Series 7 Exam Practice Test 22

1. You have a new client who is in a high tax bracket and is looking for investments with a tax advantage. Which of the following securities would you LEAST likely recommend?

2. An investor wants to generate some income on a stock that they believe will remain at relatively the same price for the next year or so. Which of the following option positions would meet their goal?

3. Adjustable-rate preferred stock has a dividend that adjusts according to

4. Regulation SHO covers the

5. Which of the following items are found on an indenture of a bond?

I. The maturity date

II. Callable or convertible features

III. The coupon rate

IV. The name of the trustee

6. As part of the USA Patriot Act of 2001, all financial institutions must maintain:

7. Which of the following are important to investors evaluating direct participation programs?

I. The economic soundness of the program

II. The expertise of the general partner

III. The basic objectives of the program

IV. The start-up costs

8. What is the required beginning date (RBD) for traditional IRAs?

9. The initial maturity for Treasury Inflation Protected Securities is

10. One of your clients is expecting to receive a lot of money over the next three years. Your client would like to shelter some of that money by investing in a DPP. Which of the following types of DPPs will help your client shelter the most money?

11. Which of the following governmental bodies receives no revenue from ad-valorem taxes?

12. According to MSRB rules, a customer confirmation must include

13. John believes that the market is about to become bearish and would like to be able to profit in the event that he is correct. Which of the following investments would meet John's needs?

I. Inverse ETFs

II. Selling SPX calls

III. High-yield bond funds

IV. Selling OEX puts

14. Ferret Enterprises pays a quarterly dividend of $0.25 per share and has an EPS of $2.50. What is the dividend payout ratio?

15. Gerry Goop purchases a new OID municipal zero-coupon for 80. If Gerry holds the bond to maturity, what is his tax consequence?

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