Finra Series-7 Exam - Topic 3 Question 113 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 113
Topic #: 3

[All Series-7 Questions]

In a securities underwriting a participating firm is said to be liable severally but not jointly.

What is this type of underwriting is called?

Aa Western account

Ban Eastern account

Ca best efforts offering

Dan all or none offering

Show Suggested Answer

Suggested Answer: A

a Western account. In a Western account each underwriter has a divided liability and is responsible only for his portion of the issue. In Eastern accounts, generally used for municipal issues, the underwriter is responsible for a percentage of any unsold portion. This is called an undivided liability.

by Ilda at Jul 04, 2025, 01:42 AM

Limited Time Offer

25%

Off

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

Contribute your Thoughts:

Submit Cancel

Jerry

2 months ago

Just to clarify, severally means each firm is responsible for its own share.

upvoted 0 times

...

Cyndy

2 months ago

Yeah, Western account is right. No doubt about it.

upvoted 0 times

...

Frank

2 months ago

It's definitely a Western account!

upvoted 0 times

...

Johnna

3 months ago

I thought it was an Eastern account, though?

upvoted 0 times

...

Micaela

3 months ago

Really? I’m surprised it’s not a best efforts offering.

upvoted 0 times

...

Dallas

3 months ago

Could it be an all or none offering? I’m confused about the differences between these terms.

upvoted 0 times

...

Merlyn

3 months ago

I practiced a question like this, and I feel like the answer is definitely not a best efforts offering.

upvoted 0 times

...

Maurine

4 months ago

I’m not too sure, but I remember something about Eastern accounts being more about joint liability.

upvoted 0 times

...

Kenneth

4 months ago

I think this might be a Western account since it’s the one where firms are liable severally.

upvoted 0 times

...

Maybelle

4 months ago

I'm pretty confident the answer is C, a best efforts offering, where the participating firms are liable severally but not jointly.

upvoted 0 times

...

Antione

4 months ago

Ah yes, I know this type of underwriting. It's called a "best efforts offering" if I'm not mistaken.

upvoted 0 times

...

Rasheeda

4 months ago

Okay, let me see... I remember learning about different types of securities underwriting, I just need to recall the specifics.

upvoted 0 times

...

Haydee

5 months ago

Hmm, I'm a bit unsure about this one. I'll need to think it through carefully.

upvoted 0 times

...

Ronny

5 months ago

This question seems straightforward, I think I know the answer but I'll double-check the details.

upvoted 0 times

...

Deane

7 months ago

A) a Western account? Isn't that where they, like, ride horses and lasso the securities or something? Just kidding, but this question is really making me yearn for a nice cold beverage.

upvoted 0 times

...

Tayna

7 months ago

Ha! This question is making my head spin. Maybe I should've paid more attention in my 'Securities Underwriting for Dummies' class. Oh well, I'll just guess and hope for the best.

upvoted 0 times

...

Lauran

7 months ago

This is a tricky one! I'm going to have to go with B) an Eastern account. Sounds more like the type of underwriting where the liability is shared, not individual.

upvoted 0 times

Leatha

5 months ago

No, I'm pretty sure it's D) an all or none offering.

upvoted 0 times

...

Dottie

5 months ago

I think it's actually C) a best efforts offering.

upvoted 0 times

...

Marti

7 months ago

Actually, Emilio, in an all or none offering, the underwriter is responsible for selling all the shares. So I still think it's C) a best efforts offering.

upvoted 0 times

...

Troy

7 months ago

Hmm, I'm not too sure about this one. But I'd go with D) an all or none offering. Isn't that when the underwriter has to sell all the securities or none at all?

upvoted 0 times

...