STC Series 7 Progress Exam 1B Questions and Answers 100% Pass

STC Series 7 Progress Exam 1B Questions and Answers 100% Pass An RR has a potential customer who is interested in international investing and sends the person a prospectus for an international equity fund. The customer then visits the RR's office to ask some questions about the types of risks that are associated with the fund. In order to help the client understand the risks of the fund, which of the following actions may the RR perform? A. Highlight the relevant sections of the prospectus B. Create a summary of the fund's risks and provide it to the client C. Provide the client with supplemental sales literature regarding the fund D. Tell the client to ignore the prospectus and read the statement of additional information instead - ANSWER-C. Provide the client with supplemental sales literature regarding the fund RRs may not alter a prospectus in any way and they may not tell clients to disregard its contents. However, a client may be given supplemental sales literature provided it is properly approved and accompanied with or preceded by a prospectus. Materials that Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 2/14 are directly created by RRs (e.g., summaries) may be considered sales literature and should not be used unless they have been approved by a principal. Series K preferred stock has which TWO of the following characteristics? I. The dividend payable begins at a fixed rate and switches to a floating rate. II. The dividend payable begins at a floating rate and switches to a fixed rate. III. The dividend is cumulative. IV. The dividend is non-cumulative. A. I and III B. I and IV C. II and III D. II and IV - ANSWER-B. I and IV Series K preferred stock has the following characteristics: It is issued by a financial service company It has no maturity date It pays a fixed rate for a period and switches to a floating rate (usually based on LIBOR) It's dividend is non-cumulative and it may not carry voting rights It is callable at the option of the issuer Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 3/14 The primary purpose of an exchange is for: A. Establishing rules and procedures for trading securities B. Creating a marketplace where short sellers may borrow securities C. Creating a marketplace that brings buyers and sellers together D. Establishing a marketplace that lowers transactions costs - ANSWER-C. Creating a marketplace that brings buyers and sellers together The SEC definition of an exchange is a marketplace that brings buyers and sellers together. An exchange may be a physical location such as the NYSE or a purely electronic system such as Nasdaq. Which of the following factors is the most important to consider when deciding to recommend a municipal bond unit investment trust to a client? A. Age B. Tax bracket C. Ability to tolerate risk D. Amount in retirement accounts - ANSWER-B. Tax bracket While it is useful to know all of these things about a client, the tax advantages of municipal bonds are most important to clients in higher tax brackets. For clients in low tax brackets, a taxable investment is often more appropriate than a tax-exempt security. Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 4/14 When liquidating a corporation's assets, in which order are claims satisfied? A. Secured bondholders, preferred stockholders, common stockholders, general creditors B. Secured bondholders, general creditors, preferred stockholders, common stockholders C. General creditors, secured bondholders, common stockholders, preferred stockholders D. Common stockholders, preferred stockholders, secured bondholders, general creditors - ANSWER-B. Secured bondholders, general creditors, preferred stockholders, common stockholders The order in which claims are satisfied when liquidating a corporatio