2023 Latest 100% Exam Passing Ratio - Series-7 Dumps PDF
Pass Exam With Full Sureness - Series-7 Dumps with 402 Questions
One of the main benefits of passing the GS exam is that it allows individuals to become registered for the sale of all types of securities products – including stocks, options, and mutual funds. The GS exam is a prerequisite for individuals who want to move on to more specialized exams, such as the Series-6 or Series-63 exams.
NEW QUESTION # 229
Under Regulation T, when must money be deposited to cover requirements for Bubba's new purchases on margin?
- A. no later than the seventh business day after the trades
- B. on the next business day following the trades
- C. no later than the fifth business day after the trades
- D. on the day of the trades
Answer: C
Explanation:
no later than the fifth business day after the trades. Bubba should pay up no later than the fifth business day.
NEW QUESTION # 230
What expression is used to describe the application of income and revenues derived from the operation of a facility financed from proceeds of a revenue bond?
- A. debt service
- B. disbursement of priorities
- C. flow of funds
- D. revenue funding
Answer: C
Explanation:
Explanation/Reference:
Explanation: flow of funds. This is the definition of the term flow of funds.
NEW QUESTION # 231
In a competitive bidding for mortgage bonds of a large public utility the winning underwriter is determined by:
- A. the lowest net interest cost to the issuer
- B. the shortest maturity date for the bonds
- C. the refunding and sinking fund terms in the indenture
- D. the highest dollar amount paid to the issuer
Answer: A
Explanation:
Explanation/Reference:
Explanation: the lowest net interest cost to the issuer. All competitive bids are based upon the lowest interest cost.
NEW QUESTION # 232
The gross spread in a new issue depends upon which of the following?
- A. the type of industry in which the issuer is engaged
- B. all of the above
- C. the past record of the issuing corporation
- D. the amount of the issue
Answer: B
Explanation:
Explanation/Reference:
Explanation: all of the above. The gross spread (or "underwriting spread") depends upon all of these factors.
NEW QUESTION # 233
Bubba wishes to invest $50,000 in three mutual funds offered by different underwriters with growth as the main objective. A recommendation to purchase only one such fund for $50,000 might be more suitable to Bubba if:
- A. the income from one fund will be greater than the combined income in three
- B. a withdrawal plan would be easier to employ using a single fund
- C. the growth in one fund will be greater than the combined growth in three
- D. the purchase of one fund would probably be made at a break point allowing more dollars to be invested in fund shares
Answer: D
Explanation:
the purchase of one fund would probably be made at a break point allowing more dollars to be invested in fund shares. There is nothing inherently unsuitable about recommending three different funds. However, in most cases, a single fund offers satisfactory diversification and can be purchased with a reduction in sales charge.
NEW QUESTION # 234
A registered representative privately assures a customer that a certain stock will double within 18 months. During this period the stock the stock performs as predicted.
Which of the following statements is true?
- A. this is a violation because the SEC requires all information about stock prices to be publicly announced
- B. this statement constituted a form of fraud prohibited under the Securities Exchange Act of 1934
- C. the comment is permissible only if the representative had been registered with the SEC under the Investment Advisors Act of 1940
- D. the commentary was permissible because the stock advanced as the registered representative forecast
Answer: B
Explanation:
this statement constituted a form of fraud prohibited under the Securities Exchange Act of 1934. Such statements are fraudulent when rendered even if future events result in their accuracy.
NEW QUESTION # 235
A 5% markup policy applies to:
- A. riskless transactions
- B. registered secondaries
- C. primary distributions
- D. mutual funds
Answer: A
Explanation:
riskless transactions. The markup policy applies to everything except securities sold under a prospectus, which is the case with the other choices.
NEW QUESTION # 236
Which of the following is not provided for by Blue Sky laws?
- A. registration of representatives
- B. registration of securities dealers
- C. registration of securities offered in the state
- D. interstate mail fraud in securities offerings
Answer: D
Explanation:
Explanation/Reference:
Explanation: interstate mail fraud in securities offerings. Blue Sky laws are state security laws and do not cover interstate regulations.
NEW QUESTION # 237
An excerpt from a recent tombstone ad reveals bonds offered publicly at 101.
Why were they priced at a premium?
- A. to reflect prevailing credit ratings and market conditions for the issuer
- B. to comply with SEC rules mandating such pricing for debt issues maturing in the year 2000 and thereafter
- C. to provide the issuer with a larger deduction from pre-tax earnings for higher than usual interest payments
- D. to enable investors to establish a tax loss when the bonds are redeemed at maturity
Answer: A
Explanation:
to reflect prevailing credit ratings and market conditions for the issuer. Premiums or discounts are used in bond offerings to bring the yield in line with current market conditions.
NEW QUESTION # 238
Commercial paper is typically issued with a maturity date not exceeding:
- A. 6 months
- B. 1 year
- C. 270 days
- D. 90 days
Answer: C
Explanation:
270 days. A characteristic of commercial paper is relatively short duration, normally not exceeding 270 days.
NEW QUESTION # 239
Which of the following is not true about US treasury bills?
- A. they are issued in denominations of $1,000 to $1,000,000
- B. they are general obligations of the US government
- C. they are issued at a discount
- D. they are money market instruments
Answer: A
Explanation:
Explanation/Reference:
Explanation: they are issued in denominations of $1,000 to $1,000,000. Remember, the question asks what is "not" true. The smallest denomination for a US treasury bill is $10,000.
NEW QUESTION # 240
Which of the following options positions is characteristic of a short straddle?
- A. long one call and short one put
- B. long one call and long one put
- C. long one put and short one call
- D. long one put and short one call
Answer: D
Explanation:
long one put and short one call. This is a short straddle. A position that is long one put and long one call is a long straddle.
NEW QUESTION # 241
In a securities underwriting a participating firm is said to be liable severally but not jointly.
What is this type of underwriting is called?
- A. an all or none offering
- B. a Western account
- C. a best efforts offering
- D. an Eastern account
Answer: B
Explanation:
a Western account. In a Western account each underwriter has a divided liability and is responsible only for his portion of the issue. In Eastern accounts, generally used for municipal issues, the underwriter is responsible for a percentage of any unsold portion. This is called an undivided liability.
NEW QUESTION # 242
Municipal bonds would be least attractive as an investment for which of the following?
- A. a pension fund
- B. a commercial bank
- C. an insurance company
- D. the executive officer of an industrial corporation in the highest income tax bracket
Answer: A
Explanation:
a pension fund. Since the pension fund does not pay income tax, the tax benefits of the municipal bonds are not realized.
NEW QUESTION # 243
Which of the following rights does an ADR holder not have?
- A. the right to transfer ownership
- B. the right to vote for your mother-in-law as a board member
- C. the right to see financial statements
- D. preemptive rights
Answer: D
Explanation:
Explanation/Reference:
Explanation: preemptive rights. Holders of ADRs do not have preemptive rights, although they have most other rights of shareholders, including the right to vote for board members-even a mother-in-law
NEW QUESTION # 244
Assuming all of the following bonds from the same issuer are callable now, which one would most likely get called first?
- A. 4% maturing 1-15-2007
- B. 4% maturing 1-15-2012
- C. 8% maturing 1-15-2016
- D. 8% maturing 1-15-2007
Answer: C
Explanation:
8% maturing 1-15-2016. Bonds with the highest coupon rates would be the first to most likely get called. The issuer will look to issue new debt at a lower rate. Since there are two 8% bonds, the one that would most likely get called are those with the longest maturity.
NEW QUESTION # 245
Bubba's margin account has $1,000 of SMA,. If he buys $20,000 of listed secu rities, how much fully paid margin stock must he deposit to respond to a Reg T requirement of 50%?
- A. $18,000
- B. $9,000
- C. $20,000
- D. 10,000
Answer: A
Explanation:
$18,000. Fully paid marginable stock equal to the value of the purchase satisfies the requirement. Since Bubba's account already has $1,000 of SMA, this comprises buying power of $2,000. Therefore, he only needs to deposit the remaining $18,000.
NEW QUESTION # 246
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. $10
- B. $7
- C. $6
- D. $4
Answer: A
Explanation:
$10. There are one million shares divided into the $10 million of new capital.
NEW QUESTION # 247
Bubba buys a $4 convertible preferred with a $50 par value that is exchangeable for common stock at
47.50. If the preferred stock is trading at 52 and the common stock at 51, Bubba determines that the preferred stock is:
- A. selling at a 4% premium over conversion value
- B. overpriced and will quickly decline
- C. going to be called when the common stock price is $52
- D. underpriced and should rise quickly
Answer: D
Explanation:
Explanation/Reference:
Explanation: underpriced and should rise quickly. The parity price for the common stock is about $49.38 - determined as:50 / 47.50 = 1.053 52 / 1.053 = 49.38 Since the common stock is trading at 51, the preferred is underpriced.
NEW QUESTION # 248
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