?

A. they are quoted on yield-to-maturity percentages

B. their payments are exempt from state income tax

C. the bid price is higher than the offer price

D. they mature one to three years from the date of issuance

In a monthly review of customer statements, Bubba notices that one of his firm's clients has paid for seven purchases five days late. What does he do?

A. decides this situation is acceptable provided payment was received before any securities were sold

B. ascertains whether the client had a sufficient bank balance on settlement date

C. nothing because this is not a violation provided the securities were not listed on the NYSE

D. ascertains that extensions had been obtained under Reg T

Under the terms of the 1970 Securities Investor Protection Act, what is the status of a customer whose account assets exceed SIPC insurance coverage when his broker/dealer becomes insolvent?

A. the US Treasury is pledged to make up the deficiency

B. all broker/dealers are assessed to fully satisfy the deficiency

C. the customer becomes a general creditor of the insolvent firm for the amount of deficiency

D. SIPC will issue a debenture to guarantee eventual repayment of the deficiency

Bubba's order to purchase investment company shares must be executed at a price based upon the net asset value of the shares:

A. next computed after receipt of the order by the dealer

B. last computed before receipt of the order by the dealer

C. computed the previous day at the close of the NYSE

D. computed the same day the order is received by the dealer

Smart Guys Securities Corporation has given a workable bid to Better Guys Securities Corporation. If market conditions change, Smart Guys may:

A. not change the bid

B. not change the bid unless first notifying the other dealer

C. change the bid only with prior approval of the other dealer

D. change the bid

In a triple net lease, which of the following is the tenant not responsible for paying?

A. taxes

B. financing charges

C. insurance premiums

D. maintenance

Which of the following securities is traded only in the over-the-counter market?

A. corporate bonds

B. preferred stocks

C. open-end investment companies

D. closed-end investment companies

The Bubba Insurance Company is not incorporated. It consists of Bubba and his two brothers as general partners, who maintain an active securities account in the name of the company. If one of the partners should suddenly die, what course of actions should be undertaken by the registered representative at the brokerage?

A. freeze the account from further activity until a death certificate and new partnership agreement are furnished to the brokerage

B. no special action is required because the death of a single partner does not terminate the partnership agreement

C. distribute the assets in the account to the surviving partners

D. execute sell orders but do not accept buy orders or distribute assets from the account until a new partnership agreement is provided to the brokerage