Free FINRA Series-7 Practice Exam with Questions & Answers | Set: 2

convertible preferred. Because of the conversion feature, convertibles are more closely linked to the price of the common stock. In addition, since the dividend rate on convertible preferred is usually lower than other preferred issues, the convertibles are more sensitive to interest rate fluctuations.

a custodian under UGMA. The Uniform Gifts to Minors Act requires securities registration in the name of the custodian for the benefit of the minor. A margin account does not qualify because such an account has all securities registered in street name.

six months after the date of death. A second evaluation is made six months from the date of death. The estate may then use either value in determining estate tax.

$6,600. The NYSE maintenance requirement on short margin accounts is 30%. Multiplying the short market value of $22,000 by 30% equals $6,600.

one hundred shares of MST traded on the exchange and appears out of order on the tape.

The ticker symbol followed by “SLD” means that the print is out of sequence.

90 days. To avoid a forced sale, stock many be sold under Rule 144 over a 90-day period.

the certificate is validated by the transfer agent. A mutilated bond must be validated before it can be a good delivery. The validation can be made by the issuer or the transfer agent.

$1,000,000. In a Western account, each underwriter has divided liability and each is responsibility only for his respective part. In this case, Big Easy is responsible for 10% of $10,000,000 - or $1,000,000.

net asset value and redemption price. Investors redeeming shares of mutual funds receive the net asset value.

corporate bond. All of the other securities are issues backed by the US government, which are not considered funded debt.