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Answers to Additional Sample Series 7 Questions



  1. (D) All of the above are considered self-regulatory organizations (SROs). Each has its own procedures to deal with improper activity within its own marketplace or among its own members. See ยง 5.1.

  2. (C) The Securities Act of 1933 (the "Paper Act") regulates registration of NEW ISSUES.

  3. (C) Only $3,000 in net capital loss can be written of against ordinary income in any given tax year.

  4. (C) These three accounts are considered individual investors. SIPC covers each individual investor for up to $500,000, $100,000 of which can be cash. Since none of the accounts have cash, and none have securities worth more than $500,000, the customers will receive the full value of their accounts a total of $1,100,000.

  5. (B) Self-explanatory.

  6. (C) This would be a Narrow Based Index, because it focuses on only one industry.

  7. (B) During periods of inflation interest rates increase, thus causing bond prices to decrease. If inflation declines rates go down, then bond prices would increase.