Question #s7-prep3-s7-q-414Function 3Fundamental

Government Bonds

An investor purchases a Treasury bond quoted at 102-08. What dollar amount would the investor pay for $10,000 par value?

Correct Choice: C

Treasury securities are quoted in 32nds. 102-08 = 102 and 8/32 = 102.25% of par. For $10,000 par value: $10,000 x 1.0225 = $10,225.00. The investor pays a premium of $225 above par value.

Complete Analysis & Legal Rationale

Treasury securities are quoted in 32nds. 102-08 = 102 and 8/32 = 102.25% of par. For $10,000 par value: $10,000 x 1.0225 = $10,225.00. The investor pays a premium of $225 above par value.

Distractor Autopsy (Why Other Options Are Traps)

FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:

Choice AIncorrect

Concept Trap

Does not match the governing concept in the explanation.

Choice BIncorrect

Concept Trap

Does not match the governing concept in the explanation.

Choice CCorrect

None

Matches the verified teaching point in the explanation.

Choice DIncorrect

Concept Trap

Does not match the governing concept in the explanation.

Authorities & References:

Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.

Official SourceFINRA FINRA Series 7 Content Outline — General Securities Representative Examination (Series 7) Content Outline

Government Bonds

Complete Analysis & Legal Rationale

Distractor Autopsy (Why Other Options Are Traps)

Regulatory Authority & Citations: Primary Legal Sources

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