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Series 7 Sample Questions


1) A syndicate interested in underwriting a new issue of municipal bonds would most likely look in:

A) The Blue List
B) Munifacts
C) The Yellow Sheets
D) The Daily Bond Buyer

2) ABC Technologies a very volatile stock closes at $180 per share. Your customer has placed an order to sell 500 ABC at 165 stop limit 160 GTC. After the close the company announces bad earnings and the stock opens at 145. What happened to your customer's order ?

A) It has been cancelled because the stock price is below the limit price.
B) It has been cancelled since the stock price is below the stop price.
C) It has been elected and has become a limit order.
D) It has been elected and executed.

3) You establish the following position:

Short 5 XYZ NOV 70 Puts
Long 5 XYZ Nov 60 puts

Which of the following is or are true ?

I. This is a bear put spread
II. This is a bull put spread
III.This is a credit spread
IV. This is a debit spread

A) II and IV
B) I and III
C) I and IV
D) II and III

4) Your real estate limited partnership has taken out a recourse loan as an investor:

I. You can't be held liable
II.You can be held liable
III. It can't increase your cost basis
IV. It can increase your cost basis

A) II and IV
B) I and II
C) I and III
D) I only

5) Your existing customer has just been approved by your firm's ROP to trade options. How long do they have to return the signed options agreement ?

A) 45 days
B) 30 days
C) 15 days
D) 5 days

6) You have purchased municipal bonds who's proceeds have been used to build a new school in your town. The bonds are trading ex legal. What is the most likely reason for this.

A) The bonds are illegal
B) The legal opinion was lost
C) The legal opinion is in doubt
D) No legal opinion was obtained

7) List the following in order from the least important to the most important factors when considering investing in a DPP.

I. Tax considerations
II. Profitability
III. Liquidity
IV. Safety


8) You are long 10,000 share of XYZ at 42 and are concerned about a market decline and you would like to take in some additional income. You should:

A) Sell 10 XYZ Oct 45 puts
B) Sell 100 XYZ Oct 45 calls
C) Sell 100 XYZ Oct 45 puts
D) Sell 10 XYZ Oct 45 calls

9) Your state is selling municipal bonds to raise money to improve existing toll roads. The underwriting will most likely be awarded to a syndicate:

A) With the lowest NIC
B) With the lowest TIC
C) Through negotiation
D) Through competitive bid

10) A US importer is buying $10,000,000 worth of goods from a Japanese manufacturer. The payment will be made 6 months from now in Japanese Yen. To hedge themselves the US importer would do which of the following ?

A) Buy calls on the US dollar
B) Buy Calls on the Japanese Yen
C) Buy Puts on the Japanese Yen
D) Buy puts on the US dollar

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