2023 Edition

FINRA Series 7 Practice Test

Take this free FINRA Series 7 practice exam to  get an idea of what is on the exam to become a  financial investment representative.

The Series 7 exam (the General Securities Representative Qualification Examination (GS)) tests your competency as a general securities representative, including sales of corporate securities, municipal securities, investment company securities, variable annuities, direct participation programs, options and government securities. Topics tested include: Seeks Business for the Broker-Dealer from Customers and Potential Customers; Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives; Provides Customers with Information about Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records; Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions.

Candidates must pass the Securities Industry Essentials (SIE) exam and the Series 7 exam to obtain the General Securities Representative registration.

1. Which of the following is true regarding a Regulation D offering?
2. Maria is a new client. She is 81 years old, and her monthly living expenses are exceeding her social security income. She has only $8,000 in total assets. Her holdings consist of Class B Mutual Funds. Her dividends and capital gains received from the fund are being reinvested. Which of the following recommendations may be suitable and help Maria?
3. Two sisters are in your office to open a new non-qualified account together. They want to ensure that the assets pass to the other sister if one of them passes away. Which account type is appropriate for this situation?
4. A statutory prospectus is also known as a:
5. Your customer is 60 years old, and he opened his Roth IRA 9 years ago. He is liquidating his assets in his Roth IRA and sending the funds to his checking account. Which of the following is true regarding the tax implication of this action?
6. A company wishes to raise money from non-accredited investors, with the ultimate goal being an IPO. Which type of offering allows for this type of capital raise?
7. The date is June 23rd. ACME stock is trading at $50 per share. Your client Jon Ice thinks that ACME will move sideways for the next month or so, trading in a range between 47 and 53. Which strategy BEST fits Jon's market outlook?
8. Marcus is bullish on JKL stock. He is long one May 75 call for 7.50. What is his break even point on expiration day?
9. James owns XYZ 6 percent cumulative preferred stock ($100 Par Value). The first year, XYZ missed paying out $4 in dividends. In year two, XYZ missed paying out $5 in dividends. In year three, the company declared a common dividend. How much will James receive in dividend payments in year three?
10. CORP corporate bonds are currently quoted at 102.50. Josephine wants to buy 10 of these bonds. What is the price of each bond?
11. Which of the following calculates the CY (current yield) of a bond?
12. When analyzing the capital structure of a company, an analyst will most closely examine the:
13. MNO stock is trading at $31. A client wrote 29 MNO Corp $30 puts for $7.55 each. What is the client's maximum gain?
14. All of the following strategies entail theoretically unlimited risk EXCEPT:
15. A customer has an account with no activity or holdings; a zero balance account. How frequently must a statement be sent to this customer, at minimum?
16. ABC Corp. stock has a Beta of 1.27 and its Alpha is 0.29. It is also a component of the Russell 2000 Index. ABC is most likely a:
17. Revenue bonds are most likely to fund which of the following facilities?
18. Which of the following measurements describe a stock's volatility in comparison to the market as a whole?
19. An investor wants to buy ACME Corp. stock. The last time you checked, the stock was trading at $363.51. She wants to buy 100 shares of this stock, but only if the stock pulls back to $355.00. What type of order should she use?
20. All of the following are agency transactions EXCEPT: