Series 7 Practice Questions with
Correct Answers
An investor tells his rr to purchase 50m EGG 11.7% debenture bonds. The order goes
through and the bonds are purchased for 113. A year before the bond matures, it is
valued at 103. What is this called? - ANSWER✔✔-Amortization
In oil and gas limited partnerships is the risk greater in developmental or exploratory
programs? - ANSWER✔✔-exploratory
What is the best way to measure the GNP? (gross national product) - ANSWER✔✔-
constant dollars
What is the broker's role in the term "broker/dealer"? - ANSWER✔✔-executing trades
for client accounts
What is the maximum federal tax rate for corporations on their dividends and other
income? - ANSWER✔✔-35%
What is the maximum federal tax rate for individuals on their dividends and other
income? - ANSWER✔✔-20%
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,What type of securities are exempt from registration under the Securities Act of 1933? -
ANSWER✔✔-government agency issues
Suppose a put is assigned to the writer. Under federal guidlines, the premium received
by the writer of the put is treated in what manner? - ANSWER✔✔-It is subtracted from
the cost basis when the writer is assigned
How much income must a REIT generate from the real estate properties? -
ANSWER✔✔-75%
How much must a REIT pass-through of its profits to investors? - ANSWER✔✔-90%
A portfolio manager of a pension fund desires income but wants to protect the porfolio.
What option position would he make? - ANSWER✔✔-Write calls against the market
index for income and protection.
A rr should request an extension of time for an invest to pay for stock that he has
purchased by the: - ANSWER✔✔-Fifth business day
Self-employed people can contribute how much to thier Keogh? - ANSWER✔✔-The
lesser of 100% of their income or $51,000
Your customer thinks that the stock is aobut to hit the resistance level and break
through to the next level. She would like to take advantage of the situation. Whay type
of ORDER would you suggest she place? - ANSWER✔✔-Buy Stop order
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, When an investor buys a corporate bond, they have how many days to pay for it? -
ANSWER✔✔-3 business days
What are the rating agencies for ST, LT and Muni Debt Securities? - ANSWER✔✔-1.
S&P
2. Moody's
3. Fitch's
4. Best's
What does Best's Rating service rate? - ANSWER✔✔-they are the one rating company
that rates insurance companies instead of bonds
How are CDs issued? - ANSWER✔✔-in bearer form only
Where are CDs shown and for how long? - ANSWER✔✔-on Nasdaq with a minimum
duration of 14 days
How are CDs quoted? - ANSWER✔✔-in terms of yield
Who does not issue eurodollar deposits? - ANSWER✔✔-US government
What kind of taxes is the interest of corporate bonds subject to? - ANSWER✔✔-federal
income tax and state income tax
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
Correct Answers
An investor tells his rr to purchase 50m EGG 11.7% debenture bonds. The order goes
through and the bonds are purchased for 113. A year before the bond matures, it is
valued at 103. What is this called? - ANSWER✔✔-Amortization
In oil and gas limited partnerships is the risk greater in developmental or exploratory
programs? - ANSWER✔✔-exploratory
What is the best way to measure the GNP? (gross national product) - ANSWER✔✔-
constant dollars
What is the broker's role in the term "broker/dealer"? - ANSWER✔✔-executing trades
for client accounts
What is the maximum federal tax rate for corporations on their dividends and other
income? - ANSWER✔✔-35%
What is the maximum federal tax rate for individuals on their dividends and other
income? - ANSWER✔✔-20%
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,What type of securities are exempt from registration under the Securities Act of 1933? -
ANSWER✔✔-government agency issues
Suppose a put is assigned to the writer. Under federal guidlines, the premium received
by the writer of the put is treated in what manner? - ANSWER✔✔-It is subtracted from
the cost basis when the writer is assigned
How much income must a REIT generate from the real estate properties? -
ANSWER✔✔-75%
How much must a REIT pass-through of its profits to investors? - ANSWER✔✔-90%
A portfolio manager of a pension fund desires income but wants to protect the porfolio.
What option position would he make? - ANSWER✔✔-Write calls against the market
index for income and protection.
A rr should request an extension of time for an invest to pay for stock that he has
purchased by the: - ANSWER✔✔-Fifth business day
Self-employed people can contribute how much to thier Keogh? - ANSWER✔✔-The
lesser of 100% of their income or $51,000
Your customer thinks that the stock is aobut to hit the resistance level and break
through to the next level. She would like to take advantage of the situation. Whay type
of ORDER would you suggest she place? - ANSWER✔✔-Buy Stop order
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
, When an investor buys a corporate bond, they have how many days to pay for it? -
ANSWER✔✔-3 business days
What are the rating agencies for ST, LT and Muni Debt Securities? - ANSWER✔✔-1.
S&P
2. Moody's
3. Fitch's
4. Best's
What does Best's Rating service rate? - ANSWER✔✔-they are the one rating company
that rates insurance companies instead of bonds
How are CDs issued? - ANSWER✔✔-in bearer form only
Where are CDs shown and for how long? - ANSWER✔✔-on Nasdaq with a minimum
duration of 14 days
How are CDs quoted? - ANSWER✔✔-in terms of yield
Who does not issue eurodollar deposits? - ANSWER✔✔-US government
What kind of taxes is the interest of corporate bonds subject to? - ANSWER✔✔-federal
income tax and state income tax
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
