Series 7 - Mastery Exam UPDATED ACTUAL Questions and CORRECT
Answers
C)
An investor is interested in a limited partnership and asks
his registered representative to explain the "crossover
point" referred to in discussions about the tax conse-
quences of the program. The best definition would be
A)
the point at which the program begins to generate taxable
income instead of losses, which generally occurs quickly
if not in the very first year.
B)
the point at which the program begins to generate losses
instead of taxable income, which generally occurs in later
years.
C)
the point at which the program begins to generate losses
instead of taxable income, which generally does not occur
until near the time the partnership is expected to be
dissolved.
D)
the point at which the program begins to generate taxable
income instead of losses, which generally occurs in later
years.
An investor sold short 1,000 shares of LUMN at 52 on
January 10. If the investor covered the short position at 43
on January 15 of the following year, which if the following
statements is true?
A)
Buying the same stock back within 30 days created a wash
sale.
B)
The investor has a long-term capital gain of $9,000.
,D - 100%
B - 100%
, Only $3,000 of the investor's loss is deductible against
ordinary income.
D)
The investor has a short term capital gain.
The volatility market index (VIX) is best characterized as
A)
an index option traded on the NYSE.
B)
a measurement of the implied stability of options written
on the S&P 500. C - 100%
C)
a "fear" index, measuring the expectations of market
volatility.
D)
a highly volatile index-tracking exchange-traded fund ETF.
An appeal of an adverse Code of Procedure decision may
be made by either party within
A)
10 days of the decision date.
B)
D - 100%
30 days of the decision date.
C)
45 days of the decision date.
D)
25 days of the decision date.
Among the items shown on a customer confirmation for
a bond transaction is the amount of accrued interest. The
amount of accrued interest is
A)
subtracted on both the buyer's and the seller's confirma-
tions.
, B)
subtracted on the buyer's confirmation and added to the
seller's confirmation.
C)
added on the buyer's confirmation and subtracted on the D - 100%
seller's confirmation.
D)
added on the buyer's confirmation and added on the
seller's confirmation.
An agent has recommended investments in the XYZ fund
family to his customers for 10 years. He is referred by
one of his customers to a prospect who has inherited
$500,000 as beneficiary of a life insurance policy. The
prospect tells the agent she has never invested in the
market before, is risk averse, and wants safety of principal
to be the first priority with liquidity second. The agent
recommends the following investments:
XYZ government bond fund, B shares $200,000
XYZ large-cap growth and Income B shares $150,000
XYZ liquid reserve money market $150,000
A - 100%
The recommendation is
A)
unsuitable because it does not address the customer's
two primary objectives.
B)
suitable because it addresses the customer's liquidity ob-
jective.
C)
suitable because it addresses the customer's safety objec-
tive.
D)
Answers
C)
An investor is interested in a limited partnership and asks
his registered representative to explain the "crossover
point" referred to in discussions about the tax conse-
quences of the program. The best definition would be
A)
the point at which the program begins to generate taxable
income instead of losses, which generally occurs quickly
if not in the very first year.
B)
the point at which the program begins to generate losses
instead of taxable income, which generally occurs in later
years.
C)
the point at which the program begins to generate losses
instead of taxable income, which generally does not occur
until near the time the partnership is expected to be
dissolved.
D)
the point at which the program begins to generate taxable
income instead of losses, which generally occurs in later
years.
An investor sold short 1,000 shares of LUMN at 52 on
January 10. If the investor covered the short position at 43
on January 15 of the following year, which if the following
statements is true?
A)
Buying the same stock back within 30 days created a wash
sale.
B)
The investor has a long-term capital gain of $9,000.
,D - 100%
B - 100%
, Only $3,000 of the investor's loss is deductible against
ordinary income.
D)
The investor has a short term capital gain.
The volatility market index (VIX) is best characterized as
A)
an index option traded on the NYSE.
B)
a measurement of the implied stability of options written
on the S&P 500. C - 100%
C)
a "fear" index, measuring the expectations of market
volatility.
D)
a highly volatile index-tracking exchange-traded fund ETF.
An appeal of an adverse Code of Procedure decision may
be made by either party within
A)
10 days of the decision date.
B)
D - 100%
30 days of the decision date.
C)
45 days of the decision date.
D)
25 days of the decision date.
Among the items shown on a customer confirmation for
a bond transaction is the amount of accrued interest. The
amount of accrued interest is
A)
subtracted on both the buyer's and the seller's confirma-
tions.
, B)
subtracted on the buyer's confirmation and added to the
seller's confirmation.
C)
added on the buyer's confirmation and subtracted on the D - 100%
seller's confirmation.
D)
added on the buyer's confirmation and added on the
seller's confirmation.
An agent has recommended investments in the XYZ fund
family to his customers for 10 years. He is referred by
one of his customers to a prospect who has inherited
$500,000 as beneficiary of a life insurance policy. The
prospect tells the agent she has never invested in the
market before, is risk averse, and wants safety of principal
to be the first priority with liquidity second. The agent
recommends the following investments:
XYZ government bond fund, B shares $200,000
XYZ large-cap growth and Income B shares $150,000
XYZ liquid reserve money market $150,000
A - 100%
The recommendation is
A)
unsuitable because it does not address the customer's
two primary objectives.
B)
suitable because it addresses the customer's liquidity ob-
jective.
C)
suitable because it addresses the customer's safety objec-
tive.
D)
