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Series 7 Final Exam 4 questions well answered rated A+
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Series 7 Final Exam 4 questions well answered rated A+
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Series 7 Final Exam 4A Form 3 must be filed:
AWithin two business days of the date on which a director buys or sells securities
BWithin 10 days of becoming a director
CWithin two business days of becoming a director
DWithin 10 days of the date on which a director buys or sells securities - correct answer ✔✔B
A person must file Form 3 with the SEC within 10 days of becoming an insider. An insider is defined as
any director or officer of a corporation or any person with beneficial ownership of more than 10% of
issuer's equity securities. Form 4 must be filed within two business days of the date on which an insider
changes his ownership position (i.e., buys or sells).
A company currently has $125,000,000 of 3 1/4% convertible bonds. The company is going to offer
bondholders $125,000,000 of 3 1/4% nonconvertible bonds plus cash of $15,000,000 for the convertible
bonds. How will this transaction, if successful, affect the company's financial status?
AIt will reduce the cash position and the potential dilutive effect on the common stock
BIt will reduce the cash and debt position and reduce the potential dilutive effect on the common stock
CIt will increase the cash position and reduce the potential dilutive effect on the common stock
DIt will reduce the cash position and increase the debt position - correct answer ✔✔A
The effect of the transaction will be to reduce the cash position and the potential dilutive effect on the
common stock. The company is paying out cash and is also issuing nonconvertible bonds in place of
convertible bonds (which could have been converted into common stock). This will reduce the cash
position and the potential dilutive effect on the common stock.
An equity fund invests in the stocks of companies whose earnings are projected to increase greatly over
the next 10 years. This is an example of a:
,AFund of funds
BBalanced fund
CValue fund
DGrowth fund - correct answer ✔✔D
Growth funds invest in the stocks of companies whose earnings are projected to grow at a more rapid
rate than those of other companies.
Confirmations on regular-way transactions must be sent to customers no later than the:
ASettlement date
BBusiness day following the trade date
CCompletion of the transaction
DTrade date - correct answer ✔✔C
SEC Rule 10b-10 requires that confirmations on regular-way transactions be sent to customers at, or
prior to, the completion of the transaction. This is usually, but not always, the settlement date.
A direct participation program in undeveloped land is considered:
ADepreciable
BIncome-oriented
CConservative
DSpeculative - correct answer ✔✔D
A direct participation program in undeveloped land is considered speculative. (72257)
Promotional material made available to the public may compare collateralized mortgage obligations
(CMOs) to:
,ANo other investment product
BFDIC-insured certificates of deposit
CTreasury securities
DCorporate bonds backed by fixed assets - correct answer ✔✔A
Any type of promotional communication made available to customers may not compare CMOs to any
other security. This is due to the uniqueness of this product.
During an inflationary period when interest rates are rising, the market value of existing bonds would:
ARemain stable
BFluctuate
CDecrease
DIncrease - correct answer ✔✔C
Interest rates and bond prices have an inverse (opposite) relationship. As interest rates rise, bond prices
decrease. Therefore, in an inflationary period where interest rates are rising, the market value of existing
bonds will decrease.
The MOST appropriate buyer(s) for a variable life insurance policy is/are:
AA person with an understanding of investments who can tolerate market risk
BA person who requires the discipline of forced savings
CParents with a modest income who have young children
DA person who wants the assurance of a guaranteed cash value - correct answer ✔✔A
Similar to a variable annuity, the cash value of a variable life insurance policy increases or decreases in
relation to the performance of the separate account. A person who is knowledgeable about investments
may be a candidate for variable life insurance because common stock and bonds are the foundation of
the policy. As the market values of the securities fluctuate, the cash value changes and is not guaranteed.
, Therefore, the insured must be able to tolerate market risk. There are other methods by which an
investor may achieve forced savings and the product may not be suitable for parents with a modest
income who have young children. (73450)
A client redeems shares of a mutual fund. According to current regulations, a check must be sent within
how many days of submitting a redemption notice?
A5 days
B15 days
C7 days
D10 days - correct answer ✔✔C
Federal regulation requires that an individual receive payment for the redemption of a mutual fund
within seven days.
Drysdale Securities has sent a third-party research report on Clinkscale Corporation to clients. Which of
the following items is NOT a required disclosure?
AA three-year price chart covering Drysdale recommendations
BWhether Drysdale owns 1% or more of outstanding shares
CWhether Drysdale makes a market in Clinkscale
DWhether Drysdale managed or comanaged an offering - correct answer ✔✔A
Third-party research has been prepared at the request of the brokerage firm (Drysdale Securities) and is
distinct from independent third-party research. Third-party research must contain the disclosures that
would apply had the member (Drysdale Securities) prepared the report. However, a price chart is not
included within these required disclosures. Third-party research must include the following
disclosures.Whether the broker-dealer received compensation from the subject company within the
preceding 12 months, or expects to receive compensation in the upcoming 3 months, for investment
banking services related to the subject companyWhether the broker-dealer makes a market in the
subject companyWhether the broker-dealer owns 1% or more of the equities in the subject companyAny
other material conflicts of interest
Independent third-party research has not been prepared at the request of the broker-dealer. Had this
been the case, disclosures of Drysdale's activities in Clinkscale would not have been required.
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