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Series 7 Exam Review Questions
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Series 7 exam review questions are 125 multiple-choice, application-based questions designed by FINRA to test your knowledge of securities products, client suitability, and regulatory rules. They cover topics like options, bonds, mutual funds, account management, and trading, with a heavy emphasis on client scenarios and suitability.  Key Topics and Question Areas Suitability and Recommendations (91 Questions): This is the largest section, focusing on recommending appropriate investments (stocks, bonds, options, muni bonds) based on a client's risk profile, financial objectives, and tax... Show more
Series 7 Exam Review Questions
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25 Questions

1. Which of the following funds changes its balance to hold more fixed-income securities and less equity securities as the years pass?
2. One of your clients wants to start adding some diversity to their portfolio by investing in mutual funds. Which of the following is the most important consideration when choosing a mutual fund?
3. All of the following can validate a mutilated certificate EXCEPT
4. As a client’s investment objectives change, a registered rep should keep track of those changes so that they can rebalance the client’s portfolio and make proper recommendations. Which of the following changes may affect a customer’s investment objectives?
Growing older
Getting divorced
Having triplets
Getting a higher paying job
5. What is the minimum maintenance for pattern day trading accounts?
6. A LML Oct 60 call is trading for 9 when LML is at $65. What is the time value of this option?
7. Donald Lister owns 2,500 shares of TP Corporation. Which of the following actions would dilute Donald’s equity?
Primary share offerings (registered)
A stock split
Payment of a stock offering
Secondary share offerings (registered)
8. Harley Securities sent Elaine a confirmation of her latest trade of Johnstone Corporation common stock. Which of the following items should be on the confirmation?
The trade date and the settlement date
Whether Harley acted as an agent or a principal
The name of the security and how many shares were traded
The amount of commission paid if Harley acted as an agent
9. Freddy Smith sends an email to his registered rep, Jake Penetta, complaining about the amount of commission he was charged on his last trade. According to FINRA rules, what should Jake Penetta do with the complaint?
10. Which of the following are money market securities?
11. George SimpleTrade is a registered representative who works for Vanderlay Securities. George has just learned of the death of one of his customers. Which of the following actions should George take regarding his deceased customer’s account?
Mark his customer’s account as deceased.
Cancel all open orders.
Wait for the proper legal papers.
12. Which of the following items can be found in the certificate of limited partnership?
The goals of the partnership and how long it’s expected to last
The authority of the general partner to charge a fee for making management decisions for the partnership
How the profits are to be distributed
The amount contributed by each partner, plus future expected investments
13. The indenture of a corporate bond includes all of the following EXCEPT
14. Which of the following is TRUE regarding standard equity options?
Each standard contract represents 1,000 shares of the underlying security
Each standard contract represents 100 shares of the underlying security
They are exercisable European style
They are exercisable American style
15. Regarding the taxation of dividends from corporate securities, which TWO of the following are TRUE?
Qualified dividends are taxed at the investor’s income tax rate.
Qualified dividends are taxed at a maximum rate of 20 percent.
Nonqualified dividends are taxed at the investor’s tax rate.
Nonqualified dividends are taxed at a maximum rate of 20 percent.
16. A principal is responsible for approving new accounts opened for
individuals
corporations
banks
trusts
17. The largest source of backing for a local GO bond is
18. ABC stock pays an annual dividend of $4, has an earnings per share of $8, and a market price of $40. What is ABC's PE ratio?
19. Julius Caesar is one of your clients. Julius is 55 years old, has a wife, two young adults going to college, and two children living at home. You have helped Julius determine his investment profile and how much risk he should be willing to take. However, Julius is hot on a particularly speculative security that doesn’t fit his investment profile. Julius calls you saying he wants to purchase $20,000 worth of this security. What should you do?
20. An investor who purchases a variable life insurance policy faces which of the following risks?
21. If the FDA increases pollution standards that are more costly for oil companies, investors who own shares of oil company stock would most likely see the value of their shares decline due to
22. These municipal notes provide interim financing for a municipality that’s waiting for a grant from the U.S. government.
23. Which of the following best describes the tax status of a limited partnership?
24. All the following activities are a registrar’s functions EXCEPT
25. All of the following are included on a confirmation for non-callable municipal bonds that were purchased on a yield basis EXCEPT

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