Finra Series-7 Exam - Topic 7 Question 101 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 101
Topic #: 7

[All Series-7 Questions]

What is the possible reward for investing in raw land?

Adeferred income

Blarge deductions

Cpotential capital appreciation

Dlack of investment risk

Show Suggested Answer

Suggested Answer: A

$200. Since XYZ is trading at 72, a November 65 call has an intrinsic value of $700. A sale at that value compared to the cost of $300 is a profit of $400. Subtract the loss of $200 on the expired put to obtain the profit of $200.

by Bambi at Sep 16, 2024, 05:36 AM

Limited Time Offer

25%

Off

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

Contribute your Thoughts:

Submit Cancel

Josphine

9 months ago

I thought raw land was just a gamble, not a sure thing!

upvoted 0 times

...

Lynsey

9 months ago

Large deductions can be a nice perk too.

upvoted 0 times

...

Gail

10 months ago

Wait, is there really no investment risk?

upvoted 0 times

...

Dalene

10 months ago

Definitely agree with that!

upvoted 0 times

...

Paulene

10 months ago

Capital appreciation is a big one!

upvoted 0 times

...

Fannie

10 months ago

Potential capital appreciation definitely sounds familiar; I think that's the main reason people invest in raw land!

upvoted 0 times

...

Micah

10 months ago

I feel like deferred income could be a possibility, but it doesn't sound right for raw land specifically.

upvoted 0 times

...

Sunny

11 months ago

I remember something about large deductions, but that seems more relevant to other types of investments.

upvoted 0 times

...

Aretha

11 months ago

I think the reward for investing in raw land might be related to capital appreciation, but I'm not entirely sure.

upvoted 0 times

...

Kris

11 months ago

I'm a little confused by this question. I know raw land can be a speculative investment, but I'm not sure if any of these answers fully capture the potential rewards. I may need to do some more research before answering.

upvoted 0 times

...

Mayra

11 months ago

I got this! The answer is definitely C - potential capital appreciation. Investing in raw land is all about betting on the land increasing in value over time as the area develops. Easy peasy.

upvoted 0 times

...

Denna

11 months ago

Hmm, I'm not sure about this one. I'll have to think it through carefully. Could it be A - deferred income? Or maybe B - large deductions? I'll have to review my notes on real estate investing.

upvoted 0 times

...

Jamal

11 months ago

I think the answer is C - potential capital appreciation. Investing in raw land can be a way to potentially profit from the land increasing in value over time.

upvoted 0 times

...

Robt

11 months ago

Ugh, this is a tricky one. I'm leaning towards C, but I'm not totally confident. I know raw land can be risky, so I don't think D - lack of investment risk is the right answer.

upvoted 0 times

...

Yvonne

1 year ago

Investing in raw land? Sounds like a great way to end up with a plot of dirt and a whole lot of headaches. Where do I sign up?!

upvoted 0 times

...

Alison

1 year ago

A) deferred income makes the most sense to me. You don't typically get an immediate return on raw land, but the long-term potential is there.

upvoted 0 times

Enola

1 year ago

C) potential capital appreciation

upvoted 0 times

...

Keneth

1 year ago

A) deferred income

upvoted 0 times

...

Joaquin

1 year ago

B) large deductions

upvoted 0 times

...

Florinda

1 year ago

C) potential capital appreciation

upvoted 0 times

...

Stevie

1 year ago

D) lack of investment risk? Haha, that's a good one! Investing in raw land is about as risky as it gets. That answer is a joke.

upvoted 0 times

Marti

1 year ago

C) potential capital appreciation

upvoted 0 times

...

Marleen

1 year ago

B) large deductions

upvoted 0 times

...

Mignon

1 year ago

A) deferred income

upvoted 0 times

...

Nieves

1 year ago

B) large deductions? Really? I'm not sure that's a valid reward for investing in raw land. Sounds like a stretch to me.

upvoted 0 times

Lenna

1 year ago

B) large deductions can actually be a valid reward, especially for tax purposes. It can help reduce taxable income.

upvoted 0 times

...

Rozella

1 year ago

C) potential capital appreciation is a common reward for investing in raw land. The value can increase significantly.

upvoted 0 times

...

Michael

1 year ago

A) deferred income sounds more appealing to me. It's a steady stream of money over time.

upvoted 0 times

...

Queen

1 year ago

C) potential capital appreciation seems like the most obvious answer here. Raw land can appreciate in value over time as the surrounding area develops.

upvoted 0 times