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FINRA Series7 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions11%- Order types and execution procedures
- Trade settlement and confirmation rules
- Regulatory requirements for transaction processing
Topic 2: Seeks Business for the Broker-Dealer from Customers and Potential Customers7%- Customer communication and solicitation rules
- Product-specific disclosures and regulatory requirements
- Standards for advertising and public communications
Topic 3: Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records73%- Margin accounts and taxation
- Debt securities and government obligations
- Direct participation programs
- Municipal securities
- Equity securities
- Recordkeeping and regulatory reporting
- Options and derivative products
- Investment companies, ETFs, and variable annuities
Topic 4: Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives9%- Suitability rules and regulatory compliance
- Financial profile, risk tolerance, and investment objectives
- Account types and documentation requirements

FINRA General Securities Representative Examination (GS) Sample Questions:

1. Bubba wishes to invest $50,000 in three mutual funds offered by different underwriters with growth as the
main objective. A recommendation to purchase only one such fund for $50,000 might be more suitable to
Bubba if:

A) a withdrawal plan would be easier to employ using a single fund
B) the income from one fund will be greater than the combined income in three
C) the purchase of one fund would probably be made at a break point allowing more dollars to be invested
in fund shares
D) the growth in one fund will be greater than the combined growth in three


2. Bubba buys an OTC stock from a firm that is a market-maker in the stock. What may be said about the
price he pays?

A) it includes a special fee
B) it includes a commission and a markup
C) it includes a markup
D) it does not include a markup


3. The term "secondary market" refers to:

A) trading in issues of low quality
B) issues that banks are not permitted to underwrite
C) trading in outstanding issues
D) private placements


4. Which of the following statements incorrectly describes US securities markets?

A) a money market comprised of short-term debt and equity issues
B) a municipal market comprised of tax-exempt issues of state and local governments
C) a capital market comprised of long-term debt and equity issues
D) a government and agency market comprised of both short-term and long-term debt issues


5. A provision under which an underwriter can cancel a proposed public offering due to some unforeseen
occurrence is known as a:

A) blue sky provision
B) market-out clause
C) fill or kill provision
D) contra-market clause


Solutions:

Question # 1
Answer: C
Question # 2
Answer: C
Question # 3
Answer: C
Question # 4
Answer: A
Question # 5
Answer: B

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