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Series 7 STC Exam Questions with correct answers
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Series 7 STC Exam Questions with correct answers
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Series 7 STC Exam QuestionsWhen an arbitrator has decided to expunge (remove) customer dispute-related information from the
Central Registry Depository (CRD): - correct answer ✔✔it's permanently deleted and not available to the
public, regulators, or prospective employers
The market price for a closed-end investment company is based upon: - correct answer ✔✔supply and
demand for the shares in the marketplace. A closed-end investment company share may sell at, above,
or below its net asset value.
What type of bond is issued as a municipal bond and qualifies as a private activity bond, but may not
provide tax-exempt interest to certain investors? - correct answer ✔✔AMT bond
required to pay tax on the interest received from a private activity bond. The AMT rules are enacted to
ensure that higher income individuals pay a specified minimum amount of tax
Which of the following is generally the largest portion of an underwriting spread? - correct answer
✔✔Selling concession
If securities are received as a gift, how is the cost basis determined? - correct answer ✔✔It's the lesser
of the market value or the donor's cost basis.
FINRA's website address must be provided to each customer: - correct answer ✔✔Annually
For individual investors, the interest derived from state-issued municipal bonds is exempt from federal
income tax. The investor may be subject to state income tax; however: - correct answer ✔✔It depends
on the tax status of the investor's home state
The Jumpstart Our Business Startups (JOBS) Act established: - correct answer ✔✔the rules for small
businesses to raise capital using the internet through a process that's referred to as crowdfunding. Funds
can only be received through an SEC-registered funding portal that's established by a FINRA member.
Funds cannot be sent directly to the broker-dealer or the issuer.
, All margin accounts are required to have their values calculated at the close of trading on each business
day. This procedure is referred to as: - correct answer ✔✔Marking-to-the-market
As a result of falling interest rates, a significant number of bonds that are held by a bond fund have been
called. Rather than reinvesting money, the fund has distributed the proceeds to its shareholders as a
return of capital. How will this distribution be taxed to the shareholders? - correct answer ✔✔It's not
taxed since it's a return of cost basis.
Both a wash sale and a bond tax swap involve an investor selling a bond for a loss, then repurchasing
another bond to replace it. The bond tax swap allows an investor to - correct answer ✔✔deduct her loss;
however, the wash sale rule (if triggered) disallows the loss and doesn't allow the loss to be deducted. In
order to avoid the wash sale rule, an investor must repurchase a bond with material differences (e.g., a
different interest rate and/or maturity date).
Clients who want to reduce their tax liability may invest in which of the following? - correct answer
✔✔Traditional IRAs and limited partnerships
What information would NOT need to be disclosed by a broker-dealer in a research report?
-The broker-dealer received compensation for assisting the company in an acquisition
-The analyst provided a target price for the company
-The analyst is a director of the company
-The analyst had owned shares in the company one year before writing the report - correct answer ✔✔-
The analyst had owned shares in the company one year before writing the report
A broker-dealer is not required to respond to complaints that are delivered: - correct answer ✔✔Orally
In order to achieve capital growth, a customer may consider which of the following investments?
-Preferred stock and utility stock
-Covered calls and long straddles
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