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

4 months ago

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

upvoted 0 times

...

Lynsey

4 months ago

Large deductions can be a nice perk too.

upvoted 0 times

...

Gail

4 months ago

Wait, is there really no investment risk?

upvoted 0 times

...

Dalene

5 months ago

Definitely agree with that!

upvoted 0 times

...

Paulene

5 months ago

Capital appreciation is a big one!

upvoted 0 times

...

Fannie

5 months ago

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

upvoted 0 times

...

Micah

5 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

5 months ago

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

upvoted 0 times

...

Aretha

5 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

5 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

5 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

5 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

5 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

6 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

10 months 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

10 months 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

9 months ago

C) potential capital appreciation

upvoted 0 times

...

Keneth

9 months ago

A) deferred income

upvoted 0 times

...

Joaquin

9 months ago

B) large deductions

upvoted 0 times

...

Florinda

9 months ago

C) potential capital appreciation

upvoted 0 times

...

Stevie

10 months 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

9 months ago

C) potential capital appreciation

upvoted 0 times

...

Marleen

9 months ago

B) large deductions

upvoted 0 times

...

Mignon

9 months ago

A) deferred income

upvoted 0 times

...

Nieves

11 months 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

10 months ago

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

upvoted 0 times

...

Rozella

10 months ago

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

upvoted 0 times

...

Michael

10 months ago

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

upvoted 0 times

...

Queen

11 months 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