Series 7 Final Exam 1 2025
Questions and Answers
Under MSRB rules, all of the following records must be kept for specified time periods
EXCEPT: - ANSWER✔✔-Official Statements
A password protected website maintained by a member firm is considered to be: -
ANSWER✔✔-Sales literature
All of the following statements are true regarding the Official Statement EXCEPT that
the Official Statement is: - ANSWER✔✔-required to be prepared by issuers by
Municipal Securities Rulemaking Boards for all new issue municipal bonds
If an unsolicited facsimile is sent to a potential client, all of the following information
must be included EXCEPT the:
A. identity of sender
B. time, place and address from which sent
C. date and number of sheets
D. phone number from which sent - ANSWER✔✔-C. date and number of sheets
which of the following usually acts as the stabilizing market maker - ANSWER✔✔-B.
Managing underwriter
Under Regulation D, issuers must provide which of the following to investors to obtain
a private placement exemption? - ANSWER✔✔-Copy of Offering Circular or Private
Memorandum
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
, The interest income earned on which of the following municipal bonds would be
included in the alternative minimum tax computation? - ANSWER✔✔-Industrial
Revenue Bond
The nominal interest rate on TIPS approximates the: - ANSWER✔✔-real interest rate
A security which gives the holder an undivided interest in a pool of mortgages is
known as a(n): - ANSWER✔✔-pass through certificate
A corporate bond which obligates the issuer to pay interest ONLY if the company meets
a specified earnings test is a(n): - ANSWER✔✔-income bond
Common shares of which of the following issuers are likely to have a Beta coefficient
much lower than +1 ? - ANSWER✔✔-Public Utility
Which of the following is a lagging indicator? - ANSWER✔✔-Reported corporate
profits - bc they show activity for the prior quarter
Highest interest rate is - ANSWER✔✔-Prime rate
What is not suitable investments for an IRA account? - ANSWER✔✔-Municipal bonds
The overall economic performance of developing countries is expected to outpace that
of the US over the coming years. A customer that wishes to profit from this should
receive which recommendation and accompanying risk disclosures? - ANSWER✔✔-The
customer should recommend an emerging markets fund, as long as the customer is
willing to assume political risk and exchange rate risk
All of the following income received by a corporate investor is partially excluded from
income tax EXCEPT: - ANSWER✔✔-Convertible bond interest received - may exclude
50%
Which of the following is reported on Form 1099-DIV? - ANSWER✔✔-Cash dividends
A customer is "accepted" into a limited partnership when the: - ANSWER✔✔-general
partner signs the subscription agreement
preferred stock - ANSWER✔✔-has a dividend rate that is fixed as to a minimum but not
as to maximum
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
Questions and Answers
Under MSRB rules, all of the following records must be kept for specified time periods
EXCEPT: - ANSWER✔✔-Official Statements
A password protected website maintained by a member firm is considered to be: -
ANSWER✔✔-Sales literature
All of the following statements are true regarding the Official Statement EXCEPT that
the Official Statement is: - ANSWER✔✔-required to be prepared by issuers by
Municipal Securities Rulemaking Boards for all new issue municipal bonds
If an unsolicited facsimile is sent to a potential client, all of the following information
must be included EXCEPT the:
A. identity of sender
B. time, place and address from which sent
C. date and number of sheets
D. phone number from which sent - ANSWER✔✔-C. date and number of sheets
which of the following usually acts as the stabilizing market maker - ANSWER✔✔-B.
Managing underwriter
Under Regulation D, issuers must provide which of the following to investors to obtain
a private placement exemption? - ANSWER✔✔-Copy of Offering Circular or Private
Memorandum
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
, The interest income earned on which of the following municipal bonds would be
included in the alternative minimum tax computation? - ANSWER✔✔-Industrial
Revenue Bond
The nominal interest rate on TIPS approximates the: - ANSWER✔✔-real interest rate
A security which gives the holder an undivided interest in a pool of mortgages is
known as a(n): - ANSWER✔✔-pass through certificate
A corporate bond which obligates the issuer to pay interest ONLY if the company meets
a specified earnings test is a(n): - ANSWER✔✔-income bond
Common shares of which of the following issuers are likely to have a Beta coefficient
much lower than +1 ? - ANSWER✔✔-Public Utility
Which of the following is a lagging indicator? - ANSWER✔✔-Reported corporate
profits - bc they show activity for the prior quarter
Highest interest rate is - ANSWER✔✔-Prime rate
What is not suitable investments for an IRA account? - ANSWER✔✔-Municipal bonds
The overall economic performance of developing countries is expected to outpace that
of the US over the coming years. A customer that wishes to profit from this should
receive which recommendation and accompanying risk disclosures? - ANSWER✔✔-The
customer should recommend an emerging markets fund, as long as the customer is
willing to assume political risk and exchange rate risk
All of the following income received by a corporate investor is partially excluded from
income tax EXCEPT: - ANSWER✔✔-Convertible bond interest received - may exclude
50%
Which of the following is reported on Form 1099-DIV? - ANSWER✔✔-Cash dividends
A customer is "accepted" into a limited partnership when the: - ANSWER✔✔-general
partner signs the subscription agreement
preferred stock - ANSWER✔✔-has a dividend rate that is fixed as to a minimum but not
as to maximum
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
