FINRA Series 7 Exam Practice Test 20

1. Which of the following are true about the annuitization of a variable annuity?

I. The value of the annuity units is fixed.

II. The number of annuity units is fixed.

III. The value of the annuity units varies.

IV. The number of annuity units varies.

2. Which of the following investments requires a registered representative to obtain written verification of an investor's net worth?

3. One of your clients is interested in purchasing a stock with a beta of 1.6. You can tell them that

4. A head and shoulders bottom formation indicates

5. Michael Moneybags purchased 1,000 shares of WOW common stock at $26 per share. Six months later, WOW is trading at $60 and Michael expects a slight decline in the market price for a short period of time. However, Michael has a lot of confidence that WOW is a great company and he remains bullish on WOW's common stock overall. Providing Michael is correct in his assessment, which of the following positions would provide Michael a level of protection while still being able to generate additional income?

6. One of your customers purchases 100 shares of ARGH at 44.10 and 1 OEX Sep 360 put at 4.50. A few months later, ARGH is trading at 42.55 and the OEX index is trading at 349. If your customer closes the stock position and exercises their OEX put, what is their gain?

7. All-or-none orders must be

8. To process an ACAT, a brokerage firm must be a member of the

9. All of the following increase SMA in a long account EXCEPT

I. selling securities from the account

II. the purchase of additional securities in the account

III. receipt of a cash dividend

IV. a decrease in the market value of securities held in the account

10. DEF Corporation issued stock to the public at $9 per share. If the manager's fee was $0.15 per share, the takedown was $0.50 per share, and the concession was $0.30 per share, what was the spread?

11. Which of the following customer orders are discretionary?

I. Buy 1,000 shares of a growth company

II. Buy or sell 500 shares of LMN

III. Buy or sell as many shares of TUV as you think I can handle

12. Which of the following is true regarding dark pools of liquidity?

I. They represent pools of institutional and large retail clients.

II. They reduce the amount of transparency of information relating to securities trading.

III. Firms trading for their own inventory may be included.

IV. Trades executed by the pools are reported as exchange transactions.

13. Mutual funds must send financial statements to shareholders at least

14. Which of the following needs to be filled out on a new account form?

I. The customer's name and address

II. The customer's date of birth

III. The type of account

IV. The customer's investment objectives

15. What is the minimum amount of assets your client must have in order to establish a prime brokerage account?

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