FINRA Series-7 Exam Questions Free Practice Test

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Questions # 31:

Under Regulation T, when must money be deposited to cover requirements for Bubba’s new purchases on margin?

Options:

no later than the fifth business day after the trades

no later than the seventh business day after the trades

on the day of the trades

on the next business day following the trades

Expert Solution

Questions # 32:

In a 401(k) plan, when are employee’s contributions of compensation deferral vested?

Options:

after 2 years

immediately

after 5 years

the same as the employer’s contributions

Expert Solution

Questions # 33:

Which of the following statements incorrectly describes US securities markets?

Options:

a capital market comprised of long-term debt and equity issues

a money market comprised of short-term debt and equity issues

a municipal market comprised of tax-exempt issues of state and local governments

a government and agency market comprised of both short-term and long-term debt issues

Expert Solution

Questions # 34:

What does the following mean when printed on the stock exchange ticker tape?

Options:

one hundred shares of MST traded on the exchange and appear out of order on the tape

trading was suspended on MST pending dissemination of news

the last sale of MST was for 100 shares at 98.25

the preceding transaction in MST was two or more points different than 98.25

Expert Solution

Questions # 35:

In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.

If the option expires without being exercised, how is the premium expense treated by Bubba?

Options:

as a $600 capital loss

as a $600 capital gain

$600 is added to his acquisition cost for the stock

$600 is held in abeyance until the stock is eventually sold

Expert Solution

Questions # 36:

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?

Options:

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

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

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

ascertains that extensions had been obtained under Reg T

Expert Solution

Questions # 37:

Which of the following securities has the highest amount of market risk?

Options:

US treasury bills

US treasury certificates

US treasury notes

savings bank deposits

Expert Solution

Questions # 38:

Which of the following is not true about brokerage accounts?

Options:

in a community property state, a married woman must open a brokerage account with her husband

stock purchased in a custodian account may not be purchased on margin or held in bearer form

numbered accounts are permissible provided there is a record kept on file at the brokerage firm attesting to the actual ownership

if a fiduciary intends to buy stocks in a margin account the trust agreement authorizing the margin transactions must be kept on file at the brokerage firm

Expert Solution

Questions # 39:

A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.

How many rights will the corporation distribute to its shareholders?

Options:

one million

six million

ten million

sixteen million

Expert Solution

Questions # 40:

Distribution from an IRA can begin at age 59½ and must begin by age:

Options:

70½

whenever the individual is retired

Expert Solution

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