Practice Quiz

FINRA Series 7 Exam Prep - Question List

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16. The registration requirements of the federal securities acts are intended to protect the public interest by providing for a prospectus on new issues and its review by the SEC. Which of the following is the true of this process?
  1. It provides the SEC with adequate information on which to base approval for new issues
  2. It does not imply SEC approval of the issue
  3. It guarantees purchasers against an untrue statement of material fact or an omission of material fact
  4. It relieves participating underwriters from any further responsibility for checking essential facts before recommending purchase to the customers
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17. In a best efforts distribution of a new non-exempt issue, a broker/dealer:
  1. may allow a selling concession to a bank or trust company
  2. agrees to buy the issue at a specified price
  3. is not required to use an offering circular or prospectus
  4. acts as an agent for the issuer
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18. Who obtains and pays the municipal bond attorney rendering a legal opinion about the validity of the bond issue?
  1. the purchaser of the bonds
  2. the underwriter
  3. the issuing municipality
  4. the municipality’s financial adviser
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19. CMOs are sold and priced based upon which of the following:
  1. expected average life
  2. stated maturity
  3. current yield
  4. par value
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20. Which of the following is not classified as a money market instrument?
  1. banker’s acceptances
  2. commercial paper
  3. American Depository Receipts
  4. treasury bills
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