FINRA Series-7 - General Securities Representative Qualification Examination (GS) Exam

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Total 400 questions

Which of the following is not a practice of a mutual fund custodian?

  • A. changing shareholder registrations on the fund’s records
  • B. disbursing dividends and capital gains to the fund’s shareholders
  • C. lending the fund’s securities to banks or broker/dealers
  • D. maintaining sales records for the fund’s underwriter


Answer : C

Explanation:
lending the funds securities to banks or broker/dealers. This practice is not permitted under federal law.

If a customer fails to pay for securities purchased in a cash account, the member firm broker will do which of the following?

  • A. grant an extension for a bona fide reason
  • B. place the securities temporarily in a general account
  • C. purchase the securities for the firm’s error account
  • D. liquidate the securities or otherwise cancel the transaction


Answer : D

Explanation:
liquidate the securities or otherwise cancel the transaction. Reg T requires the position closed if the customer fails to comply with the rules. An extension may be granted, but not by the member firm. Only an exchange or the FINRA grants extensions for bona fide reasons.

The general purpose of the Securities Act of 1933 is to:

  • A. regulate the activities of investment advisers
  • B. regulate the sale of securities on national exchanges
  • C. provide for disclosure of information about new securities offerings
  • D. provide for disclosure of the financial condition of underwriters


Answer : C

Explanation:
provide for disclosure of information about new securities offerings. The 1933 act is primarily concerned with registration and disclosures relating to new securities.

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?

  • A. It provides the SEC with adequate information on which to base approval for new issues
  • B. It does not imply SEC approval of the issue
  • C. It guarantees purchasers against an untrue statement of material fact or an omission of material fact
  • D. It relieves participating underwriters from any further responsibility for checking essential facts before recommending purchase to the customers


Answer : A

Explanation:
It does not imply SEC approval of the issue. The SEC does not approval an issue. It only attempts to see that sufficient information has been provided from which a proper investment determination may be made.

Which of the following is not an attribute of US treasury bills?

  • A. an unusually high degree of liquidity
  • B. always sells at a discount to face value
  • C. is most often issued with three-month, six-month, and one-year maturities
  • D. interest is exempt from federal income taxes


Answer : D

Explanation:
interest is exempt from federal income taxes. This is the choice that is not an attribute of treasuries. All of the other choices are attributes of US treasury bills, which are subject to federal income taxes.

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Total 400 questions