Series 7 Practice Questions and Verified
Detailed Answers | Already Graded A+
Which of the following would be considered debit spreads?
I. Long 10 OIT Aug. 45 Puts, Short 10 OIT Aug 57.5 puts
II. Short 7 KLM July 70 Calls, Long 7 KLM July 60 calls
III. Short 8 TRW June 60 Puts, Long 8 TRW June 70 Puts
IV. Write 9 JKG Oct 50 calls, Buy 9 JKG Oct 40 calls
A. I, II, and III
B. II, III, and IV
C. III and IV
D. I, II, III, and IV - ✔✔B
The only spread that is not a debit spread is the bull put spread which is :
Long 10 OIT Aug 45 Puts
Short 10 OIT 57.5 puts
All of the following promise to pay the investor interest except:
A. Fixed annuity
B. Mortgage bond
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COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
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,C. Adjustment bond
D. CMO - ✔✔C
An adjustment bond only promises to pay the investor interest if the
corporation earns enough money to do so. The investor is not promised
interest.
A fully registered corporate bond must have all of the following attached to it
except:
A. Coupons
B. Date of issue
C. Call features
D. A statement relating to the trust indenture - ✔✔A
A fully registered bond is registered as to interest and principal therefore
coupons will not be attached. Interest payments would automatically be made
to the owner of record.
What would an analyst look at when determining the creditworthiness of a
general obligation bond?
A. revenue pledge
Page 2 of 39
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
NUMBER: 619652435. TERMS OF USE. PRIVACY STATEMENT.ALL RIGHTS RESERVED
,B. feasibility studies
C. flow of funds statement
D. public's attitude toward debt, taxes - ✔✔D
A general obligation bond is backed by the taxes that the public pays--how do
they feel about paying all these taxes to support all this debt? Will they
cooperate?
An investor would expect to realize the largest capital gain by buying bonds:
A. That are short term when rates are low
B. That are long term when rates are high
C. That are long term when rates are low
D. That are short term when rates are high - ✔✔B
An investor would expect to realize the largest gain by purchasing bonds when
rates are high. The bond with the longest time left to maturity will become
worth the most.
The minimum denomination for a GNMA pass through certificate is
A. $10,000
B. $1,000
Page 3 of 39
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
NUMBER: 619652435. TERMS OF USE. PRIVACY STATEMENT.ALL RIGHTS RESERVED
, C. $500
D. $2,500 - ✔✔B
The minimum denomination for a GNMA pass through certificate is $1,000.
The components of the spread and the terms for operation of the syndicate
would be explained thoroughly in the
A. underwriting agreement
B. legal opinion
C. official notice of sale
D. agreement among underwriters - ✔✔D
The underwriters have to agree to the terms of the underwriting among
themselves, which is why the term "agreement among underwriters" is used.
Most customer option orders will be executed by:
A. Super Display Book
B. CAES
C. NASDAQ
D. AutoEx - ✔✔D
Page 4 of 39
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
NUMBER: 619652435. TERMS OF USE. PRIVACY STATEMENT.ALL RIGHTS RESERVED
Detailed Answers | Already Graded A+
Which of the following would be considered debit spreads?
I. Long 10 OIT Aug. 45 Puts, Short 10 OIT Aug 57.5 puts
II. Short 7 KLM July 70 Calls, Long 7 KLM July 60 calls
III. Short 8 TRW June 60 Puts, Long 8 TRW June 70 Puts
IV. Write 9 JKG Oct 50 calls, Buy 9 JKG Oct 40 calls
A. I, II, and III
B. II, III, and IV
C. III and IV
D. I, II, III, and IV - ✔✔B
The only spread that is not a debit spread is the bull put spread which is :
Long 10 OIT Aug 45 Puts
Short 10 OIT 57.5 puts
All of the following promise to pay the investor interest except:
A. Fixed annuity
B. Mortgage bond
Page 1 of 39
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
NUMBER: 619652435. TERMS OF USE. PRIVACY STATEMENT.ALL RIGHTS RESERVED
,C. Adjustment bond
D. CMO - ✔✔C
An adjustment bond only promises to pay the investor interest if the
corporation earns enough money to do so. The investor is not promised
interest.
A fully registered corporate bond must have all of the following attached to it
except:
A. Coupons
B. Date of issue
C. Call features
D. A statement relating to the trust indenture - ✔✔A
A fully registered bond is registered as to interest and principal therefore
coupons will not be attached. Interest payments would automatically be made
to the owner of record.
What would an analyst look at when determining the creditworthiness of a
general obligation bond?
A. revenue pledge
Page 2 of 39
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
NUMBER: 619652435. TERMS OF USE. PRIVACY STATEMENT.ALL RIGHTS RESERVED
,B. feasibility studies
C. flow of funds statement
D. public's attitude toward debt, taxes - ✔✔D
A general obligation bond is backed by the taxes that the public pays--how do
they feel about paying all these taxes to support all this debt? Will they
cooperate?
An investor would expect to realize the largest capital gain by buying bonds:
A. That are short term when rates are low
B. That are long term when rates are high
C. That are long term when rates are low
D. That are short term when rates are high - ✔✔B
An investor would expect to realize the largest gain by purchasing bonds when
rates are high. The bond with the longest time left to maturity will become
worth the most.
The minimum denomination for a GNMA pass through certificate is
A. $10,000
B. $1,000
Page 3 of 39
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
NUMBER: 619652435. TERMS OF USE. PRIVACY STATEMENT.ALL RIGHTS RESERVED
, C. $500
D. $2,500 - ✔✔B
The minimum denomination for a GNMA pass through certificate is $1,000.
The components of the spread and the terms for operation of the syndicate
would be explained thoroughly in the
A. underwriting agreement
B. legal opinion
C. official notice of sale
D. agreement among underwriters - ✔✔D
The underwriters have to agree to the terms of the underwriting among
themselves, which is why the term "agreement among underwriters" is used.
Most customer option orders will be executed by:
A. Super Display Book
B. CAES
C. NASDAQ
D. AutoEx - ✔✔D
Page 4 of 39
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION
NUMBER: 619652435. TERMS OF USE. PRIVACY STATEMENT.ALL RIGHTS RESERVED
