Pass4Test 10%OFF Discount Code

FINRA General Securities Representative Qualification Examination (GS) - Series-7 Exam Questions

QUESTION NO: 1
Limited partnerships try to avoid recapture because:

A. it turns potential capital gains into current taxable income B. it always increases the investor's tax bracket C. it increases the risk of a tax audit D. it may subject the partnership to the add-on tax

Correct Answer: A

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 2
Bubba owns a subordinated debenture in a company that is liquidating.
When will he get paid?

A. after the shareholders of preferred stock B. after the company pays its outstanding bills, but before paying bank loans C. after the bills are paid and the bank is paid, but before the preferred shareholders D. before the holders of secured debt

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 3
In a triple net lease, which of the following is the tenant not responsible for paying?

A. taxes B. insurance premiums C. financing charges D. maintenance

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 4
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

Correct Answer: D

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 5
What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?

A. bucket B. tranche C. tier D. bracket

Correct Answer: B

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 6
Which of the following clients could not open a margin account?

A. a custodian under UGMA B. a corporation C. a husband and wife in a joint account D. an uncovered option writer

Correct Answer: A

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 7
Bubba held one XYZ July 30 listed call option when XYZ split 2 for 1.
What is the resulting position, Bubba has on the Option Clearing Corporation's record?

A. long one XYZ July 30 call B. long two XYZ July 15 calls C. long two XYZ July 30 calls D. long one XYZ July 30 call and short one XYZ July 30 call

Correct Answer: B

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 8
Which of the following receives the highest priority of a municipal bond trustee when applying income and revenue derived from a financed toll facility?

A. operation and maintenance fund B. reserve maintenance fund C. bond service account fund D. renewal and replacement fund

Correct Answer: A

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 9
Regulation A permits a short form of filing for offerings of new securities provided the total amount of the offering does not exceed:

A. $2,000,000 B. $2,500,000 C. $5,000,000 D. $1,000,000

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 10
Which of the following situations is possible for a writer of a covered call option?

A. depositing margin into his account B. buying the underlying stock if the call is exercised C. selling the security, he already owns D. purchasing a put option to hedge against unlimited loss potential

Correct Answer: C

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 11
Bubba opens an account at a broker/dealer with instructions to "transfer and ship". This means that:

A. transactions for Bubba will be transferred to another broker for processing B. securities purchased must be registered in Bubba's name and then delivered to him C. each trade report must note Bubba's certificate registration instructions D. all correspondence to Bubba must be sent registered mail

Correct Answer: B

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 12
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. $12,000 B. $3,000 C. $0 D. $18,000

Correct Answer: B

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).

QUESTION NO: 13
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. ascertains whether the client had a sufficient bank balance on settlement date B. ascertains that extensions had been obtained under Reg T C. decides this situation is acceptable provided payment was received before any securities were sold D. nothing because this is not a violation provided the securities were not listed on the NYSE

Correct Answer: B

Explanation: Only visible for Pass4Test members. You can sign-up / login (it's free).