Free Access FINRA Series-7 New Release

Series 7 General Securities Representative Qualification Examination (GS) Questions and Answers

Question 33

Bubba buys a ten-year municipal and at 102 and sells it five years later at 101.

What is tax treatment?

a $10 long-term capital loss is realized

the $10 loss is applied as a reduction against ordinary income

no capital loss or income deduction is realized

the $10 loss is applied against future profits in municipal securities

Question 34

Which of the following is least relevant in evaluating the safety of a general obligation bond?

per capital debt

total GO debt as a percentage of market value of property

total GO debt as a percentage of assessed value of property

total debt service as a percentage of net operating revenue

Question 35

In stabilizing a new issue, the manager may make a “syndicate penalty bid”. This means that:

the underwriter will be penalized his profit on any securities repurchased from his clients

all stock purchased will be returned to the issuing corporation

the manager will charge the syndicate the value of the shares

any shares repurchased are added to the treasury stock of the issuing corporation

Question 36

What is the importance of the “at risk” rule?

it limits deductions to the amount at risk

it limits liability to the amount at risk

deductions for interest may not exceed investment income

it prevents carry forward of disallowed interest deductions