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  3. SERIES 7

FINRA SERIES 7 Exam (page: 13)
FINRA General Securities Representative ination (GS)
Updated on: 25-Dec-2025

Viewing Page 13 of 81
SERIES 7 PDF 400 Questions

FINRA advertising standards permit a dealer to state that a CMO has an implied AAA rating if the securities are issued:

  1. with an average life no longer than ten years
  2. by a US government agency
  3. by a private issuer who has not yet received an expected AAA rating
  4. in amounts less than $1,000,000

Answer(s): B

Explanation:

by a US government agency. Since government agencies do not apply for ratings, it is permissible to state that its issues have an “implied AAA rating”. Private issuers must receive a rating in order to state it in advertising.



What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?

  1. tranche
  2. tier
  3. bracket
  4. bucket

Answer(s): A

Explanation:

tranche. That’s the term used to describe a separate class within a CMO issue.



Bubba is buying a Federal Home Loan Bank issue that is offered at 95.22. How much will he pay to purchase one bond?

  1. $95.22
  2. $951.63
  3. $952.20
  4. $956.88

Answer(s): D

Explanation:

$956.88. The price of 95.22 means 95 and 22 / 32. One thirty-second of a $1,000 bond with a par of 100.00 is $0.3125. Twenty-two thirty-seconds is therefore about $6.88. The 95 is the percentage of one bond with a par value of $1,000. Multiplying 95% by $1,000 equals $950. Adding $6.88 plus $950 equals $956.88.



How much currency is one mil worth?

  1. one-tenth of one cent
  2. one-tenth of $1
  3. one-tenth of $100
  4. one-tenth of $1,000

Answer(s): B

Explanation:

one-tenth of one cent. A point equals $10 and a basis point equals ten cents.



Which of the following pays interest at maturity only?

  1. a corporate serial bond
  2. US treasury bills
  3. Income bonds
  4. Series H savings bonds

Answer(s): B

Explanation:

US treasury bills. T-bills are purchased at a discount and do not have interest coupons. When surrendered, the par value is paid at maturity. All the other choices, if they are paying any interest, pay throughout the term of the issue.



Viewing Page 13 of 81



Share your comments for FINRA SERIES 7 exam with other users:

Karan Patel 8/15/2023 12:51:00 AM

yes, can you please upload the exam?
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