FINRA FINRA-SERIES-7 - Questions & Answers

prospectus contains the significant facts about the issue. The SEC never approves of guarantees an issue.
It only attempts to verify that sufficient information is disclosed in the prospectus.

deductions from gross income to offset lower value of equipment. The cost of equipment is deducted from gross income over the life of the equipment, as its value declines.

selling the security he already owns. A "covered" call is written on stock already owned.

all of the above. All of the choices are required information for the registered representative to obtain.

rate of return. Because T-bills pay no interest, Bubba's rate of return is the discount as a percentage of the face value he receives at maturity.

the holder of each must pay income taxes on the dividends received each year. Only the holder of mutual fund shares must pay income tax on annual dividends. This is "not" true of annuity owners. The other choices are true statements.

the daily Bond Buyer. News is covered in the daily Bond Buyer as well as Munifacts, which is operated by the daily Bond Buyer. The Blue List shows only current offerings, not prospective ones.

granting of power of attorney to the limited partners. The other three choices are in the subscription agreement. Power of attorney is granted to the general partner, not the limited partners.

common stock. Leverage refers to the existence of securities that are senior to common stock. There can be debt leverage and equity leverage.

money spread. Since the strike prices are different, but not the expiration date, this is a money spread (sometimes called a "price spread" or a "vertical spread").