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FINRA Series7 Practice Q&A's

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FINRA Series7 Exam Syllabus Topics:

SectionObjectives
Job Functions Overview- Function 4: Processes Orders and Maintains Appropriate Records
  • 1. Weight: ~11% of exam content
    • 2. Maintains required documentation and recordkeeping standards
      • 3. Executes trades in accordance with customer instructions and regulations
        - Function 1: Seeks Business for the Broker-Dealer
        • 1. Opens accounts after obtaining and evaluating customer financial information
          • 2. Identifies investment opportunities and solicits new clients
            - Function 3: Provides Customers with Information About Investments and Makes Suitable Recommendations
            • 1. Recommends equities, debt instruments, mutual funds, ETFs, options, and variable products
              • 2. Weight: ~73% of exam content
                • 3. Explains characteristics, risks, and features of investment products
                  - Function 2: Opens Accounts After Obtaining and Evaluating Customers' Financial Profile
                  • 1. Determines investment objectives, risk tolerance, and financial situation
                    • 2. Ensures compliance with suitability and regulatory requirements

                      FINRA General Securities Representative Examination (GS) Sample Questions:

                      Question #1

                      To qualify as an intrastate offering under SEC Rule 147, which of the following is true of the issue?

                      • A. it must be approved by the SEC
                      • B. it cannot exceed $1,500,000 in value
                      • C. it must consist of common stock only
                      • D. it must be sold only to bona fide residents of one state
                      Reveal Solution  Discussion  0

                      Correct Answer: D  🗳️

                      Explanation: Only visible for Prep4King members. You can sign-up / login (it's free).

                      Question #2

                      Bubba decides to buy equity securities. Which of the following statements is always true about what
                      Bubba is buying?

                      • A. they are readily marketable
                      • B. they have a fixed rate of return
                      • C. they have a fixed maturity date
                      • D. they are not secured by collateral
                      Reveal Solution  Discussion  0

                      Correct Answer: D  🗳️

                      Explanation: Only visible for Prep4King members. You can sign-up / login (it's free).

                      Question #3

                      Bubba holds 200 shares of common stock in a utility company and receives rights to subscribe to an
                      additional 100 shares at $20. The utility company is raising $40 million of new capital. How many rights
                      does Bubba receive?

                      • A. 200
                      • B. 50
                      • C. 100
                      • D. 20
                      Reveal Solution  Discussion  0

                      Correct Answer: A  🗳️

                      Explanation: Only visible for Prep4King members. You can sign-up / login (it's free).

                      Question #4

                      When the Federal Reserve lowers reserve requirements, what is it attempting to do?

                      • A. counter inflation
                      • B. increase the rediscount rate
                      • C. raise interest rates
                      • D. ease credit
                      Reveal Solution  Discussion  0

                      Correct Answer: D  🗳️

                      Explanation: Only visible for Prep4King members. You can sign-up / login (it's free).

                      Question #5

                      Bubba buys "double-barreled" municipal bonds. What is the source of guaranteed repayment on these
                      bonds?

                      • A. all projects of the issuing municipality
                      • B. one specific municipal project plus the full financial strength of the issuer
                      • C. a specific municipal project plus a federal subsidy
                      • D. two specific municipal projects
                      Reveal Solution  Discussion  0

                      Correct Answer: B  🗳️

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