CompTIA
Checkpoint
ISC
HP
Dell
EC-Council
EXIN
Fortinet
ITIL®
Juniper
PMI
Microsoft
VMware
Avaya
Google
Salesforce
Amazon
Palo Alto Networks
Certiport
ISC2
All Vendors
  2. Home
  3. Exams
  4. FINRA
  5. SERIES 7

Free SERIES 7 Exam Braindumps (page: 12)

Page 11 of 101
PDF with 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.






Post your Comments and Discuss FINRA SERIES 7 exam with other Community members:

SERIES 7 Discussions & Posts