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

FINRA FINRA-SERIES-7 Online Questions & Answers

• Question 381:

  Which of the following stock exchanges is not registered with the SEC?

  A. Pacific Stock Exchange
  B. Boston Stock Exchange
  C. Chicago Stock Exchange
  D. all are registered
  D. all are registered

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  Explanation/Reference:

  all are registered. All are registered with the SEC.

• Question 382:

  A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50. Three days later, when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer. The basis for the dealer's markup is:

  A. 10 5/8
  B. 19 7/8
  C. 23 1/2
  D. 5% above cost
  B. 19 7/8

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  Explanation/Reference:

  19 7/8. The markup is always based on the current market price, not upon cost. Therefore, the markup is based on the offering side of the current quotation.

• Question 383:

  The Bubba Corporation has 900,000 of common outstanding and holds 100,000 shares as treasury stock. At the end of the third quarter $450,000 is distributed as a dividend on the common. How much is the dividend per share?

  A. $0.45
  B. $0.50
  C. $2.00
  D. $2.22
  A. $0.45

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  Explanation/Reference:

  $0.45. Since treasury stock does not receive dividends, divide $450,000 by the outstanding 100,000 shares to arrive at $0.45 per share.

• Question 384:

  What type of mutual fund would invest in equities and bonds?

  A. dual purpose
  B. balanced
  C. technology
  D. growth
  B. balanced

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  Explanation/Reference:

  balanced. These funds invest for growth with stock and income with bonds.

• Question 385:

  Under what circumstances may a registered investment company change its investment objective?

  A. after SEC approval
  B. after it obtains a new charter from the state secretary
  C. after approval by a majority vote of the shareholders
  D. after providing notice that is recorded in the Federal Register
  C. after approval by a majority vote of the shareholders

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  Explanation/Reference:

  after approval by a majority vote of the shareholders. All vital interests of the shareholders are subject to their majority vote.

• Question 386:

  When depositors withdraw money from savings institutions to invest in US treasury securities, this is called:

  A. the multiplier effect
  B. disintermediation
  C. reverse repo
  D. open market operations
  B. disintermediation

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  Explanation/Reference:

  disintermediation. An easier word would be preferable, but that's the correct term.

• Question 387:

  Bubba buys a 5% bond that matures in 15 years with a 5.10 basis. How much did he pay for the bond?

  A. 5.00
  B. 98.96
  C. 100.00
  D. 105.10
  B. 98.96

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  Explanation/Reference:

  98.96. A calculator is not required for this. Even Bubba knows the bond is obviously trading at a slight discount by yielding 5.10% instead of the coupon rate of 5%. If the yield was the same as the coupon rate, the price is 100.00.

• Question 388:

  A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering. What is the subscription price per share?

  A. $4
  B. $6
  C. $7
  D. $10
  D. $10

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  Explanation/Reference:

  $10. There are one million shares divided into the $10 million of new capital.

• Question 389:

  Which of the following is not an intangible drilling cost?

  A. salaries
  B. supplies and fuel
  C. machinery and pipe
  D. repairs
  C. machinery and pipe

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  Explanation/Reference:

  machinery and pipe. These are tangible fixed assets and not associated with intangible drilling costs.

• Question 390:

  Which of the following types of investment companies pays out 90% of its net investment income to shareholders?

  A. diversified
  B. registered
  C. regulated
  D. balanced
  C. regulated

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  Explanation/Reference:

  regulated. Investment companies regulated by the Internal Revenue Code Subchapter M are required to pay out a minimum of 90% of their net income annually to their shareholders.