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FINRA Series7 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives | 9% | - Account types and documentation requirements - Financial profile, risk tolerance, and investment objectives - Suitability rules and regulatory compliance |
| Topic 2: Seeks Business for the Broker-Dealer from Customers and Potential Customers | 7% | - Standards for advertising and public communications - Product-specific disclosures and regulatory requirements - Customer communication and solicitation rules |
| Topic 3: Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records | 73% | - Margin accounts and taxation - Recordkeeping and regulatory reporting - Equity securities - Options and derivative products - Investment companies, ETFs, and variable annuities - Debt securities and government obligations - Municipal securities - Direct participation programs |
| Topic 4: Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions | 11% | - Regulatory requirements for transaction processing - Trade settlement and confirmation rules - Order types and execution procedures |
FINRA General Securities Representative Examination (GS) Sample Questions:
1. When an index option is exercised, settlement is made by:
A) any of the above
B) cash
C) delivery of the underlying securities
D) delivery of a futures contract
2. Bubba buys a $4 convertible preferred with a $50 par value that is exchangeable for common stock at
4 7.50. If the preferred stock is trading at 52 and the common stock at 51, Bubba determines that the
preferred stock is:
A) overpriced and will quickly decline
B) underpriced and should rise quickly
C) selling at a 4% premium over conversion value
D) going to be called when the common stock price is $52
3. What is the loan value on a call option held in a customer's margin account?
A) the compliment of the FRB initial margin requirement for listed stocks
B) 0
C) 50%
D) 30%
4. Which of the following is not classified as a money market instrument?
A) commercial paper
B) banker's acceptances
C) treasury bills
D) American Depository Receipts
5. The Bubba Corporation has 900,000 of common outstanding and holds 100,000 shares as treasury stock.
At the end of the third quarter $450,000 is distributed as a dividend on the common. How much is the
dividend per share?
A) $0.50
B) $2.00
C) $0.45
D) $2.22
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: C |

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