Series 7|50 Final Practice Exam 1 Quiz Questions Well Solved|2024|24 Pages
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Course
Series 7
Institution
Series 7
A client of yours with a conservative level of tolerance for systematic risk and a fairly long time horizon has indicated that she would prefer to avoid substantial portfolio turnover. Your suitable recommendations would most likely be:
a tactical strategy
a passive strategy
an aggressive str...
A client of yours with a conservative level of tolerance for systematic risk and a fairly long time horizon
has indicated that she would prefer to avoid substantial portfolio turnover. Your suitable
recommendations would most likely be:
a tactical strategy
a passive strategy
an aggressive strategy
a hedged strategy - ✔ ✔ a passive strategy
A Eurodollar bond has each of the following characteristics except:
interest payments may be made in either US dollars or the currency of the nation in which the bond was
issued.
its interest payments will be made in US dollars only.
these bonds are issued by either US or foreign corporations but are not issued in the United States.
principal is repaid at maturity in US dollars. - ✔ ✔ interest payments may be made in either US
dollars or the currency of the nation in which the bond was issued.
Owners of Eurodollar bonds cannot elect to have their interest payments in foreign currency -- it must
be in U.S. dollars.
A margin account customer buys 100 shares of JKS common at 80 and deposits the required Reg. T
margin. A week later with JKS at 90, the account has SMA of:
,250
500
1000
2000 - ✔ ✔ $500
The initial purchase of $8,000 at 50% Reg. T requires a down payment of $4,000 and creates a loan from
the broker to the client of $4,000, referred to as the customer's debit balance. With the stock rising to
90, the CMV is now $9,000 while the debit balance does not change.The client's new equity is $5,000,
found by taking CMV minus debit balance = $9,000 minus $4,000.However, Reg. T only requires equity
of 50% of CMV, which on a $9,000 position is a Reg. T required equity of $4,500.Your client's equity of
$5,000 exceeds Reg. T by $500.The new equity of $5,000 minus the Reg. T equity of $4,500 = $500.This
$500 is commonly referred to as SMA, and is also called excess equity, also called Reg. T excess, and is
also referred to as the client's 'line of credit.'
A new stock issue may begin trading on NASDAQ
as early as the completion of the IPO
following the opening trade on the morning of the effective date
30 days after the effective date
after a 5 business day quiet period - ✔ ✔ following the opening trade on the morning of the effective
date.
there is no waiting period for new shares to begin trading in the secondary market.
A restricted margin account is one in which
the equity has fallen below the minimum maintenance requirement
, the equity has fallen below the 2,000 min. equity requirement
the customer is temporarily prohibited from accessing SMA
the equity is less than reg. t - ✔ ✔ the equity is less than reg. t
50% is the minimum
A wrap account is most appropriate:
for a client who actively trades
for a client who is predominantly a buy and hold investor
for a client wishing to follow a dollar cost averaging approach
for a client nearing retirement who will primarily be withdrawing rather than making new investments -
✔ ✔ for a client who actively trades.
wrap accounts do not charge commission on each trade but charge a fee for managing assets.
According to the rules and regulations of the Options Clearing Corporation and the options exchanges,
an equity call option may be covered by each of these except:
100 shares of the underlying common stock
cash equal to the aggregate exercise price of the option
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