Free SERIES 7 Exam Braindumps (page: 29)

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What does the bond buyer placement ratio represent?

  1. the amount of municipal bonds held by banks and insurance companies as a percentage of municipal bonds outstanding
  2. the amount of municipal bonds distributed weekly as a percentage of each week’s new issue accounts of more than $1 million
  3. the amount of municipal bonds offered in the daily Blue List as a percentage of the day’s new issue amounts of more than $1 million
  4. the par value amount of municipal bonds offered in the Blue List as a percentage of the 30 -day visible supply for competitive and negotiated issues

Answer(s): B

Explanation:

the amount of municipal bonds distributed weekly as a percentage of each week’s new issue accounts of more than $1 million. This is the definition of the ratio.



How much money is a concession of 3/8 worth for one municipal bond?

  1. $0.375
  2. $3.75
  3. $37.50
  4. $375.00

Answer(s): B

Explanation:

$3.75. Three-eighths of a $1,000 bond with a par price of 100.00 equals $3.75.



Bubba is concerned about the liquidity of a possible municipal bond purchase. He is therefore probably most interested in the rating supplied by which of the following?

  1. the bond buyers
  2. Moody’s
  3. White’s
  4. Dow Jones

Answer(s): C

Explanation:

White’s. White’s ratings are based on trading market data as opposed to the financial data of the issue, which is used by Moody’s as well as S&P.



Which of the following forms of underwriting is least likely for an offering of municipal bonds?

  1. negotiated
  2. competitive bid
  3. firm commitment
  4. best efforts

Answer(s): D

Explanation:

best efforts. A best efforts deal least likely for a municipal securities offering. It is most often associated with small corporate stock or limited partnership offerings. Municipal securities are usually competitive bid or negotiated. Both of these types are firm commitment.






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