FINRA Series-7 - Series 7 General Securities Representative Qualification Examination (GS)

restricted stock acquired via open market purchase. The two-year holding period does not apply when the security is acquired in the open market. However, if the security is owned by a control person, the other provisions of Rule 144 do apply.

$3.75. Three-eighths of a $1,000 bond with a par price of 100.00 equals $3.75.

tombstone ad. Tombstone ads are used to announce new issues. They do not offer to buy or sell securities. They are informational only.

give Bubba its latest available statement. Bubba, like any customer, must be provided with the most recent available information.

interstate mail fraud in securities offerings. Blue Sky laws are state security laws and do not cover interstate regulations.

physically protects the fund’s assets. The custodian holds the assets of the fund. The transfer agent redeems and issues fund shares.

this statement constituted a form of fraud prohibited under the Securities Exchange Act of 1934. Such statements are fraudulent when rendered even if future events result in their accuracy.

money spread. Since the strike prices are different, but not the expiration date, this is a money spread (sometimes called a “price spread” or a “vertical spread”).

public utility companies. Interest rates most affect the companies with the greatest amount of debt. Public utility companies are highly leveraged. Hence, they most likely incur the largest effect of rising interest rates.