Free SERIES 7 Exam Braindumps (page: 18)

Page 17 of 101

Which of the following pays interest at maturity only?

  1. a corporate serial bond
  2. US treasury bills
  3. Income bonds
  4. Series H savings bonds

Answer(s): B

Explanation:

US treasury bills. T-bills are purchased at a discount and do not have interest coupons. When surrendered, the par value is paid at maturity. All the other choices, if they are paying any interest, pay throughout the term of the issue.



Which of the following securities has the highest amount of market risk?

  1. US treasury bills
  2. US treasury certificates
  3. US treasury notes
  4. savings bank deposits

Answer(s): C

Explanation:

US treasury notes. Savings bank deposits have no risk. The short duration of treasury bills and certificates embodies less market risk than longer-term treasury notes.



Which of the following is not a marketable security?

  1. tax anticipation bonds
  2. municipal bonds
  3. treasury bonds
  4. Series EE bonds

Answer(s): D

Explanation:

Series EE bonds. All the other securities may be traded. Series EE bonds are purchased and held to maturity. They are not tradable.



What type of security is quoted with a bid price of 4.72 and an asking price of 4.68?

  1. US treasury note
  2. US treasury bill
  3. US treasury bond
  4. Series H bond

Answer(s): B

Explanation:

US Treasury bill. T-bills are quoted by yield. Therefore, the bid is higher than the asking price. A higher yield means a lower price.






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