Series-7 New Guide Files, Series-7 Exam Vce | Detailed General Securities Representative Qualification Examination (GS) Study Dumps

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NEW QUESTION 39
Bubba owns a subordinated debenture in a company that is liquidating.
When will he get paid?

  • A. after the shareholders of preferred stock
  • B. after the bills are paid and the bank is paid, but before the preferred shareholders
  • C. after the company pays its outstanding bills, but before paying bank loans
  • D. before the holders of secured debt

Answer: B

Explanation:
Explanation/Reference:
Explanation: after the bills are paid and the bank is paid, but before the preferred shareholders. As a creditor, Bubba is paid before any of the shareholders. But his position is subordinated to other creditors, like the bank and accounts payable.

 

NEW QUESTION 40
Which of the following are considered to be discretionary orders under the FINRA Rules of Fair Practice?

  • A. a customer gives a member firm a check for $25,000 and instructs the firm to purchase bank stocks and insurance company stocks when the prices appear to be favorable
  • B. a customer instructs her registered representative to sell 300 shares of ABC that is long in her account whenever the representative thinks the time and price are appropriate
  • C. a customer instructs her registered representative to purchase stock in XYZ whenever the representative deems the price to be right
  • D. both A and C

Answer: D

Explanation:
Explanation/Reference:
Explanation: both A and C.
Choice A is discretionary because the customer did not specify a quantity to purchase. Choice B only provides discretion about timing and thus is not discretionary. Choice C is clearly discretionary.

 

NEW QUESTION 41
In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.
If Bubba sells the stock at $45 in July, what is his resulting tax liability for that transaction?

  • A. a $400 gain
  • B. a $1,000 gain
  • C. no liability established until the offsetting option position is closed
  • D. a $400 capital loss

Answer: B

Explanation:
Explanation/Reference:
Explanation: a $1,000 gain. There is a $1,000 gain on the stock. The option is a separate capital asset.

 

NEW QUESTION 42
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