Series 7 Exam Question 407: Answer and Explanation

Question: 407

Which of the following is true about advertising for a municipal fund security?

I. It must be approved by a principal of the firm selling the securities.

II. It must not be fraudulent.

III. It must first be approved by the MSRB.

IV. It must be approved by the state administrator in each state in which the security is to be sold.

• A. I only
• B. I and II
• C. III and IV
• D. I, II, III, and IV

Correct Answer: B

Explanation:

B. Municipal fund securities include 529 college savings plans. All securities advertising must be approved by a principal of the firm and cannot be fraudulent (antifraud rules apply to everything). The MSRB and the states do not have to approve advertising.