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Finra Series-7 Exam - Topic 1 Question 127 Discussion

Bubba has been classified as a restricted person according to Rule 2790. He may purchase equity securities of an IPO except:
D) when the new issue of securities is purchased pursuant to a best effort basis
A) to purchase securities to avoid dilution
B) when the new issue of securities is purchased pursuant to a stand-by agreement
C) when the transaction is exempt by an order of the FINRA

Finra Series-7 Exam - Topic 1 Question 127 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 127
Topic #: 1
[All Series-7 Questions]

Bubba has been classified as a restricted person according to Rule 2790. He may purchase equity securities of an IPO except:

Show Suggested Answer Hide Answer
Suggested Answer: D

when the new issue of securities is purchased pursuant to a best effort basis. All the other choices are allowable under the rule ''except'' this one.


by Johnna at May 31, 2026, 08:31 AM

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Malissa
2 days ago
Exactly! But it doesn't mean he can do it.
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Beula
7 days ago
But A is about avoiding dilution, right?
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Skye
12 days ago
I feel like A could be a valid option too.
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Dalene
17 days ago
I think it's D. Best effort basis is not allowed.
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Malissa
23 days ago
This question is tricky!
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Tom
28 days ago
Not sure about that, seems like a loophole waiting to be exploited.
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Wilbert
1 month ago
I think it’s only under certain conditions, like the stand-by agreement.
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Susana
1 month ago
Wait, can he really buy to avoid dilution? Sounds sketchy.
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Francoise
1 month ago
Totally agree, Rule 2790 is pretty clear on that!
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Kendra
2 months ago
A restricted person can't buy in an IPO, except in specific cases.
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Yuonne
2 months ago
I recall that Rule 2790 has a lot of nuances. I think the answer could be C, but I need to double-check what qualifies as an exemption.
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Latanya
2 months ago
I’m a bit confused about the stand-by agreement. Is that considered an exception for restricted persons?
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Nydia
2 months ago
This question reminds me of a practice question we did on IPO restrictions. I feel like option D might be the right answer, but I could be wrong.
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Ngoc
2 months ago
I think I remember that restricted persons have specific limitations, but I'm not entirely sure about the exceptions.
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