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FINRA Series 7 Exam Outline 44 Questions with Verified Answers,100% CORRECT
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FINRA Series 7 Exam Outline 44 Questions with Verified Answers
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FINRA Series 7 Exam Outline 44 Questions with VerifiedAnswers
FINRA - CORRECT ANSWER Financial Industry Regulatory Authority
Purpose of FINRA Series 7 exam - CORRECT ANSWER "The Series 7 exam is
designed to assess the competency of entry-level General Securities
Representatives.
The Series 7 exam seeks to measure the degree to which each candidate
possesses the knowledge, skills and abilities needed to perform the critical
functions of a General Securities Registered Representative.
In order to obtain registration as a General Securities Representative, candidates
must pass both the Series 7 exam and a general knowledge co-requisite, the
Securities Industry Essentials (SIE) exam."
Length of Series 7 Exam - CORRECT ANSWER "The exam consists of 125 multiple-
choice items, and each item consists of four answer choices." There are an
additional 10 pre-test questions that are not scored. 3 hours and 45 minutes to
take exam
Types of questions for Series 7 Exam - CORRECT ANSWER "Function 1: (9 Q's)
Seeks Business for the Broker-Dealer from
Customers and Potential Customers
Function 2: (11 Q's) Opens Accounts After Obtaining and Evaluating Customers'
Financial Profile and Investment Objectives
Function 3: (91 Q's) Provides Customers with Information About Investments,
Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate
Records
Function 4: (14 Q's) Obtains and Verifies Customers' Purchase and Sales
Instructions and Agreements; Processes, Completes and Confirms Transactions"
,What is the meaning of Function 1: Seeks Business for the Broker-Dealer from
Customers and Potential Customers? - CORRECT ANSWER "Contacts current and
potential customers in person and by telephone, mail and electronic means;
develops promotional and advertising materials and seeks appropriate approvals
to distribute marketing materials"
"Describes investment products and services to current and potential customers
with the intent of soliciting business"
What is the knowledge of Function 1: Seeks Business for the Broker-Dealer from
Customers and Potential Customers? - CORRECT ANSWER "Standards and
required approvals of public communications
• Types of communications (e.g., retail, institutional, correspondence) • Seminars,
lectures and other group forum requirements
• Product specific advertisements and disclosures
° Investment company products and variable contracts
° Options-related communications; options disclosure document (ODD)
° Municipal securities
° Research reports (e.g., quiet periods, distribution, third-party research)
° Government securities, collateralized mortgage obligations (CMOs), certificates
of deposit (CDs)"
"• Process for bringing new issues to market (e.g., due diligence, registration
statement, preliminary prospectus, final prospectus, underwriting agreement,
selling group agreement, blue-sky laws and procedures)
• Regulatory requirements for initial public offerings (IPOs) (e.g., restrictions on
prospecting or soliciting, allowable communications with the public)
• Primary financing for municipal securities (e.g., competitive sale, negotiated
sale, private offering, advance refunding)
• Syndicate formation and operational procedures (e.g., purpose of syndicate bid,
roles and responsibilities of underwriters, selling group concession and
reallowance)
• Pricing practices and components of underwriters' spread and determination of
underwriters' compensation and selling practices
• Prospectus requirements (e.g., timeliness of information, preliminary
prospectus (red herring), final prospectus)
, • Information required in a registration statement and offering material on new
issue (e.g., in pre-filing period, in cooling-off period, in post-registration period)
• Official statements, preliminary official statements, notice of sale for municipal
securities
• Qualified institutional buyer (QIB) and accredited investor
• Qualification requirements for Regulation A offerings (e.g.,
1.1 As a FA, what knowledge should you have when contacting current and
potential customers, developing promotional and advertising materials and
seeking appropriate approvals to distribute marketing materials? - CORRECT
ANSWER "Standards and required approvals of public communications
• Types of communications (e.g., retail, institutional, correspondence)
• Seminars, lectures and other group forum requirements
• Product specific advertisements and disclosures
° Investment company products and variable contracts
° Options-related communications; options disclosure document (ODD)
° Municipal securities
° Research reports (e.g., quiet periods, distribution, third-party research)
° Government securities, collateralized mortgage obligations (CMOs), certificates
of deposit (CDs)"
1.2 As a FA, what knowledge should you have when describing investment
products and services to current and potential customers with the intent of
soliciting business? - CORRECT ANSWER "• Process for bringing new issues to
market (e.g., due diligence, registration statement, preliminary prospectus, final
prospectus, underwriting agreement, selling group agreement, blue-sky laws and
procedures)
• Regulatory requirements for initial public offerings (IPOs) (e.g., restrictions on
prospecting or soliciting, allowable communications with the public)
• Primary financing for municipal securities (e.g., competitive sale, negotiated
sale, private offering, advance refunding)
• Syndicate formation and operational procedures (e.g., purpose of syndicate bid,
roles and responsibilities of underwriters, selling group concession and
reallowance)
• Pricing practices and components of underwriters' spread and determination of
underwriters' compensation and selling practices
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