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Joint Tenants with Right of Survivorship (JTWROS) passes assets directly to surviving owners. Tenants in common (A) require probate. Individual (C) accounts also go through probate. UGMA (D) accounts transfer to the minor at majority, not survivorship.

Non-traded REITs are illiquid, high-fee products with long holding periods. Money markets, ETFs, and Treasuries provide high liquidity. Series 7 candidates must evaluate liquidity risk and suitability carefully.

A margin account requires a credit agreement, which explains borrowing terms, interest charges, and collateral. Partnerships (B) and corporations (D) need additional documents for authorization, but the credit agreement is mandatory for margin. Trust indentures (C) apply to bond issues, not accounts. Series 7 candidates must recall margin disclosures, Reg T rules (50% initial margin), and FINRA minimum equity requirements.

Municipal bond interest is exempt from federal income tax and may also be exempt from state/local taxes if purchased in-state. For high-bracket investors, this results in a higher after-tax yield compared to taxable instruments, even if nominal rates are lower. Corporate bonds (A) are fully taxable. Treasuries (B) are federally taxable, though exempt from state/local. Preferred stock (D) pays taxable dividends. Series 7 candidates must calculate taxable-equivalent yield: municipal yield ÷ (1 – tax rate). Suitability also considers credit risk, call risk, interest rate sensitivity, and liquidity. Munis are especially suitable for wealthy investors seeking tax-free income.

Municipal bonds pay interest exempt from federal income tax and, if purchased in-state, may also be exempt from state and local taxes. For high-income investors, municipals are particularly attractive, as their after-tax yield can exceed that of taxable securities even if the stated coupon is lower. Corporate bonds (A) and Treasuries (B) are fully taxable at federal level, with Treasuries exempt from state/local tax but not federal. Growth stocks (D) offer potential appreciation but no reliable income and dividends are taxable. Series 7 candidates must evaluate suitability considering tax status, yield equivalence formulas (taxable equivalent yield = muni yield ÷ [1 – tax rate]), and risk factors (credit, interest rate, call risk). Municipal suitability is a common test focus.