Finra Exam Series-7 Topic 4 Question 109 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 109
Topic #: 4

[All Series-7 Questions]

An excerpt from a recent tombstone ad reveals bonds offered publicly at 101.

Why were they priced at a premium?

Ato enable investors to establish a tax loss when the bonds are redeemed at maturity

Bto reflect prevailing credit ratings and market conditions for the issuer

Cto provide the issuer with a larger deduction from pre-tax earnings for higher than usual interest payments

Dto comply with SEC rules mandating such pricing for debt issues maturing in the year 2000 and thereafter

Show Suggested Answer

Suggested Answer: C

premium. That's the term for the option cost.

by Deonna at Mar 22, 2025, 03:18 AM

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3 days ago

I think the bonds were priced at a premium to reflect prevailing credit ratings and market conditions for the issuer.

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