Finra Series-7 Exam Practice Test Instant Access

Question 1

With the Regulation T requirement at 50%, a firm wishes to impose house rules that require a minimum equity of 40%.

Which of the following is true?

Athis cannot be implemented because the level is below Reg T

Bthis cannot be implemented since maintenance requirements are only 25% of equity for long positions

Cthis is permissible

Dthis action must be approved by the FRB and FINRA

Answer : C

this is permissible. Firms may establish house rules as long as they are at least as strict as the minimum maintenance requirements. Reg T only dictates an initial requirement and does not address minimum equity.

Question 2

Which of the following securities is traded only in the over-the-counter market?

Acorporate bonds

Bpreferred stocks

Copen-end investment companies

Dclosed-end investment companies

Answer : C

open-end investment companies. Open-end mutual funds are a continuous offering of new securities that are not traded on an exchange. They trade only in the over-the-counter market. The other choices may trade over-the-counter or on exchanges.

Question 3

An ''accumulation unit'' of a variable annuity is used to determine which of the following?

Athe value of the annuitant's contract before annuity payments begin

Bthe amount of annuity payments to be paid to the owner

Cthe amount to be passed to the annuitant's beneficiary

Dthe amount returned to the annuitant upon redemption of the account

Answer : A

the value of the annuitant's contract before annuity payments begin. Accumulation units determine contract value. Payout are determined by annuity units.

Question 4

The term ''mutual fund'' is popularly used for which of the following?

Aall investment companies

Bpension funds

Copen-end investment companies

Dclosed-end investment companies

Answer : C

open-end investment companies. The term is generally applied to open-end investment companies.

Question 5

Which of the following statements about the custodian for an open-end mutual fund is correct?

Athe custodian performs all management, supervisory, or investment functions

Bthe custodian may perform an essential clerical service for the fund and its shareholders

Cthe custodian takes part in the sale of fund shares

Dthe custodian affords protection against decline in value of fund shares

Answer : B

the custodian may perform an essential clerical service for the fund and its shareholders. The custodian holds the cash and securities of the investment company and performs the bookkeeping functions. It does not have a supervisory role.

Question 6

Which of the following organizations usually has a prominent role in guiding investment policies of mutual funds?

Athe plan company

Bthe management group

Cthe custodian bank

Dthe underwriter

Answer : B

the management group. The management group is actually comprised of the management company (including the underwriter) and the investment advisor.

Question 7

For what time period does a Form 144 remain in effect?

A30 days

B60 days

C90 days

Done year

Answer : C

90 days. To avoid a forced sale, stock many be sold under Rule 144 over a 90-day period.

Finra General Securities Representative Examination (GS) Series-7 Exam Practice Test