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Free FINRA Series-7 Practice Exam with Questions & Answers | Set: 4

Questions 31

The public offering price of the securities of an open-end management investment company is:

Options:
A.

determined by a method set forth in the prospectus of the issuer

B.

based upon net asset value of the securities underlying the shares of the issuer plus a 10 % sales charge

C.

determined by the relative demand for the shares of the issuer

D.

the price used by distributors in determining sales incentive discounts to individual purchasers

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Questions 32

An “accumulation unit” of a variable annuity is used to determine which of the following?

Options:
A.

the value of the annuitant’s contract before annuity payments begin

B.

the amount of annuity payments to be paid to the owner

C.

the amount to be passed to the annuitant’s beneficiary

D.

the amount returned to the annuitant upon redemption of the account

Questions 33

A four-letter symbol assigned to an issue is characteristic of an equity security that is:

Options:
A.

authorized for inclusion in the NASDAQ system

B.

listed on the NYSE

C.

admitted to unlisted trading privileges on a regional stock exchange

D.

trading in less than 100-share units on the American Stock Exchange

Questions 34

Which securities do not receive dividends?

Options:
A.

ADRs

B.

warrants

C.

common stock

D.

preferred stock

Questions 35

When does a call option provide the most value to its holder?

Options:
A.

when the underlying stock is extremely volatile

B.

in the month prior to its expiration

C.

when there is a large open interest in that class of option

D.

when the underlying stock price is rising

Questions 36

If a municipality has funds available to make a partial call of an issue of outstanding serial bonds, which bonds should be called first?

Options:
A.

the shortest maturity

B.

the maturity with the largest number of bonds

C.

the longest maturity

D.

the maturity bearing the lowest interest rate

Questions 37

Which of the following organizations usually has a prominent role in guiding investment policies of mutual funds?

Options:
A.

the plan company

B.

the management group

C.

the custodian bank

D.

the underwriter

Questions 38

Bubba Securities, Inc. offers 3,000,000 shares of Top Notch Manufacturing Corporation common stock at $27 per share. The next day an advertisement appears in the Wall Street Journal announcing the offering and listing the names of some of the underwriting firms.

This ad is commonly referred to as a:

Options:
A.

public offering

B.

tombstone ad

C.

sales directive

D.

syndicate announcement

Questions 39

Which of the following is not classified as a money market instrument?

Options:
A.

banker’s acceptances

B.

commercial paper

C.

American Depository Receipts

D.

treasury bills

Questions 40

Bubba and his wife, Bubbette, maintain a joint account with a brokerage firm as “joint tenants in common”. Bubbette calls a registered representative at the brokerage and places an order to sell 100 shares of XYZ, which is long in the account.

Which of the following statements is correct about this order?

Options:
A.

it may be entered

B.

it may be entered only after confirming with Bubba

C.

it must be approved by an officer of the brokerage prior to entry

D.

the order may not be accepted

Exam Code: Series-7
Certification Provider: FINRA
Exam Name: Series 7 General Securities Representative Qualification Examination (GS)
Last Update: Jul 9, 2025
Questions: 400

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