Minnesota General Securities
Representative Examination (Series 7)
Requirement Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
Download Pdf
1. A customer wants to purchase 100 shares of a stock at the current
market price. Which order should be entered?
A. Limit order
B. Stop order
C. Market order
D. Stop-limit order
Answer: C. Market order
Rationale: A market order is executed immediately at the best available
market price.
, 2. Which of the following securities represents ownership in a
corporation?
A. Corporate bond
B. Treasury bill
C. Municipal bond
D. Common stock
Answer: D. Common stock
Rationale: Common stock represents an equity ownership interest in a
corporation.
3. What is the primary purpose of a prospectus?
A. Guarantee investment performance
B. Provide disclosure about an offering
C. Establish market prices
D. Register an investor account
Answer: B. Provide disclosure about an offering
Rationale: A prospectus contains material information investors need
before purchasing a security.
4. Which bond has the greatest interest rate risk?
,A. 2-year bond
B. 5-year bond
C. 10-year bond
D. 30-year bond
Answer: D. 30-year bond
Rationale: Longer maturities are generally more sensitive to interest rate
changes.
5. An investor seeking regular income is most likely to purchase:
A. Growth stocks
B. Options
C. Investment-grade bonds
D. Warrants
Answer: C. Investment-grade bonds
Rationale: High-quality bonds generally provide predictable income
through interest payments.
6. Which of the following is a money market instrument?
A. Preferred stock
B. Corporate bond
, C. Common stock
D. Treasury bill
Answer: D. Treasury bill
Rationale: Treasury bills are short-term debt securities issued by the U.S.
Treasury.
7. A call option gives the holder the right to:
A. Sell stock at the strike price
B. Receive dividends
C. Buy bonds at par
D. Buy stock at the strike price
Answer: D. Buy stock at the strike price
Rationale: Call options provide the right, but not the obligation, to
purchase the underlying security.
8. Which order becomes a market order once the stop price is reached?
A. Limit order
B. Market order
C. Stop order
D. Fill-or-kill order
Answer: C. Stop order
Representative Examination (Series 7)
Requirement Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
Download Pdf
1. A customer wants to purchase 100 shares of a stock at the current
market price. Which order should be entered?
A. Limit order
B. Stop order
C. Market order
D. Stop-limit order
Answer: C. Market order
Rationale: A market order is executed immediately at the best available
market price.
, 2. Which of the following securities represents ownership in a
corporation?
A. Corporate bond
B. Treasury bill
C. Municipal bond
D. Common stock
Answer: D. Common stock
Rationale: Common stock represents an equity ownership interest in a
corporation.
3. What is the primary purpose of a prospectus?
A. Guarantee investment performance
B. Provide disclosure about an offering
C. Establish market prices
D. Register an investor account
Answer: B. Provide disclosure about an offering
Rationale: A prospectus contains material information investors need
before purchasing a security.
4. Which bond has the greatest interest rate risk?
,A. 2-year bond
B. 5-year bond
C. 10-year bond
D. 30-year bond
Answer: D. 30-year bond
Rationale: Longer maturities are generally more sensitive to interest rate
changes.
5. An investor seeking regular income is most likely to purchase:
A. Growth stocks
B. Options
C. Investment-grade bonds
D. Warrants
Answer: C. Investment-grade bonds
Rationale: High-quality bonds generally provide predictable income
through interest payments.
6. Which of the following is a money market instrument?
A. Preferred stock
B. Corporate bond
, C. Common stock
D. Treasury bill
Answer: D. Treasury bill
Rationale: Treasury bills are short-term debt securities issued by the U.S.
Treasury.
7. A call option gives the holder the right to:
A. Sell stock at the strike price
B. Receive dividends
C. Buy bonds at par
D. Buy stock at the strike price
Answer: D. Buy stock at the strike price
Rationale: Call options provide the right, but not the obligation, to
purchase the underlying security.
8. Which order becomes a market order once the stop price is reached?
A. Limit order
B. Market order
C. Stop order
D. Fill-or-kill order
Answer: C. Stop order
