Free FINRA Series-7 Practice Exam with Questions & Answers | Set: 3

US Treasury bill. T-bills are quoted by yield. Therefore, the bid is higher than the asking price. A higher yield means a lower price.

next computed after receipt of the order by the dealer. This is called “forward pricing”.

Generally, the price is computed as of the close of the market on the day of the order. However, if the order is received after this computation, the order is executed based upon the next day calculation.

a pension fund. Since the pension fund does not pay income tax, the tax benefits of the municipal bonds are not realized.

deductions from gross income to offset lower value of equipment. Depreciation is the deduction of costs for capital assets as their value declines.

riskless transactions. The markup policy applies to everything except securities sold under a prospectus, which is the case with the other choices.

permits recovery of more than the original cost. Percentage depletion is only available for small producing wells.

the underwriter will be penalized his profit on any securities repurchased from his clients. Since clients sell shares back to the syndicate shortly after the offering, the underwriter has not made a proper distribution. The underwriter therefore may be penalized any profit.

FINRA. Sales literature regarding investment company shares must be filed with FINRA within three days after the first use.

cannot be determined. Bubba can put away the calculator. The warrant is “perpetual” so the value is not determinable from today’s price of the common stock.

European style. These options can only be exercised at the expiration date while American style options can be exercised at any time prior to expiration.