FINRA Series 7 Exam Practice Test 15

1. If a bond's YTM is 6 percent, which of the following would MOST likely be refunded by the issuer?

I. Coupon 6½ percent, maturing in 2040, callable in 2030 at 104

II. Coupon 5½ percent, maturing in 2040, callable in 2029 at 104

III. Coupon 5½ percent, maturing in 2040, callable in 2029 at 100

IV. Coupon 6½ percent, maturing in 2040, callable in 2030 at 100

2. Which of the following have ownership positions in a corporation?

I. Convertible bondholders

II. Convertible preferred stockholders

III. Common stockholders

IV. Mortgage bondholders

3. Common stockholders of PXPX Corporation have which of the following rights and privileges?

4. Which of the following types of preferred stock allows the investor to reduce inflation risk?

5. AylDec Corporation has been authorized to issue 20,000,000 shares of common stock. However, AylDec only issued 12,000,000 shares to the public. Six months later, AylDec repurchased 1,000,000 shares to increase the demand on their outstanding shares. How many shares of common stock does AylDec have outstanding?

6. Which of the following U.S. government securities are quoted on a discount yield basis?

7. On Wednesday, March 16, one of your customers purchases ten 6 percent Treasury bonds maturing in 2030. If the bonds pay interest on January 1 and July 1, how many days of accrued interest are added to the purchaser's price?

8. Jake Hanson lives in New York and is considering purchasing a bond. He has settled on either a 5 percent municipal bond offered by New York or a 7 percent corporate bond offered by The Greenhorn Corporation, which has headquarters in New York. Jake needs some guidance and you would like you to help him determine which bond will provide him with the greatest return. Which of the following information do you need to obtain before you can make the appropriate recommendation?

9. An investor who is long a call option will realize a profit if exercising the option when the underlying stock price is

10. One of your clients is new to investing and has limited resources. Which of the following investments would you least likely recommend to this investor?