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Series 7 STC Exam Questions with Correct Verified Answers - Rated A+
The market price for a closed-end investment company is based upon: - ANSWER - supply and demand for the shares in the marketplace. A closed-end investment company share may sell at, above, or below its net asset value.
What type of bond is issued as a municipal bond and qualifies as a private activity bond, but may not provide tax-exempt interest to certain investors? - ANSWER - AMT bond required to pay tax on the interest received from a private activity bond. The AMT rules are enacted to ensure that higher income individuals pay a specified minimum amount of tax
Which of the following is generally the largest portion of an underwriting spread? - ANSWER - Selling concession
If securities are received as a gift, how is the cost basis determined? - ANSWER - It's the lesser of the market value or the donor's cost basis.
FINRA's website address must be provided to each customer: - ANSWER – Annually
A trade in which a broker-dealer matches a sale from one of its clients to a purchase from another one of
its clients is referred to as a(n): - ANSWER - Agency cross trade
Which class of mutual fund shares is suitable for investors who prefer a contingent deferred sales charge that's payable at the redemption of their mutual fund shares, rather than a front-end sales load that's payable at the time the shares are purchased? - ANSWER - Class B
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pg. 2 Regulation A is an exemption that allows U.S. and Canadian companies to raise capital through either equity or debt offerings. However, - ANSWER - current SEC reporting companies are not permitted to use Regulation A.
What is the purpose of a 529 ABLE savings plan? - ANSWER - To offer a municipal fund security that can be used to save for medical expenses without impacting disability payments received from Social Security or Medicaid
If an error has been made on an order ticket and the trade is confirmed, what's the status of the order? - ANSWER - The trade is considered to be binding on the client.
What's the lowest investment grade rating that Moody's provides for municipal notes? - ANSWER - MIG 3
Mrs. Ima Holder purchased 10 RFQ July 60 calls. RFQ declares a 50% stock dividend. After the dividend has been distributed, Mrs. Holder now owns: - ANSWER - 10 contracts for 150 shares each
Which statement BEST describes a sinking fund? - ANSWER - A fund that the issuer regularly pays into to satisfy any redemptions prior to maturity or on the maturity date.
Which security represents a claim to foreign securities with the actual securities being held by U.S. banks located overseas? - ANSWER - American depositary receipts (ADRs)
The price that a market maker is willing to buy securities is referred to as the maker maker's: - ANSWER - Bid
What's the term for the practice of selling a security to generate a capital loss and then replacing it by repurchasing another security? - ANSWER - Tax Swap
A designated market maker (DMM) may not accept which of the following orders? - ANSWER - Not-held- order
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