S7 Benchmark Exam QUESTIONS WITH
ANSWERS
The marketability of a municipal bond would be least
affected by - CORRECT ANSWERS ✔✔The par value:
NOT significant
A customer maintains a non-discretionary account at a
BD and leaves a voicemail message for his RR to execute
a trade, specifics of the order left in the message. The rep
may execute this order - CORRECT ANSWERS ✔✔Upon
receiving confirmation from the customer that this order
should be executed. A RR may not act strictly upon
instructions left in a voicemail message. The order must
be reconfirmed over the phone with the customer.
A 35-year old investor is considering the purchase of a Z-
tranche but does not want to incur a tax liability for
investment payments that will not be received until
maturity. To help this investor achieve his goal, a RR
might recommend that this security be carried in an -
CORRECT ANSWERS ✔✔individual retirement account
(tax-deferred retirement account, such as an IRA or
401(k) plan)
,A customer has been notified that the limit order placed
at the open this morning has been executed. The trade
report submitted to FINRA may exclude which of the
following items? - CORRECT ANSWERS ✔✔Common
charged to the customer
Trade reports submitted to FINRA are not required to
include the commission, mark-up or mark-down charged
to the customer.
Your client Barbara has investment objectives of growth
and aggressive income. Her portfolio consists of blue-
chips stocks, high yield bonds, and treasuries. Barbara
has been generally unhappy with the performance of her
portfolio and is seeking your advice. You should tell her to
- CORRECT ANSWERS ✔✔sell the Treasuries and buy
more blue-chip stocks paying a steady dividend.
Which of the following is the most stringent test of
liquidity? - CORRECT ANSWERS ✔✔(Cash + Marketable
securities) divided by current liabilities
The most stringent test of liquidity subtracts out all
current assets other than cash and marketable securities.
, State GO bonds are secured by - CORRECT ANSWERS
✔✔income, excise and sales taxes. Local GO bonds, such
as those issued by cities and counties, are backed by
property taxes and license fees.
A client has a restricted margin account. To place
additional trades in this account, - CORRECT ANSWERS
✔✔the client would need to deposit the full purchase
price on any trades until the restriction is lifted.
A corporation has $12MM net income after taxes, 5MM
common shares outstanding and $10MM of 6% preferred
stock ($100 par). What is the corporation's EPS? -
CORRECT ANSWERS ✔✔(net income - preferred
dividends) / # shares outstanding
$2.28
An investor anticipating that the FRB is likely to increase
its target fed funds rate would likely take which of the
following actions? - CORRECT ANSWERS ✔✔Buy US
listed EUR put options
When interest rates rise, the USD is likely to strengthen.
Therefore, foreign currencies would be expected to
weaken.
ANSWERS
The marketability of a municipal bond would be least
affected by - CORRECT ANSWERS ✔✔The par value:
NOT significant
A customer maintains a non-discretionary account at a
BD and leaves a voicemail message for his RR to execute
a trade, specifics of the order left in the message. The rep
may execute this order - CORRECT ANSWERS ✔✔Upon
receiving confirmation from the customer that this order
should be executed. A RR may not act strictly upon
instructions left in a voicemail message. The order must
be reconfirmed over the phone with the customer.
A 35-year old investor is considering the purchase of a Z-
tranche but does not want to incur a tax liability for
investment payments that will not be received until
maturity. To help this investor achieve his goal, a RR
might recommend that this security be carried in an -
CORRECT ANSWERS ✔✔individual retirement account
(tax-deferred retirement account, such as an IRA or
401(k) plan)
,A customer has been notified that the limit order placed
at the open this morning has been executed. The trade
report submitted to FINRA may exclude which of the
following items? - CORRECT ANSWERS ✔✔Common
charged to the customer
Trade reports submitted to FINRA are not required to
include the commission, mark-up or mark-down charged
to the customer.
Your client Barbara has investment objectives of growth
and aggressive income. Her portfolio consists of blue-
chips stocks, high yield bonds, and treasuries. Barbara
has been generally unhappy with the performance of her
portfolio and is seeking your advice. You should tell her to
- CORRECT ANSWERS ✔✔sell the Treasuries and buy
more blue-chip stocks paying a steady dividend.
Which of the following is the most stringent test of
liquidity? - CORRECT ANSWERS ✔✔(Cash + Marketable
securities) divided by current liabilities
The most stringent test of liquidity subtracts out all
current assets other than cash and marketable securities.
, State GO bonds are secured by - CORRECT ANSWERS
✔✔income, excise and sales taxes. Local GO bonds, such
as those issued by cities and counties, are backed by
property taxes and license fees.
A client has a restricted margin account. To place
additional trades in this account, - CORRECT ANSWERS
✔✔the client would need to deposit the full purchase
price on any trades until the restriction is lifted.
A corporation has $12MM net income after taxes, 5MM
common shares outstanding and $10MM of 6% preferred
stock ($100 par). What is the corporation's EPS? -
CORRECT ANSWERS ✔✔(net income - preferred
dividends) / # shares outstanding
$2.28
An investor anticipating that the FRB is likely to increase
its target fed funds rate would likely take which of the
following actions? - CORRECT ANSWERS ✔✔Buy US
listed EUR put options
When interest rates rise, the USD is likely to strengthen.
Therefore, foreign currencies would be expected to
weaken.
