Finra Exam Series-7 Topic 2 Question 64 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 64
Topic #: 2

[All Series-7 Questions]

An advertisement for a CMO security by a member of FINRA should disclose which of the following?

Athe exact yield investor will earn

Bthe yield based upon the prevailing discount rate

Cthat the stated yield is an estimate that may vary passed upon prepayments and market factors

Dthat the yield may be greater than the stated percentage but never less

Show Suggested Answer

Suggested Answer: A

$0.45. Since treasury stock does not receive dividends, divide $450,000 by the outstanding 100,000 shares to arrive at $0.45 per share.

by Lisha at Jan 06, 2023, 06:14 PM

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6 days ago

I'm not sure, but I think it's important to be transparent about potential variations in yield.

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14 days ago

I agree with Rochell, it makes sense to disclose that the yield is an estimate.

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17 days ago

I think the answer is C.

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