The Series 7 study plan: weighted like the exam
Six weeks, four FINRA functions and three full-length checkpoints. Nearly three quarters of the exam is Function 3, so that is where most of the plan goes.
Where the points are
FINRA weights the Series 7 by job function. One function carries 91 of the 125 scored questions.
The six-week plan
About two hours a day. Take a full-length practice exam at each checkpoint and review every option explanation, not only your wrong answers.
- W1
Diagnostic, F1 and F2
Take a diagnostic exam cold. Then communications under Rule 2210, seminars and telemarketing rules, account types and registrations, customer identification, margin and options account documents and approvals.
- W2
Equities and debt
Common and preferred stock, rights and warrants, ADRs, then bond features, pricing and yields, Treasuries, agencies, corporate bonds, accrued interest and the yield relationships the exam loves.
- W3
Municipals and packaged products
GO versus revenue bonds, official statements and MSRB rules, tax-equivalent yield, then mutual funds, sales charges and breakpoints, ETFs, UITs, variable annuities, REITs and DPPs. Checkpoint 1 at the end of the week.
- W4
Options and margin
Calls and puts, breakevens, maximum gain and loss, spreads, straddles, covered and protective positions, then Reg T, minimum equity, maintenance and SMA. Do calculation drills every day.
- W5
Recommendations and F4
Reg BI and Form CRS, customer profiles, retirement accounts, taxation, economics and analysis. Then F4: order types, quotes, T+1 settlement and confirmations. Checkpoint 2 at the end of the week.
- W6
Full-length practice and review
Two or three unseen timed exams. Rework every calculation you missed and reread the rules behind every wrong option. Checkpoint 3: book when you are at 80% or higher.
5 free Series 7 practice questions
From all four functions, taken from the course. Click an option; every option is explained.
Under FINRA Rule 2210, a firm must generally have a qualified registered principal approve which of the following before its first use?
- A reply to one customer is correspondence and is not subject to principal pre-approval.
- Correct. A retail communication generally needs principal approval before it is used.
- An email to three retail clients is correspondence, which is reviewed under supervisory procedures rather than pre-approved.
- A piece distributed only to institutional investors is an institutional communication, which does not require pre-approval.
A new margin customer buys 400 shares at $45 per share. What is the required deposit?
- $18,000 is the full purchase price, which a margin customer does not need to pay.
- $4,500 is 25% of the purchase, the maintenance percentage, not the initial requirement.
- $2,000 is the minimum equity; the Reg T amount is higher here and governs.
- Correct. 50% of $18,000 is $9,000, above the $2,000 minimum.
A customer buys a municipal bond at a premium in the secondary market and holds it until it matures at par. For tax purposes, the customer has:
- The premium is amortized, not deducted as a loss at maturity.
- Amortized muni premium reduces basis and tax-exempt income; it is not deductible.
- Correct. Amortization brings basis down to par, so redemption at par produces no gain or loss.
- The customer received par, less than the purchase price, so no gain is possible.
The yield spread between high-yield corporate bonds and Treasury securities narrows significantly. This most likely indicates that:
- Correct. Smaller spreads signal confidence and willingness to take credit risk.
- A narrowing spread is not a direct result of a discount rate change.
- Rising defaults would widen spreads.
- A flight to quality widens spreads.
A customer's immediate-or-cancel order to buy 5,000 shares at $18 is entered, and 2,000 shares are available at $18. What happens?
- That outcome describes a fill-or-kill order. IOC permits a partial fill.
- Correct. IOC accepts partial execution. The available 2,000 shares are purchased at once and the unfilled 3,000 shares are canceled.
- IOC does not leave a residual open order. Anything not filled immediately is canceled.
- Waiting for the full size describes an all-or-none order, not IOC.
Three checkpoints, four full-length exams
500 original Series 7 questions weighted to the FINRA outline, with the math worked out under every calculation.
FAQ
How many hours should I study for the Series 7?
Many candidates plan for roughly 80 to 100 hours, often over six to eight weeks. If you passed the SIE recently, some of the product basics will already be familiar.
Should I take the SIE before the Series 7?
You can take the SIE first, and many people do. It is a corequisite, so you need to pass both to be registered as a General Securities Representative.
What score should I get on practice exams before the real one?
The pass mark is 72. Aim for 80% or higher on full-length, timed practice exams you have not seen before, so a hard exam form still leaves you margin.
What happens if I fail the Series 7?
Under FINRA rules you must wait 30 days before retaking after a first or second failure, and 180 days after three or more failures in a row.
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