Practice Quiz

FINRA Series 7

Category - Series 7

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FINRA advertising standards permit a dealer to state that a CMO has an implied AAA rating if the securities are issued:
  1. with an average life no longer than ten years
  2. by a US government agency
  3. by a private issuer who has not yet received an expected AAA rating
  4. in amounts less than $1,000,000
Explanation
Answer: B - by a US government agency. Since government agencies do not apply for ratings, it is permissible to state that its issues have an “implied AAA rating”. Private issuers must receive a rating in order to state it in advertising.
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