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  1. Home
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  3. SERIES 7

FINRA SERIES 7 Exam (page: 9)
FINRA General Securities Representative ination (GS)
Updated on: 25-Dec-2025

Viewing Page 9 of 81
SERIES 7 PDF 400 Questions

Which of the following is not a characteristic of treasury bills?

  1. they are quoted on yield-to-maturity percentages
  2. their payments are exempt from state income tax
  3. the bid price is higher than the offer price
  4. they mature one to three years from the date of issuance

Answer(s): D

Explanation:

they mature one to three years from the date of issuance. Remember the QUESTION: asks what is “not” a characteristic of treasury bills. The other choices are aspects of treasury bills, which most commonly have maturities of 90 days but never longer than one year.



Which of the following price quotes is representative of a treasury bill?

  1. 98.9 - 100
  2. 96 - 96½
  3. 5.78 - 5.73
  4. 5.55 - 5.75

Answer(s): C

Explanation:

5.78 - 5.73. Prices for treasury bills are quoted as percentage yields. A quotation in yield means the first price in the spread - the bid price - should be higher than the offer price. A higher yield means a lower price.



Bubba want to buy a CMO. In general, how often should he expect to receive interest payments?

  1. every week
  2. every month
  3. every year
  4. at maturity

Answer(s): B

Explanation:

every month. Collateralized Mortgage Obligations generally pay interest each month. However, some CMOs pay interest quarterly or semiannually.



A CMO is issued that has three tranches. One has an average life of 2 years. A second has an average life of 10 years. The third has an average life of 30 years. Initially, interest payments are distributed in this order:

  1. first to the holders of the 2-year tranche
  2. first to the holders of the 10-year tranche
  3. first to the holders of the 30-year tranche
  4. equally to all CMO holders of any tranche

Answer(s): D

Explanation:

equally to all CMO holders of any tranche. All bondholders share equally in the interest payments. Only principal payments are directed to the owners in each tranche in sequential order.



Which of the following have a stated interest rate on the face of the certificates?

  1. treasury bills
  2. treasury notes
  3. treasury bonds
  4. both B and C

Answer(s): D

Explanation:

both B and C. Treasury notes and treasury bonds have stated interest rates. Treasury bills are always sold at a discount to the face amount payable at maturity.



Viewing Page 9 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?
UNITED STATES