Series 7

Series 7 practice questions, page 11 of 16, with answer review and explanations.

Question 51

Under which of the following conditions are homeowners most likely to refinance existing mortgages?

  1. when interest rates rise
  2. when interest rates fall
  3. when interest rates are stable
  4. when the yield curve is inverted

Question 52

Which of the following is not true about US treasury bills?

  1. they are issued at a discount
  2. they are money market instruments
  3. they are issued in denominations of $1,000 to $1,000,000
  4. they are general obligations of the US government

Question 53

CMOs are sold and priced based upon which of the following:

  1. expected average life
  2. stated maturity
  3. current yield
  4. par value

Question 54

FINRA advertising standards permit a dealer to state that a CMO has an implied AAA rating if the securities are issued:

  1. with an average life no longer than ten years
  2. by a US government agency
  3. by a private issuer who has not yet received an expected AAA rating
  4. in amounts less than $1,000,000

Question 55

What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?

  1. tranche
  2. tier
  3. bracket
  4. bucket