FINRA FINRA-SERIES-7 Online Practice Questions and Exam Preparation

FINRA FINRA-SERIES-7 Online Questions & Answers

• Question 291:

  What is the maximum amount of gift to customers or other individuals related to the securities business that a registered representative is permitted to give?

  A. $500
  B. $200
  C. $100
  D. $50
  C. $100

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  Explanation/Reference:

  $100. This is the maximum per FINRA rules.

• Question 292:

  Which of the following activities by a limited partner may subject the partner to unlimited liability?

  A. participating in management of the partnership
  B. committing the partnership in any manner
  C. making loans beyond those specified in the partnership agreement
  D. all of the above
  D. all of the above

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  Explanation/Reference:

  all of the above. Each of these actions by a limited partner causes the loss of limited liability.

• Question 293:

  Which of the following would not be subject to the holding period restrictions under Rule 144?

  A. restricted stock acquired via investment letter
  B. restricted stock acquired via stock options plan
  C. restricted stock acquired via private placement
  D. restricted stock acquired via open market purchase
  D. restricted stock acquired via open market purchase

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  Explanation/Reference:

  restricted stock acquired via open market purchase. The two-year holding period does not apply when the security is acquired in the open market. However, if the security is owned by a control person, the other provisions of Rule 144 do apply.

• Question 294:

  Which of the following are not flat rate taxes?

  A. excise tax
  B. gasoline tax
  C. gift tax
  D. general income tax
  C. gift tax

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  Explanation/Reference:

  gift tax. By definition, gift tax is a progressive tax. All of the others are a level percentage.

• Question 295:

  A provision under which an underwriter can cancel a proposed public offering due to some unforeseen occurrence is known as a:

  A. blue sky provision
  B. contra-market clause
  C. fill or kill provision
  D. market-out clause
  D. market-out clause

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  Explanation/Reference:

  market-out clause. This is used only in the case of some unusual occurrence.

• Question 296:

  Which of the following best describes phantom income?

  A. income from deductions and tax credits
  B. the non-taxable portion of a distribution
  C. income received but not reported
  D. income reported but not received
  D. income reported but not received

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  Explanation/Reference:

  income reported but not received. Reportable income that is not distributable includes loan forgiveness.

• Question 297:

  Which of the following does not appear in a municipal syndicate letter to underwriters?

  A. the specific bid and offering terms of the issue
  B. the amount of each member's participation
  C. the extent of the manager's authority in directing the offering
  D. the duration of the syndicate account
  A. the specific bid and offering terms of the issue

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  Explanation/Reference:

  the specific bid and offering terms of the issue. The bid and offering terms are determined after the syndicate letter to underwriters.

• Question 298:

  Which of the following does not decrease basis?

  A. cash or property paid out
  B. depletion of real property
  C. losses
  D. income from extraordinary sources
  D. income from extraordinary sources

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  Explanation/Reference:

  income from extraordinary sources. Single events, such as the sale of property, do not affect basis.

• Question 299:

  Convertible bonds have all of the following features except:

  A. an ability to protect a short position on the stock into which they are convertible
  B. permissibility for use as collateral
  C. a normally higher yield than non-convertible bonds of the same issuer
  D. fluctuations influenced by changes in the price of the underlying common stock
  C. a normally higher yield than non-convertible bonds of the same issuer

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  Explanation/Reference:

  a normally higher yield than non-convertible bonds of the same issuer. Remember that the question says "except" for this feature. Convertible bonds normally do NOT have a higher yield than non-convertible bonds of the same issuer. Convertibles usually have a lower yield than non -convertible sisters.

• Question 300:

  Maintaining a fair and orderly market and acting as a broker's broker are dual functions of the:

  A. competitive trader
  B. odd-lot dealer
  C. specialist
  D. two-dollar broker
  C. specialist

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  Explanation/Reference:

  specialists. This description defines the function of the specialists.