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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. 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
2. The Trade Reporting and Compliance Engine (TRACE) promotes better market transparency by allowing trade details to be released to the investing public that purchases
3. Hans Solo holds 10 XYX May 30 calls. XYX increases to $40, and he exercises the calls. Hans tells his registered rep to sell the stock immediately after purchase. If these trades are executed in a margin account, how much does Hans have to deposit?
4. An investor who purchases a variable life insurance policy faces which of the following risks?
5. Marcella is a customer who wants to invest in securities. Which of the following is most likely to provide Terri with the highest dividend rate?
6. Which of the following sequences reflects the priority of payments made when a limited partnership is liquidated?
Secured creditors
General creditors
Limited partners
General partners
7. Income derived from an investment in a real-estate limited partnership is termed
8. All of the following are types of blue-sky registration EXCEPT
9. Use the following exhibit to answer this question:
Balance Sheet of ABCD Corp.
Assets - Liabilities
Cash $300,000 - Accounts payable $300,000
Accounts receivable $1,500,000 - Taxes payable $250,000
Inventory $1,200,000 - Bonds maturing this year $800,000
Goodwill $2,000,000 - Bonds maturing in 5 years $2,000,000
Machinery $1,500,000 - Land $5,000,000
What is the net worth of ABCD Corporation?
10. If a customer, Jenny, gives limited power of attorney to her registered representative, which of the following is TRUE?
11. Which two of the following are true of Roth IRAs?
Contributions are made from after-tax dollars.
Contributions are made from pre-tax dollars.
Distributions are tax-free.
Distributions are taxed on the amount above the amount of the contribution.
12. 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
13. Prior to opening a day trading account for a customer, a member shall make a reasonable effort to determine certain information about the customer, including
14. Which of the following option positions provides an investor with potential premium income while limiting the maximum loss potential?
15. All the following information is required on a preliminary prospectus EXCEPT
16. 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.
17. Jimmy James wants to create a short combination using his existing option. If Jimmy is short 1 DEF Aug 60 call, which of the following option positions should Jimmy purchase or sell?
18. On a competitive bid for a new municipal underwriting, the difference between the syndicate bid and the reoffering price is the
19. A mutual fund has an NAV of $9.60 and a POP of $10. What is the sales charge of this fund?
20. All of the following are true regarding limited partners EXCEPT
21. Which of the following investments are suitable for a 21-year-old investor who has limited resources but would like to start investing on a regular basis?
Growth funds
Collateralized debt obligations (CDOs)
Call options
Hedge funds
22. Common stockholders in a corporation can do which of the following?
23. The largest source of backing for a local GO bond is
24. An investor purchases 1 LML Sep 30 call for a premium of 4. This option will expire
25. James Diamond is new to investing and wants to purchase a security that will provide him with current income with minimal risk. Which of the following are you LEAST likely to recommend?

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