Series 7 exam question

Here is a question on Municipal bond underwritings from the series 7 exam

Regarding a municipal bond underwriting, which of the following is a violation?

(A) An MSRB member that acts as a financial advisor for the issuer submits a competitive bid with the issuer's approval.
(B) An MSRB member that acts as the advisor to the issuer offers the new bonds to a list of current bondholders obtained from the issuer.
(C) An MSRB member who is a financial advisor to an issuer terminates the relationship to submit a negotiated bid
(D) An MSRB member that had a financial advisory relationship with the issuer discloses its total compensation for a negotiated underwriting.

(B) A firm may never use the information it obtains from an issuer to solicit sales or new business.

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A Series 7 and Series 24 Exam Question on Discretionary Accounts

Here is a good question on a discretionary account that shows up on the Series 7 exam and series 24 exams:

An investor has given their representative the authority to purchase and sell securities in their account without first consulting them. Which of the following is not true?

A. The authority must be evidenced in writing
B. The account must be reviewed more frequently
C. All transactions must be approved by a principal, prior to execution
D. The investor is bound by the transactions made by the representative


C) All of the choices listed are correct except the transaction do not have to be approved by a principal prior to execution.

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UGMA Custodians

Responsibilities of the Custodian

The custodian has a fiduciary duty to manage the account prudently for the benefit of the minor child within certain guidelines. Such as:

No margin accounts
No high risk securities, such as penny stocks
Custodian may not borrow from the account
No commodities
No speculative option strategies
Custodian may not give discretion to a third party
All distributions must be reinvested within a reasonable time
The custodian may not let rights or warrants expire. They must be exercised or sold.
The custodian must provide support for all withdrawals from the account
Withdrawals may only be made to reimburse the custodian for expenses incurred in connection with the operation of the account or for the benefit of the minor

Questions relating to custodial and UGMA accounts appear on the series 6 exam, series 7 exam, series 24 exam, series 26, exam, series 62 exam, series 65 exam, and series 66 exam

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Technical Terms For The Series 7 Exam

Upward Trendlines: An upward trendline is characterized by a series of higher highs and a series of higher lows. A chartist would draw a line connecting the series of higher lows to confirm the trend and the trendline should provide some support to the stock price.

Downward Trendlines: A downward trendline is characterized by a series of lower highs and a series of lower lows. A chartist would draw a line connecting the series of lower highs to confirm the downward trend and the trendline should provide some resistance to the stock price.

Reversals: A reversal indicates a significant change in the price action of the stock. A bullish reversal indicates the end of a downward trend and the beginning of a new upward trend. A bearish reversal indicates the end of an upward trend and the beginning of a new downward trend. One of the most significant reversal patterns is the head and shoulders formation. A head and shoulders top is a bearish reversal of an up trend, while a head and shoulders bottom is a bullish reversal of a downtrend.

Consolidation: A consolidation pattern is characterized by a horizontal movement in the stock price. Buyers and sellers are attracted to the market and are willing to trade the stock at almost the same prices.

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The NASDAQ Opening Cross

Questions on The NASDAQ Opening Cross appear on several exams including the series 7 exam, series 62 exam, series 55 exam and series 24 exam. Here is some good information on the opening cross to help you pass your exam!

The Opening cross begins at 9:28 AM. At this time the NASDAQ Market Center Execution System (Super Montage) automatically executes orders. Orders placed after 9:28 AM may not be cancelled. Orders placed after 9:28 AM may only be changed if the change to the order makes the order more aggressive. A change that increases the size of the order or improves the price would make the order more aggressive. For a buy order an improved price would be a higher limit price, for a sell order an improved price would be a lower limit price. All orders that are executed during the opening cross will be reported to ACT with a .T modifier. Take some free exam questions on our site at www.securitiesce.com

Happy New Year From The Securities Institute

Ok it is now 2007 hopefully we can once and for all answer the question of can I just do practice exams and pass my series 6 exam, series 7 exam, series 24 exam, series 26 exam, series 55 exam, series 62 exam, series 63 exam, series 65 exam, or series 66 exam? Absolutely not ! There are two skills required to pass any of the above exams. One is a knowledge component and one is the application of the knowledge. The textbook is designed to provide you with the knowledge required to pass the tests. The practice questions are designed to show you how to apply the knowledge on the test. This is not to say that you shouldn’t do as many practice questions as possible you should. But you must read the book thoroughly as well!!!!!
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