Series-7 FINRA Series 7 General Securities Representative Qualification Examination (GS) Free Practice Exam Questions (2025 Updated)

short straddle. A straddle is a put and call on the same stock with the same strike price and expiration date.

a legal authority created for this purpose. Bonds with a leaseback arrangement are issued by a specially created entity.

a shareholder may not redeem any shares for 13 months. Redemptions are permissible at any time. However, since escrowed shares are set aside to cover the difference in sales loads based on terms of the letter, redemptions prior to 13 months may liquidate the escrow account and thus return to the investor 100% of net asset value.

potential capital appreciation. This is the only correct choice. Any income is not deferred, raw land cannot be depreciation for a large deduction, and there is substantial risk.

a private placement. Normally, private placements are conducted with an investment letter.

a contractual plan. The other choices are not suitable. In a voluntary accumulation plan, the load is level. In an automatic withdrawal plan, the load is front -end because the bulk of the sales charge is taken early in the life of the plan.

NAV=$28.14 and Asked Price=$27.75. In this case the ask price is less than NAV, which is never true of an open-end investment company.

amortized over the life of the bond resulting in no loss at maturity. For tax purposes, premiums are amortized over the life of the bond. Some amount is taken each year.

takedown. The takedown is an additional allowance on bonds sold by a member.

the amount of municipal bonds distributed weekly as a percentage of each week’s new issue accounts of more than $1 million. This is the definition of the ratio.

their shares are traded at prices determined in the open market. The other choices describe open-end investment companies.

earnings retained after payment of dividends to shareholders. The other choices are clearly incorrect. Earned surplus is also referred to as retained earnings.

$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.

$6.19. The fund has a redemption fee of 1%. This is about 6 cents based upon the bid price. Subtracting that from the $6.25 bid results in $6.19.

when the underlying stock price is rising. That’s why the holder of this option wants to have a right to “call” the stock.

$13,350. Munis are not subject to Reg T. The NYSE maintenance requirement on munis is the greater of 15% of the market value or 7% of the principal amount.

open-end investment companies. Open-end mutual funds are a continuous offering of new securities that are not traded on an exchange. They trade only in the over-the-counter market. The other choices may trade over-the-counter or on exchanges.

a copy of the underwriting agreement. The underwriting agreement is “not” in the final prospectus. This is a contract between the issuer and the underwriting syndicate.

27.50. Anytime there is qualifying language attached to a quotation it is not considered firm.