FINRA Exam 2 MOCK - Series 7
2025/2026 Exam Questions and Answers
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New issue municipal bond orders are allocated according to priorities the syndicate
sets in advance. The MSRB requires syndicates to establish priority allocation
provisions for orders. Which of the following is the most common priority?
A)
Group net, presale, designated, member
B)
Member, designated, presale, group net
C)
Presale, group net, designated, member
,D)
Presale, designated, group net, member - 🧠 ANSWER ✔✔C- Remember our
abbreviation: PGDM (Pro Golfers Don't Miss) and that will get you the correct
answer to any of these order allocation questions.
A direct participation program (DPP), organized as a limited partnership, must
avoid at least two characteristics of a corporation. Which two characteristics are
the easiest to avoid?
A)
Continuity of life and decentralized management
B)
Continuity of life and freely transferable interests
C)
Freely transferable interests and centralized management
D)
Centralized management and continuity of life - 🧠 ANSWER ✔✔B-- Continuity of
life and freely transferable interests are the easiest to avoid. The limited partnership
is formed to exist for a limited time, and general partner (GP) must approve any
, 3
transfer of interests. Centralized management is the hardest characteristics to avoid
because management of the program is the responsibility of the general partner
(GP), so management is centralized.
A registered representative of a FINRA member firm has developed a LinkedIn
friendship with a registered investment adviser. This has resulted in the investment
adviser directing transactions for many of their clients to this representative's
broker-dealer. The broker-dealer is promoting an all-day seminar with
presentations to be delivered by a number of outstanding economists and securities
analysts. The seminar location is in a hotel ballroom down the street from the
member firm's office. The firm has invited the investment adviser to attend as its
guest. That location requires the adviser to fly in the night before and stay at the
hotel. As the broker-dealer's guest, which of the following expenses are
reimbursable by the broker-dealer without violating the safe harbor provisions of
Section 28(e)?
C)
The registration fees for the seminar
D)
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, The registration fees for the seminar plus the hotel room for the night - 🧠
ANSWER ✔✔C--Under the safe harbor provisions of Section 28(e) of the
Securities Exchange Act of 1934, broker-dealers are permitted to extend seminar
invitations to investment advisers with whom they do or hope to do business. The
only expense reimbursable by the broker-dealer is the fee to attend the seminar.
A customer purchases 200 shares of Pyrrhic Trophy Manufacturing Corporation
(PTMC) at $105 per share. With the stock at $122 per share, the customer sells one
PTMC Jan $120 call option for 3.50. One week prior to expiration, PTMC is
selling for $132 per share, and the customer is assigned an exercise notice. The tax
consequence of this is
A)
a capital gain of $1,500.
B)
a capital gain of $2,050.
C)
a capital gain of $1,850.
D)
2025/2026 Exam Questions and Answers
100% Guaranteed Success | Already
Rated A+
New issue municipal bond orders are allocated according to priorities the syndicate
sets in advance. The MSRB requires syndicates to establish priority allocation
provisions for orders. Which of the following is the most common priority?
A)
Group net, presale, designated, member
B)
Member, designated, presale, group net
C)
Presale, group net, designated, member
,D)
Presale, designated, group net, member - 🧠 ANSWER ✔✔C- Remember our
abbreviation: PGDM (Pro Golfers Don't Miss) and that will get you the correct
answer to any of these order allocation questions.
A direct participation program (DPP), organized as a limited partnership, must
avoid at least two characteristics of a corporation. Which two characteristics are
the easiest to avoid?
A)
Continuity of life and decentralized management
B)
Continuity of life and freely transferable interests
C)
Freely transferable interests and centralized management
D)
Centralized management and continuity of life - 🧠 ANSWER ✔✔B-- Continuity of
life and freely transferable interests are the easiest to avoid. The limited partnership
is formed to exist for a limited time, and general partner (GP) must approve any
, 3
transfer of interests. Centralized management is the hardest characteristics to avoid
because management of the program is the responsibility of the general partner
(GP), so management is centralized.
A registered representative of a FINRA member firm has developed a LinkedIn
friendship with a registered investment adviser. This has resulted in the investment
adviser directing transactions for many of their clients to this representative's
broker-dealer. The broker-dealer is promoting an all-day seminar with
presentations to be delivered by a number of outstanding economists and securities
analysts. The seminar location is in a hotel ballroom down the street from the
member firm's office. The firm has invited the investment adviser to attend as its
guest. That location requires the adviser to fly in the night before and stay at the
hotel. As the broker-dealer's guest, which of the following expenses are
reimbursable by the broker-dealer without violating the safe harbor provisions of
Section 28(e)?
C)
The registration fees for the seminar
D)
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, The registration fees for the seminar plus the hotel room for the night - 🧠
ANSWER ✔✔C--Under the safe harbor provisions of Section 28(e) of the
Securities Exchange Act of 1934, broker-dealers are permitted to extend seminar
invitations to investment advisers with whom they do or hope to do business. The
only expense reimbursable by the broker-dealer is the fee to attend the seminar.
A customer purchases 200 shares of Pyrrhic Trophy Manufacturing Corporation
(PTMC) at $105 per share. With the stock at $122 per share, the customer sells one
PTMC Jan $120 call option for 3.50. One week prior to expiration, PTMC is
selling for $132 per share, and the customer is assigned an exercise notice. The tax
consequence of this is
A)
a capital gain of $1,500.
B)
a capital gain of $2,050.
C)
a capital gain of $1,850.
D)
