Series 7

Series 7 practice questions, page 10 of 16, with answer review and explanations.

Question 46

Bubba Corporation owes income tax. Which of the following may be tendered at par value for payment of the tax?

  1. term bond
  2. tax anticipation bill
  3. special tax bond
  4. pre-issue bond

Question 47

An advertisement for a CMO security by a member of FINRA should disclose which of the following?

  1. the exact yield investor will earn
  2. the yield based upon the prevailing discount rate
  3. that the stated yield is an estimate that may vary passed upon prepayments and market factors
  4. that the yield may be greater than the stated percentage but never less

Question 48

Which of the following statements incorrectly describes US securities markets?

  1. a capital market comprised of long-term debt and equity issues
  2. a money market comprised of short-term debt and equity issues
  3. a municipal market comprised of tax-exempt issues of state and local governments
  4. a government and agency market comprised of both short-term and long-term debt issues

Question 49

What rate of return takes into consideration appreciation or depreciation in market value relating to the par value of a debt security?

  1. current yield
  2. yield to maturity
  3. nominal yield
  4. basis yield

Question 50

Which of the following is not an attribute of US treasury bills?

  1. an unusually high degree of liquidity
  2. always sells at a discount to face value
  3. is most often issued with three-month, six-month, and one-year maturities
  4. interest is exempt from federal income taxes