If you want to work at a well-paying job that deals with selling and/or trading securities here in the United States, then having an attractive resume is not enough. For you also have to pass a licensure examination called Series 7, or also known as GSRE (General Securities Representative Exam).
This test is composed of 260 questions and it covers all the necessary areas that a broker should know, from the procedural and theoretical concepts to the complex rules concerning risk and compliance. Passing this test is extremely crucial because it allows you to operate as a licensed securities broker and work at a FINRA member firm. And of course, failing this exam will be the easiest way to be fired without even starting.
But that’s not what you’re here for, because if you’re reading this article then you’re most likely looking for ways to increase your chance of passing Series 7.
So we invite you to read more as we will tackle the important questions to remember to increase your chance of passing the Series 7 exam in today’s post.
Remembering These Key Questions Will Help You Gain A Passing Mark
Without a doubt, studying may be your primary tool for passing the Series 7 exam. But getting an idea of the possible questions to be asked will definitely increase your chance of passing even better. Sure, the questions may change from time to time, but the principles they cover will always remain the same.
So here are some of the key questions you will surely see in different iterations, along with the right answers that you need to keep in mind:
- What is the difference between mutual funds and exchange-traded funds?
Answer: Mutual funds are usually bought and then sold one time per day, right after the closing of trading while exchange-traded funds or ETFs are the same with common stocks where the buying and selling can be made throughout the day.
- What’s the main purpose of warrants and when should they be issued?
Answer: Warrants enable investors to buy common stocks at specific prices and are supposedly issued with different security.
- What are the distinguishing features to know if you’re going to consider an investment that is OTCBB security quoted compare to considering exchange-listed stocks?
Answer: Business risk, liquidity risk, and the size of the company.
- What are the ID cards you can use for verifying a customer and which kinds of forms are generally considered suspicious?
Answers: The best ID that can verify a customer’s identity are his/her passport and driver’s license while the worst forms to consider are the birth certificate, passport, and driver’s license number without the actual IDs or documents.
- A client is interested in investing to the Section 529 plans for this son’s education as he thinks it is beneficial to his situation. So he begins saving money so he can avail of this plan immediately. And since you’re his registered rep, which of the following risk in Section 529 plan that your client needs to know first?
Answer: Limited liquidity and penalties for non-education usage of the plan.
You can visit this link if you’re looking for an in-depth video course about the Series 7 exam to further boost your chances of passing the licensure exam.