Series-7 Exam Questions Tutorials

General Securities Representative Qualification Examination (GS) Questions and Answers

Question 21

Which of the following does not decrease basis?

cash or property paid out

depletion of real property

losses

income from extraordinary sources

Question 22

In mid-September, Bubba sells one XYZ February 50 call at $6. It subsequently expires without being exercised.

How is the premium taxed?

Bubba’s cost of the underlying stock is reduced

the $600 premium is a capital gain

the $600 premium constitutes ordinary income

the $600 premium is rolled over into another XYZ call with the next longest expiration date

Question 23

Which of the following best describes phantom income?

income from deductions and tax credits

the non-taxable portion of a distribution

income received but not reported

income reported but not received

Question 24

The practice of positioning stock in response to a customer’s order and immediately after marking it up for resale to the customer is:

a factor to consider in the FINRA guideline

a simultaneous transaction

a riskless transaction

all of the above