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Free Series 7: General Securities Representative Qualification Examination (GS) Exam Questions and Answers
Last updated: April 1, 2025
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512-Series 7: General Securities Representative Qualification Examination (GS)
#Question
A bond's credit rating is downgraded. What is the likely effect on its price?
A.
Price remains unchanged
B.
Becomes callable
C.
Price goes down
D.
Price goes up
Correct Answer:
C
A downgrade in credit rating typically signals increased risk of default, leading to a drop in bond prices.
#Question
If a company regularly pays dividends, what implication does this have for its financial health?
A.
The company is in a growth stage
B.
The company is struggling financially
C.
The company is financially stable
D.
The company is highly leveraged
Correct Answer:
C
Regular dividend payments suggest that the company has consistent cash flow and is financially sound.
#Question
An increase in government spending usually leads to what effect during an economic downturn?
A.
Greater unemployment
B.
Increased taxes
C.
Contraction in the economy
D.
Economic stimulus
Correct Answer:
D
Increased government spending can provide a stimulus, aiding recovery during economic downturns.
#Question
A firm is praised for its low-cost structure while maintaining quality. What competitive advantage is this likely exemplifying?
A.
Market dominance
B.
Cost leadership
C.
Brand equity
D.
Product differentiation
Correct Answer:
B
Cost leadership highlights a company's ability to maintain lower costs than its competitors while delivering value.
#Question
A high liquidity ratio indicates what about a company?
A.
Lower market risk
B.
Higher profitability
C.
High debt levels
D.
Ability to meet short-term obligations
Correct Answer:
D
A high liquidity ratio suggests that a company is well-positioned to meet its short-term financial obligations.
#Question
If a hacker compromises an investment's security, this illustrates what type of risk?
A.
Market risk
B.
Systematic risk
C.
Operational risk
D.
Interest rate risk
Correct Answer:
C
Operational risk involves risks stemming from internal processes or systems failures, including security breaches.
#Question
In a stock buyback, a company repurchases its own shares. What is one intended effect of this strategy?
A.
Increase in total shares
B.
Reduction in earnings per share
C.
Increase in market value per share
D.
Decrease in market cap
Correct Answer:
C
Stock buybacks reduce the number of available shares, potentially increasing the market value per share.
512-Series 7: General Securities Representative Qualification Examination (GS)
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