Free SERIES 7 Exam Braindumps (page: 50)

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In order to determine the amount of estate tax due, if any, the assets of a decedent’s estate are valued as of the date of death. A second evaluation is then made:

  1. three months after the date of death
  2. six months after the date of death
  3. one year after the date of death
  4. at any time up to six months after the date of death

Answer(s): B

Explanation:

six months after the date of death. A second evaluation is made six months from the date of death. The estate may then use either value in determining estate tax.



Under which of the following was SIPC established?

  1. Securities Act of 1933
  2. Securities Exchange Act of 1934
  3. Securities Investor Protection Act of 1970
  4. Securities Exchange Reform Act of 1975

Answer(s): C

Explanation:

Securities Investor Protection Act of 1970. SIPC was established under this act.



Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points.
Which of the following orders would be the best recommendation?

  1. sell limit order
  2. sell stop-limit order
  3. sell stop order
  4. buy stop order

Answer(s): B

Explanation:

sell stop-limit order. A sell stop-limit order specifies a price, but will not turn into a market order. This order will only get executed at the price or better. Stop orders, although quicker in execution, will turn into market orders and the customer will not be guaranteed a specific price. Stop -limit orders are risky, in that the order may or may not get executed, but in this situation, it is the best choice.



Assuming all of the following bonds from the same issuer are callable now, which one would most likely get called first?

  1. 8% maturing 1-15-2016
  2. 8% maturing 1-15-2007
  3. 4% maturing 1-15-2012
  4. 4% maturing 1-15-2007

Answer(s): A

Explanation:

8% maturing 1-15-2016. Bonds with the highest coupon rates would be the first to most likely get called. The issuer will look to issue new debt at a lower rate. Since there are two 8% bonds, the one that would most likely get called are those with the longest maturity.






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