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FINRA Series7 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions | 11% | - Regulatory requirements for transaction processing - Order types and execution procedures - Trade settlement and confirmation rules |
| Topic 2: Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records | 73% | - Recordkeeping and regulatory reporting - Equity securities - Margin accounts and taxation - Investment companies, ETFs, and variable annuities - Direct participation programs - Debt securities and government obligations - Options and derivative products - Municipal securities |
| Topic 3: Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives | 9% | - Suitability rules and regulatory compliance - Account types and documentation requirements - Financial profile, risk tolerance, and investment objectives |
| Topic 4: Seeks Business for the Broker-Dealer from Customers and Potential Customers | 7% | - Product-specific disclosures and regulatory requirements - Customer communication and solicitation rules - Standards for advertising and public communications |
FINRA General Securities Representative Examination (GS) Sample Questions:
1. Which of the information below does not appear in the official notice of sale?
A) the method and place of settlement
B) the amount of required good faith check
C) the names of underwriting syndicate members
D) the type of bond
2. A mutual fund characterized by a modest sales charge and an investment in a fixed portfolio of municipal
securities is a:
A) management company
B) face-amount certificate company
C) unit investment trust company
D) open-end or closed-end company
3. An investment company acting as a conduit in the distribution of net investment income, pursuant to IRS
rules, is called:
A) regulated
B) dual-purpose
C) diversified
D) balanced
4. In stabilizing a new issue, the manager may make a "syndicate penalty bid". This means that:
A) the manager will charge the syndicate the value of the shares
B) the underwriter will be penalized his profit on any securities repurchased from his clients
C) all stock purchased will be returned to the issuing corporation
D) any shares repurchased are added to the treasury stock of the issuing corporation
5. In a corporation's financial statements, earned surplus is also recognized as:
A) gross profit
B) net income
C) earnings retained after payment of dividends to shareholders
D) operating income after payment of interest expense
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: C | Question # 3 Answer: A | Question # 4 Answer: B | Question # 5 Answer: C |
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