FINRA Series 7 Comprehensive Exam 100
Questions & Answers Plus Rationales
2026/27 Instant Pdf Download
Question 1
A feasibility study would most likely be created for which of the
following municipal bond issues?
A. Middle school bond
B. Local park bond
C. Water treatment facility bond
D. Library bond
Correct Answer: C – Water treatment facility bond
Question 2
A customer, age 55, purchases a 9.00% $100 par preferred stock with a
current yield of 11.53%. Which of the following is the market price for
the preferred stock?
A. $71.05
B. $78.04
C. $81.38
D. $86.97
Correct Answer: B – $78.04
Question 3
An investor is short 1 XYZ $550 call. XYZ stock performs a 10% stock
dividend. What will the adjusted option contract appear as?
,A. 1 short XYZ $500 call covering 110 shares
B. 1 short XYZ $550 call covering 100 shares
C. 5 short XYZ $500 calls covering 100 shares per call
D. 5 short XYZ $550 calls covering 110 shares per call
Correct Answer: A – 1 short XYZ $500 call covering 110 shares
Question 4
Which of the following securities is most likely to obtain income from
mortgages on commercial properties?
A. CMOs
B. FHLMC pass through certificates
C. Mortgage bonds
D. Mortgage REITs
Correct Answer: D – Mortgage REITs
Question 5
A registered representative writes up a thoughtful letter offering free
financial analysis to help her customers save enough for retirement. The
representative runs the letter by several of her colleagues, and they all
give her good feedback. She immediately sends the letter to 21 retail
customers. What statement is true?
A. The communication must be kept on file for 2 years
B. The communication did not require pre-approval from a principal
C. The communication is considered a retail communication
D. The communication should have been pre-approved by FINRA
Correct Answer: C – The communication is considered a retail
communication
,Question 6
Aggressive stock funds would be closely aligned with which of the
following?
A. Growth funds
B. Special situation funds
C. Balanced funds
D. Specialized funds
Correct Answer: B – Special situation funds
Question 7
The IRS grants an exception to the early withdrawal penalty in relation to
retirement plans for which of the following reasons?
A. Educational expenses
B. Significant current year tax obligations
C. Hardship withdrawals
D. Significant losses experienced on investments in the plan
Correct Answer: A – Educational expenses
Question 8
Access equals delivery rules are most pertinent to which of the
following?
A. Access to the OTC markets
B. Electronic delivery of a prospectus
C. Access to NASDAQ level II quotes
D. Ability to retrieve stock certificates
Correct Answer: B – Electronic delivery of a prospectus
, Question 9
Which of the following is the formula for debt service coverage ratio
(DSCR)?
A. Liabilities / debt service requirements
B. Liabilities – debt service requirements
C. Net operating income – debt service requirements
D. Net operating income / debt service requirements
Correct Answer: D – Net operating income / debt service requirements
Question 10
An investor writes 3 TRV Oct $55 calls at $6.00 and 3 TRV Oct $55 puts at
$4.50, when the market price is $52.00. The investor will experience a loss
at which of the following prices?
A. $45.00
B. $46.25
C. $65.00
D. $66.00
Correct Answer: D – $66.00
Question 11
Which of the following securities is MOST suitable for an investor
specifying a tax advantaged income investment objective?
A. Russell 2000 ETF
B. Large cap growth fund
C. Value stock
D. CMO
Correct Answer: D – CMO
Questions & Answers Plus Rationales
2026/27 Instant Pdf Download
Question 1
A feasibility study would most likely be created for which of the
following municipal bond issues?
A. Middle school bond
B. Local park bond
C. Water treatment facility bond
D. Library bond
Correct Answer: C – Water treatment facility bond
Question 2
A customer, age 55, purchases a 9.00% $100 par preferred stock with a
current yield of 11.53%. Which of the following is the market price for
the preferred stock?
A. $71.05
B. $78.04
C. $81.38
D. $86.97
Correct Answer: B – $78.04
Question 3
An investor is short 1 XYZ $550 call. XYZ stock performs a 10% stock
dividend. What will the adjusted option contract appear as?
,A. 1 short XYZ $500 call covering 110 shares
B. 1 short XYZ $550 call covering 100 shares
C. 5 short XYZ $500 calls covering 100 shares per call
D. 5 short XYZ $550 calls covering 110 shares per call
Correct Answer: A – 1 short XYZ $500 call covering 110 shares
Question 4
Which of the following securities is most likely to obtain income from
mortgages on commercial properties?
A. CMOs
B. FHLMC pass through certificates
C. Mortgage bonds
D. Mortgage REITs
Correct Answer: D – Mortgage REITs
Question 5
A registered representative writes up a thoughtful letter offering free
financial analysis to help her customers save enough for retirement. The
representative runs the letter by several of her colleagues, and they all
give her good feedback. She immediately sends the letter to 21 retail
customers. What statement is true?
A. The communication must be kept on file for 2 years
B. The communication did not require pre-approval from a principal
C. The communication is considered a retail communication
D. The communication should have been pre-approved by FINRA
Correct Answer: C – The communication is considered a retail
communication
,Question 6
Aggressive stock funds would be closely aligned with which of the
following?
A. Growth funds
B. Special situation funds
C. Balanced funds
D. Specialized funds
Correct Answer: B – Special situation funds
Question 7
The IRS grants an exception to the early withdrawal penalty in relation to
retirement plans for which of the following reasons?
A. Educational expenses
B. Significant current year tax obligations
C. Hardship withdrawals
D. Significant losses experienced on investments in the plan
Correct Answer: A – Educational expenses
Question 8
Access equals delivery rules are most pertinent to which of the
following?
A. Access to the OTC markets
B. Electronic delivery of a prospectus
C. Access to NASDAQ level II quotes
D. Ability to retrieve stock certificates
Correct Answer: B – Electronic delivery of a prospectus
, Question 9
Which of the following is the formula for debt service coverage ratio
(DSCR)?
A. Liabilities / debt service requirements
B. Liabilities – debt service requirements
C. Net operating income – debt service requirements
D. Net operating income / debt service requirements
Correct Answer: D – Net operating income / debt service requirements
Question 10
An investor writes 3 TRV Oct $55 calls at $6.00 and 3 TRV Oct $55 puts at
$4.50, when the market price is $52.00. The investor will experience a loss
at which of the following prices?
A. $45.00
B. $46.25
C. $65.00
D. $66.00
Correct Answer: D – $66.00
Question 11
Which of the following securities is MOST suitable for an investor
specifying a tax advantaged income investment objective?
A. Russell 2000 ETF
B. Large cap growth fund
C. Value stock
D. CMO
Correct Answer: D – CMO
