FINRA SERIES 7 EXAM FULL
PACK 2025 QUESTIONS AND
ANSWERS
STRIPS may be attractive to investors for which of the following reasons?
A. They offer semi-annual interest payments
B. The securities are tax-free until they mature
C. They carry almost no reinvestment risk
D. They are offered at only a 20 year maturity which is a maturity that is not offered by
traditional Treasury securities - ANSWER✔✔-C. They carry almost no reinvestment
risk
The Alternative Minimum Tax (AMT):
A. Adds back in certain "tax preference items" that are deducted for purposes of regular
income tax
B. Is designed to ensure that residents of states with high taxes do not pay more tax as a
percentage of income than residents of states with lower taxes
C. Affects both corporate and individual income tax
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,D. Requires affected taxpayers to calculate their income tax in two ways and pay the
lower amount - ANSWER✔✔-A. Adds back in certain "tax preference items" that are
deducted for purposes of regular income tax
A wash sale occurs when:
A. Contemporaneous purchases are made for the same security
B. A sale of a security at a capital loss occurs fewer than 30 days prior to the purchase of
the same or a similar security
C. Any sale of a security occurs within 30 days of a purchase of the same or a similar
security
D. An investor reports capital gains and losses for securities issued by the same
company in the same tax year - ANSWER✔✔-B. A sale of a security at a capital loss
occurs fewer than 30 days prior to the purchase of the same or a similar security
403(b) plans are available to the following groups of people:
I. Government employees
II. Employees of public educational institutions
III. Employees of nonprofit organizations
IV. Self-employed individuals
A. II and III
B. I and II
C. I and IV
D. III and IV - ANSWER✔✔-A. II and III
The writer of a put has:
A. The right to sell
B. The obligation to buy
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,C. The obligation to sell
D. The right to buy - ANSWER✔✔-B. The obligation to buy
Marilyn writes an ABC Aug20 put @ 4. What is the maximum amount she could lose on
this option?
A. $2,000
B. $1,600
C. Unlimited
D. $400 - ANSWER✔✔-B. $1,600
For a call option, the strike price is:
A. The market value of the underlying security at which the option must be exercised
B. The price at which the call holder can buy the underlying security from the call
writer
C. The price at which the call writer must buy the underlying securities from the call
holder
D. The breakeven point for the holder of the option - ANSWER✔✔-B. The price at
which the call holder can buy the underlying security from the call writer
An interval fund is a type of investment company that is:
A. Redeemable at any time
B. Must be purchased in periodic intervals
C. Highly liquid
D. Legally classified as a closed-end fund - ANSWER✔✔-D. Legally classified as a
closed-end fund
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, Interval funds are a type of investment company that offers higher yields but permits
shareholders to sell their shares only at specific time periods or "intervals." Legally
classified as a closed-end fund, interval funds share characteristics with mutual funds
such as the fact that there is no trading or secondary market for interval funds; instead
shares must be purchased and sold (redeemed) with the fund. An investment in an
interval fund is much less liquid than shares in other types of investment companies,
such as mutual funds, closed-end funds, and ETFs.
Which of the following would you be the least interested in looking at to analyze a
revenue bond?
A. Flow of funds
B. Net overall debt per capita
C. Protective covenants
D. Feasibility study - ANSWER✔✔-B. Net overall debt per capita
A corporate bond has a coupon rate of 2.75%. What is the amount of a single
semiannual interest payment?
A. $13.75
B. $27.50
C. $275.00
D. $137.50 - ANSWER✔✔-A. $13.75
Joanna is a registered representative who works from her vacation home occasionally.
What is the maximum number of business days she can work from her vacation home
without it being classified as a branch office?
A. Less than 50
B. Less than 20
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
PACK 2025 QUESTIONS AND
ANSWERS
STRIPS may be attractive to investors for which of the following reasons?
A. They offer semi-annual interest payments
B. The securities are tax-free until they mature
C. They carry almost no reinvestment risk
D. They are offered at only a 20 year maturity which is a maturity that is not offered by
traditional Treasury securities - ANSWER✔✔-C. They carry almost no reinvestment
risk
The Alternative Minimum Tax (AMT):
A. Adds back in certain "tax preference items" that are deducted for purposes of regular
income tax
B. Is designed to ensure that residents of states with high taxes do not pay more tax as a
percentage of income than residents of states with lower taxes
C. Affects both corporate and individual income tax
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,D. Requires affected taxpayers to calculate their income tax in two ways and pay the
lower amount - ANSWER✔✔-A. Adds back in certain "tax preference items" that are
deducted for purposes of regular income tax
A wash sale occurs when:
A. Contemporaneous purchases are made for the same security
B. A sale of a security at a capital loss occurs fewer than 30 days prior to the purchase of
the same or a similar security
C. Any sale of a security occurs within 30 days of a purchase of the same or a similar
security
D. An investor reports capital gains and losses for securities issued by the same
company in the same tax year - ANSWER✔✔-B. A sale of a security at a capital loss
occurs fewer than 30 days prior to the purchase of the same or a similar security
403(b) plans are available to the following groups of people:
I. Government employees
II. Employees of public educational institutions
III. Employees of nonprofit organizations
IV. Self-employed individuals
A. II and III
B. I and II
C. I and IV
D. III and IV - ANSWER✔✔-A. II and III
The writer of a put has:
A. The right to sell
B. The obligation to buy
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
,C. The obligation to sell
D. The right to buy - ANSWER✔✔-B. The obligation to buy
Marilyn writes an ABC Aug20 put @ 4. What is the maximum amount she could lose on
this option?
A. $2,000
B. $1,600
C. Unlimited
D. $400 - ANSWER✔✔-B. $1,600
For a call option, the strike price is:
A. The market value of the underlying security at which the option must be exercised
B. The price at which the call holder can buy the underlying security from the call
writer
C. The price at which the call writer must buy the underlying securities from the call
holder
D. The breakeven point for the holder of the option - ANSWER✔✔-B. The price at
which the call holder can buy the underlying security from the call writer
An interval fund is a type of investment company that is:
A. Redeemable at any time
B. Must be purchased in periodic intervals
C. Highly liquid
D. Legally classified as a closed-end fund - ANSWER✔✔-D. Legally classified as a
closed-end fund
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, Interval funds are a type of investment company that offers higher yields but permits
shareholders to sell their shares only at specific time periods or "intervals." Legally
classified as a closed-end fund, interval funds share characteristics with mutual funds
such as the fact that there is no trading or secondary market for interval funds; instead
shares must be purchased and sold (redeemed) with the fund. An investment in an
interval fund is much less liquid than shares in other types of investment companies,
such as mutual funds, closed-end funds, and ETFs.
Which of the following would you be the least interested in looking at to analyze a
revenue bond?
A. Flow of funds
B. Net overall debt per capita
C. Protective covenants
D. Feasibility study - ANSWER✔✔-B. Net overall debt per capita
A corporate bond has a coupon rate of 2.75%. What is the amount of a single
semiannual interest payment?
A. $13.75
B. $27.50
C. $275.00
D. $137.50 - ANSWER✔✔-A. $13.75
Joanna is a registered representative who works from her vacation home occasionally.
What is the maximum number of business days she can work from her vacation home
without it being classified as a branch office?
A. Less than 50
B. Less than 20
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
