Finra Series-7 Exam - Topic 2 Question 119 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 119
Topic #: 2

[All Series-7 Questions]

Which of the following is not a practice of a mutual fund custodian?

Achanging shareholder registrations on the fund's records

Bdisbursing dividends and capital gains to the fund's shareholders

Clending the fund's securities to banks or broker/dealers

Dmaintaining sales records for the fund's underwriter

Show Suggested Answer

Suggested Answer: C

lending the fund's securities to banks or broker/dealers. This practice is not permitted under federal law.

by Gregg at Nov 21, 2025, 04:58 PM

Limited Time Offer

25%

Off

Get Premium Series-7 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Malcom

2 months ago

C is definitely not a custodian's practice. Solid reasoning!

upvoted 0 times

...

Nikita

2 months ago

I chose A. Changing registrations feels like a fund manager's job.

upvoted 0 times

...

Bronwyn

2 months ago

Definitely C. Lending isn't their role.

upvoted 0 times

...

Joanna

2 months ago

They really don’t handle sales records? That’s surprising!

upvoted 0 times

...

Yvonne

2 months ago

D seems like the odd one out to me.

upvoted 0 times

...

Gail

3 months ago

Wait, are you sure about that? I thought they did!

upvoted 0 times

...

Mariann

3 months ago

I agree, custodians don’t lend securities.

upvoted 0 times

...

Xuan

3 months ago

C is definitely not a custodian's job.

upvoted 0 times

...

Salena

4 months ago

Haha, the custodian is like the bank teller of the mutual fund world. They just handle the boring stuff, not the fun stuff like lending securities.

upvoted 0 times

...

Na

4 months ago

D seems like the correct answer. Maintaining sales records is the underwriter's responsibility, not the custodian's.

upvoted 0 times

...

Chantell

4 months ago

I think the answer is C. Lending securities is not a custodian's job.

upvoted 0 times

...

Gail

4 months ago

Lending securities sounds like something a custodian would do, but I can't recall if it's a core function or not.

upvoted 0 times

...

Annelle

4 months ago

I feel like changing shareholder registrations might be something they do, but I'm not completely confident about that.

upvoted 0 times

...

Kandis

4 months ago

I remember a practice question about custodians and their roles, and I think they definitely do disburse dividends, so that can't be the answer.

upvoted 0 times

...

Phillip

5 months ago

I think the custodian is involved in managing assets, but I'm not sure if they handle sales records for underwriters.

upvoted 0 times

...

Yasuko

5 months ago

Ugh, I'm still a bit confused on the exact responsibilities of a mutual fund custodian. Guess I need to review that section again before the exam.

upvoted 0 times

...

Carmelina

5 months ago

I'm leaning towards C as the answer, since lending securities doesn't seem like a core custodian duty. But I'll double-check my notes to be sure.

upvoted 0 times

...

Juliann

5 months ago

I feel like D could be tricky too. But it's more about sales.

upvoted 0 times

...

Maddie

5 months ago

Agreed, C seems off. They focus on safekeeping.

upvoted 0 times

...

Miriam

5 months ago

I think it's C. Custodians don't lend securities.

upvoted 0 times

...

Aleta

6 months ago

I'm pretty confident the custodian doesn't handle sales records for the underwriter. That seems more like an administrative function.

upvoted 0 times

...

Colette

6 months ago

B is the right answer. Disbursing dividends and gains is a key custodian function.

upvoted 0 times

...

Chi

6 months ago

Okay, let's see. I know the custodian handles things like shareholder records and distributions, but lending securities? That doesn't sound right.

upvoted 0 times

...

Luisa

6 months ago

Hmm, this one seems tricky. I'll need to think through the different responsibilities of a mutual fund custodian.

upvoted 0 times

Louvenia

26 days ago

D seems more like an underwriter's role. Custodians don't maintain sales records.

upvoted 0 times

...

Sabina

1 month ago

True, but that's still part of record-keeping, right?

upvoted 0 times

...

Sabra

1 month ago

But what about A? Changing shareholder registrations sounds important too.

upvoted 0 times

...

Vincent

1 month ago

Yeah, I agree. Custodians usually handle records and distributions.

upvoted 0 times

...

Laura

2 months ago

I think it's C. Lending securities doesn't seem like a custodian's job.

upvoted 0 times

...