FINRA-SERIES-7 Online Practice Questions and Answers

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. How many rights will the corporation distribute to its shareholders?

A. one million

B. six million

C. ten million

D. sixteen million

An option that permits the holder to exercise the contract only at expiration is referred to as:

A. European style

B. American style

C. Nordic style

D. Asian style

Initial margin deposit minimum requirements are set by the:

A. NYSE

B. FINRA

C. FRB

D. FDIC

Bubba buys an OTC stock from a firm that is a market -maker in the stock. What may be said about the price he pays?

A. it does not include a markup

B. it includes a markup

C. it includes a commission and a markup

D. it includes a special fee

Under which of the following was SIPC established?

A. Securities Act of 1933

B. Securities Exchange Act of 1934

C. Securities Investor Protection Act of 1970

D. Securities Exchange Reform Act of 1975

Which of the following statements is not true about exchange traded options?

A. they are adjusted for stock dividends

B. they are adjusted for stock splits

C. they are adjusted for cash dividends

D. they are adjusted for reverse splits

Bubba is eligible for a Roth IRA. He may convert his SEP-IRA to a Roth IRA:

A. without restriction

B. only after the two-year holding period

C. after a 90-day holding period

D. not ever

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

Which of the following is true about a customer with a frozen account?

A. may not trade corporate securities under any circumstances

B. may make purchases but not sales of corporate securities

C. must deposit the full purchase cost before an order is executed

D. must deposit sufficient cash for each transaction no later than the settlement date

Bubba sells short 100 XYZ at $60 and makes the required Regulation T deposit of 50%. XYZ then rises I price to $65. At this point what is the credit balance?

A. $2,500

B. $3,500

C. $6,000

D. $9,000