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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Anglea

2 months ago

Option C is the way to go. Gotta love those 'may vary' disclosures - keeps the regulators happy and the investors on their toes!

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Chi

17 days ago

Absolutely, disclosing potential variations in yield is crucial for compliance.

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Shenika

1 months ago

Yeah, it's always better to be transparent with investors.

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Lisandra

1 months ago

I agree, option C is definitely the safest choice.

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Pete

2 months ago

Option B is too vague. I want the details, not just a 'prevailing discount rate' that could change at any moment.

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Odelia

4 days ago

User 4: I think the advertisement should disclose that the yield is an estimate.

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Miriam

4 days ago

User 3: Option C seems like the best choice.

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Rusty

14 days ago

User 2: Yeah, I want more details too.

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Giuseppe

24 days ago

User 1: I agree, option B is too vague.

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Barrett

25 days ago

Dacia: That makes sense, option C provides more information than option B.

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Rolf

30 days ago

User 3: Yeah, option C mentions that the yield is an estimate that may vary based on different factors.

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Dacia

2 months ago

User 2: I think option C is the best choice.

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Cyndy

2 months ago

User 1: I agree, option B is too vague.

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Chantay

2 months ago

Haha, Option A is wishful thinking. No way they're going to disclose the 'exact' yield - that's just asking for trouble!

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Mozell

2 months ago

I'm going with Option D. Why not just state the maximum yield and let investors decide for themselves?

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Stephanie

2 months ago

Option C seems like the most comprehensive and accurate disclosure. Investors need to know the yield is just an estimate that can fluctuate.

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Eric

1 months ago

User 2: Definitely, investors need to be aware that the yield can vary based on different factors.

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Deeanna

1 months ago

User 1: I agree, option C is the most transparent choice.

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Annelle

2 months ago

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

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Bethanie

3 months ago

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

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Rochell

3 months ago

I think the answer is C.

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