The Series 7 exam, administered by FINRA, is a comprehensive assessment designed to evaluate the knowledge and skills of individuals seeking to become entry-level stockbrokers [1]. The exam consists of 135 multiple-choice questions, with 10 of them being unscored experimental questions [1]. Candidates are given 3 hours and 45 minutes to complete the exam [1].
Key Facts
- Exam Format: The Series 7 exam consists of 135 multiple-choice questions, with 10 of them being unscored experimental questions. The exam has a time limit of 3 hours and 45 minutes.
- Content Areas: The exam covers a range of topics related to the securities industry. The questions are divided into four main content areas:
a. Seeks Business for the Broker-Dealer from Customers and Potential Customers: This section focuses on customer-facing sales activities and describing investment products and services to customers.
b. Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives: This section covers the rules and processes for opening customer accounts and obtaining customer profile information.
c. Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records: This is the largest section of the exam and covers providing customers with information about investment options, making suitable recommendations, and handling transactions.
d. Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions: This section focuses on the logistics of executing orders, obtaining quotes, and resolving discrepancies. - Question Types: The Series 7 exam primarily consists of multiple-choice questions. These questions may require candidates to analyze scenarios, apply regulations, and make suitable recommendations based on customer profiles.
Content Areas
The exam covers a wide range of topics related to the securities industry, organized into four main content areas [1]:
Seeks Business for the Broker-Dealer from Customers and Potential Customers
This section focuses on customer-facing sales activities, including describing investment products and services to customers with the intent of obtaining their business [1].
Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives
This section covers the rules and processes for opening customer accounts and obtaining customer profile information [1].
Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records
This is the largest section of the exam and covers providing customers with information about investment options, making suitable recommendations, and handling transactions [1].
Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions
This section focuses on the logistics of executing orders, obtaining quotes, and resolving discrepancies [1].
Question Types
The Series 7 exam primarily consists of multiple-choice questions [1]. These questions may require candidates to:
- Analyze scenarios
- Apply regulations
- Make suitable recommendations based on customer profiles
Sources
- Free Series 7 Exam (Practice Test) updated 2024
- Free Series 7 Practice Exam (2024) with explanations | Practice Questions for the Series 7 Exam | Achievable
- Free Series 7 Sample Exam Practice Questions
FAQs
What is the Series 7 exam?
The Series 7 exam is a licensing examination administered by the Financial Industry Regulatory Authority (FINRA) in the United States. It is designed to assess the competency of individuals who want to work as general securities representatives.
Who is required to take the Series 7 exam?
The Series 7 exam is typically required for individuals who wish to engage in the sale of securities products, such as stocks, bonds, mutual funds, and variable annuities, on behalf of a broker-dealer firm.
What topics are covered in the Series 7 exam?
The Series 7 exam covers a wide range of topics related to the securities industry, including equity securities, debt securities, options, investment companies, retirement plans, taxation, and regulations. It also tests candidates’ knowledge of sales practices, customer interactions, and ethical considerations.
How many questions are on the Series 7 exam?
The Series 7 exam consists of 125 multiple-choice questions. Candidates are given a total of 225 minutes (3 hours and 45 minutes) to complete the exam.
What is the passing score for the Series 7 exam?
To pass the Series 7 exam, candidates must achieve a score of 72% or higher. The score is based on the number of questions answered correctly.
Are there any prerequisites for taking the Series 7 exam?
Yes, there are prerequisites for taking the Series 7 exam. Candidates must be associated with a FINRA member firm, typically as an employee or sponsored by the firm. They must also pass the Securities Industry Essentials (SIE) exam, which is a prerequisite for several FINRA licensing exams.
How can I prepare for the Series 7 exam?
To prepare for the Series 7 exam, candidates typically study a comprehensive set of materials provided by reputable training providers. These materials cover the exam topics in detail and include practice questions and mock exams. Many candidates also find it helpful to attend live or online review courses.
What happens if I fail the Series 7 exam?
If a candidate fails the Series 7 exam, they have the opportunity to retake the exam after waiting for 30 calendar days. However, candidates are limited to three attempts within a 180-day period. If they fail to pass the exam after three attempts, they must wait an additional 180 days before they can retake it.