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FINRA Series7 Exam Syllabus Topics:

SectionObjectives
Job Functions Overview- Function 2: Opens Accounts After Obtaining and Evaluating Customers' Financial Profile
  • 1. Ensures compliance with suitability and regulatory requirements
    • 2. Determines investment objectives, risk tolerance, and financial situation
      - Function 1: Seeks Business for the Broker-Dealer
      • 1. Identifies investment opportunities and solicits new clients
        • 2. Opens accounts after obtaining and evaluating customer financial information
          - Function 4: Processes Orders and Maintains Appropriate Records
          • 1. Weight: ~11% of exam content
            • 2. Executes trades in accordance with customer instructions and regulations
              • 3. Maintains required documentation and recordkeeping standards
                - Function 3: Provides Customers with Information About Investments and Makes Suitable Recommendations
                • 1. Weight: ~73% of exam content
                  • 2. Explains characteristics, risks, and features of investment products
                    • 3. Recommends equities, debt instruments, mutual funds, ETFs, options, and variable products

                      FINRA General Securities Representative Examination (GS) Sample Questions:

                      1. Bubba buys one XYZ June 40 call for $1,000 and sells one XYZ March 40 call for $600. Subsequently, the
                      June call is closed for $1,200 and the March call for $900. What is Bubba's net result?

                      A) $100 loss
                      B) $100 profit
                      C) $200 profit
                      D) $200 loss


                      2. A financial institution requesting a quote on a block of 100 bonds from a dealer in government securities
                      receives a quote of 98.02 bid, 98.06 asked. What is the dollar amount the institution will receive if the
                      financial institution sells these bonds to the dealer?''

                      A) $98,062.50
                      B) $98,187.50
                      C) $98,750.00
                      D) $98,250.00


                      3. In comparing the premium cost of a LEAPS option with a premium of a traditional option on the same
                      security and same strike price, which of the following is generally true?

                      A) the premiums will be approximately the same
                      B) the premium for the traditional option will be higher than the LEAPS option premium
                      C) the LEAPS premium will be higher than the traditional option premium
                      D) LEAPS premiums do not consider time value


                      4. Which of the following holders of unregistered stock is precluded from selling shares under Rule 144?

                      A) an officer of the issuing corporation
                      B) a broker/dealer firm
                      C) a holder of more than 10% of the outstanding stock
                      D) an institutional investor


                      5. Under which of the following conditions may a registered representative of a firm that is an underwriter of
                      a new offering of common stock send to a client a copy of the firm's research report on that stock?

                      A) if it is accompanied by a red herring
                      B) if his firm is not the managing underwriter
                      C) if he has permission of his employer
                      D) under no circumstances


                      Solutions:

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

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