Series 7 - Final Exam 1 2025
Questions and Answers
Prospectus for a variable annuity contract - ANSWER✔✔-1. Must be filed with the SEC
2. May be delivered electronically
3. Must provide full and fair disclosure
4. Must detail all sales charges and ongoing expenses of the contract
The subscription agreement for a limited partnership does NOT specify: -
ANSWER✔✔-Priority provisions for liquidation.
General Partner signs the subscription agreement.
Sub agreement states suitability standards, who must sign, who check must be made
payable to.
Priority provisions for liquidation are found in the Certificate of Limited Partnership.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,Business Development Company - ANSWER✔✔-raises capital by selling securities to
investors and is similar in structure to a closed-end investment company.
Use money it raises to invest mostly in private, small companies, financially troubled
companies.
Help these companies by providing funding when they may not be able to raise capital
for themselves.
Trade on an exchange, liquid, not taxed if they distribute at least 90% of income to
investors.
Current Income and Capital Appreciation, invest in both debt and equity.
Similar to buying a publicly traded investment in a private equity firm.
An Operations Professional receives a written complaint from a customer which states
that she recently received two statements. The first statement shows a significant
decline in the value of her portfolio, while the second statement corrects errors to
indicate an appreciation in the value of her portfolio. The customer suspects that the
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
,second statement was artificially created. This complaint should be: - ANSWER✔✔-
Written complaints alleging theft, misappropriation of funds or securities, or forgery
are among events that trigger a requirement to submit a report to FINRA within 30 days
of discovery.
This situation involves the potential forgery of customer statements and trigger the
filing of a report.
Lyle, Molly, and Seena have a joint account registered as Tenants in Common. In the
event that Seena dies, which of the following statements is TRUE? - ANSWER✔✔-
Seena's estate has a claim on her portion of the account's assets.
BD freeze account, executor will provide documentation to establish authority to act on
behalf of the estate. Estate become third owner in the existing Tenants in Common
arrangement.
A client with an options account takes the following position: Long GHI Nov 65 puts
and Short GHI Nov 55 puts. Which of the following statements is TRUE regarding this
position? - ANSWER✔✔-Position will be profitable if the market price of the security
declines.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, Debit Put Spread.
Cost to purchase a put with a higher strike price is more than the amount received for
selling a put with a lower strike price.
Investor will make money if stock declines since the long put will be exercised first
(higher strike)
Higher strike price will always be more valuable than a put with a lower strike price.
Profitable between 65-55, below 55.
A broker who transacts an order for a customer must send a confirmation disclosing all
of the following information, EXCEPT: - ANSWER✔✔-If it acted as principal and that it
prepares research on the security.
Must disclose if BD acted as an agent for customer and third party and Yield
Computation.
When evaluating convertible bonds and the common stock to which it may be
converted, which of the following situations would produce a profitable arbitrage
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
Questions and Answers
Prospectus for a variable annuity contract - ANSWER✔✔-1. Must be filed with the SEC
2. May be delivered electronically
3. Must provide full and fair disclosure
4. Must detail all sales charges and ongoing expenses of the contract
The subscription agreement for a limited partnership does NOT specify: -
ANSWER✔✔-Priority provisions for liquidation.
General Partner signs the subscription agreement.
Sub agreement states suitability standards, who must sign, who check must be made
payable to.
Priority provisions for liquidation are found in the Certificate of Limited Partnership.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,Business Development Company - ANSWER✔✔-raises capital by selling securities to
investors and is similar in structure to a closed-end investment company.
Use money it raises to invest mostly in private, small companies, financially troubled
companies.
Help these companies by providing funding when they may not be able to raise capital
for themselves.
Trade on an exchange, liquid, not taxed if they distribute at least 90% of income to
investors.
Current Income and Capital Appreciation, invest in both debt and equity.
Similar to buying a publicly traded investment in a private equity firm.
An Operations Professional receives a written complaint from a customer which states
that she recently received two statements. The first statement shows a significant
decline in the value of her portfolio, while the second statement corrects errors to
indicate an appreciation in the value of her portfolio. The customer suspects that the
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
,second statement was artificially created. This complaint should be: - ANSWER✔✔-
Written complaints alleging theft, misappropriation of funds or securities, or forgery
are among events that trigger a requirement to submit a report to FINRA within 30 days
of discovery.
This situation involves the potential forgery of customer statements and trigger the
filing of a report.
Lyle, Molly, and Seena have a joint account registered as Tenants in Common. In the
event that Seena dies, which of the following statements is TRUE? - ANSWER✔✔-
Seena's estate has a claim on her portion of the account's assets.
BD freeze account, executor will provide documentation to establish authority to act on
behalf of the estate. Estate become third owner in the existing Tenants in Common
arrangement.
A client with an options account takes the following position: Long GHI Nov 65 puts
and Short GHI Nov 55 puts. Which of the following statements is TRUE regarding this
position? - ANSWER✔✔-Position will be profitable if the market price of the security
declines.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, Debit Put Spread.
Cost to purchase a put with a higher strike price is more than the amount received for
selling a put with a lower strike price.
Investor will make money if stock declines since the long put will be exercised first
(higher strike)
Higher strike price will always be more valuable than a put with a lower strike price.
Profitable between 65-55, below 55.
A broker who transacts an order for a customer must send a confirmation disclosing all
of the following information, EXCEPT: - ANSWER✔✔-If it acted as principal and that it
prepares research on the security.
Must disclose if BD acted as an agent for customer and third party and Yield
Computation.
When evaluating convertible bonds and the common stock to which it may be
converted, which of the following situations would produce a profitable arbitrage
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
