Series 7 Exam Practice Test 25

1. Which of the following investments are suitable for a 21-year-old investor who has limited resources but would like to start investing on a regular basis?

I. Growth funds

II. Collateralized debt obligations (CDOs)

III. Call options

IV. Hedge funds

2. Which of the following is true regarding Penny Stock Disclosure Documents?

3. Which of the following statements is TRUE regarding municipal revenue bond issues?

4. Jameson and Johnson Securities sent Alyssa a confirmation of her latest trade of Johnstone Corporation common stock. Which of the following items should be on the confirmation?

I. The trade date and the settlement date

II. Whether Jameson and Johnson acted as an agent or a principal

III. The name of the security and how many shares were traded

IV. The amount of commission paid if Jameson and Johnson acted as an agent

5. If a customer, Jessica James, gives limited power of attorney to her registered representative, which of the following is TRUE?

6. Which of the following is NOT a characteristic of a real estate investment trust (REIT)?

7. A principal is responsible for approving new accounts opened for

I. individuals

II. corporations

III. banks

IV. trusts

8. A customer of Dim Outlook securities decides to close their account. How long after closing the account must Dim Outlook keep the customer records?

9. When a corporation declares a cash dividend, which of the following is true in relation to the corporation's balance sheet?

10. George Lincoln opens a margin account and signs a loan consent, hypothecation, and credit agreement. Which of the following statements are TRUE?

I. George's stock may not be kept in street name.

II. A portion of George's stock may be pledged for a loan.

III. George will be required to pay interest on the money borrowed.

IV. George's stock must be cosigned by the broker-dealer.

11. Terri Hogan is a customer who wants to invest in securities. Which of the following is most likely to provide Terri with the highest dividend rate?

12. A Regulation D private placement is

13. To protect investors of variable life insurance policies who become disabled, there is a rider called a(n)

14. As a client's investment objectives change, a registered rep should keep track of those changes so that they can rebalance the client's portfolio and make proper recommendations. Which of the following changes may affect a customer's investment objectives?

I. Growing older

II. Getting divorced

III. Having triplets

IV. Getting a higher paying job

15. JKLM Corporation has declared a $0.40 dividend payable to shareholders of record on Thursday, September 14. What would happen to the opening price of JKLM on Wednesday, September 13?

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