Series 7 Exam For Dummies

Series 7 Exam For Dummies

by Steven M. Rice

Paperback(4th Edition with Online Practice)

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Overview

Maximize your score on the Series 7 Exam

The Series 7 exam is a top-off exam taken with the Securities Industry Essentials exam to obtain General Securities Representative registration. This comprehensive guide is the critical reference you need to lead you through your preparation for the Series 7 exam. Packed with the latest information associated with this test, as well as proven test-taking strategies that are focused on maximizing your score, it covers everything you need to know to score your highest on this all-important exam.

The Series 7 exam is no joke — with 125 questions administered in three hours and 45 minutes, this test is certainly a challenge. But with the proper preparation you'll be able to enter the exam room with confidence.

  • Offers three full-length practice tests with answers and full explanations
  • Includes one-year access to six full-length tests online
  • Provides strategies and tips to hone the skills needed to ace the exam
  • Gives you confidence to start your career as a licensed broker

Series 7 Exam For Dummies, 4th Edition with Online Practice is a fundamental resource that guides you through your preparations for the Series 7 exam.

Product Details

ISBN-13: 9781119545040
Publisher: Wiley
Publication date: 03/26/2019
Series: For Dummies Series
Edition description: 4th Edition with Online Practice
Pages: 432
Sales rank: 174,713
Product dimensions: 8.50(w) x 10.70(h) x 0.90(d)

About the Author

Steven M. Rice earned an exceptionally high score on the Series 7 exam and soon began tutoring others in the broker dealership where he worked as a stockbroker. He developed and designed the online Empire Stockbroker Training Institute and has coauthored a complete library of securities training materials.

Table of Contents

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 2

Beyond the Book 2

Where to Go from Here 3

Part 1: Gearing Up For the Series 7 Exam 5

Chapter 1: So You Want to Sell Securities: Introducing the Series 7 Exam 7

What Is the Series 7 Exam, Anyway? 7

Profiling the Series 7 Exam-Taker 8

One’s Not Enough: Tackling the Series 63 or Series 66 8

Securing Sponsorship and Signing Up 9

Taking a Peek at the Tested Topics 12

Understanding the Exam Format and Other Exam Details 13

Chapter 2: Preparing for the Series 7 Exam 19

Courses and Training Materials: Determining the Best Way to Study 19

Managing Your Study Time Wisely 22

Exploring Study Strategies 26

Developing Solid Test-Taking Skills 26

Knowing When You’re Ready 30

Chapter 3: Examining and Mastering Question Types 31

Familiarizing Yourself with Question Formats 31

Shredding the Questions: Tips and Tricks 38

Chapter 4: Surviving Test Day 43

Composing Yourself the Day Before 43

Making the Most of the Morning 44

Arriving on the Scene 45

Taking the Exam 46

Getting the Results: Drum Roll Please 47

Part 2: Mastering Basic Security Investments 49

Chapter 5: Underwriting Securities 51

Bringing New Issues to the Market 51

Reviewing Exemptions 61

Chapter 6: Corporate Ownership: Equity Securities 65

Beginning with the Basics: Common Stock 65

Getting Preferential Treatment: Preferred Stock 71

Securities with a Twist 74

Chapter 7: Debt Securities: Corporate and U.S Government Loans 77

Tackling Bond Terms, Types, and Traits 77

Making Basic Bond Price and Yield Calculations 81

Determining the Best Investment: Comparing Bonds 86

Exploring U.S Government Securities 90

Playing It Safe: Short-Term Loans or Money Market Instruments 95

Chapter 8: Municipal Bonds: Local Government Securities 99

General Obligation Bonds: Backing Bonds with Taxes 99

Revenue Bonds: Raising Money for Utilities and Such 103

The Primary Market: Bringing New Municipal Bonds to Market 106

Examining Other Types of Municipal Bonds on the Test 109

Don’t Forget Municipal Notes! 112

Municipal Fund Securities 114

Understanding the Taxes on Municipal Bonds 116

Following Municipal Bond Rules 118

Gathering More Municipal Bond Info 122

Part 3: Delving Deeper Into Security Investments 125

Chapter 9: Borrowing Money and Securities: The Long and Short of Margin Accounts 127

Getting the Paperwork Out of the Way 128

Introducing Long and Short Margin Accounts 128

Playing by the Federal Reserve Board’s Rules 129

Opening a Margin Account: The Initial Requirements 130

Calculating Debit and Equity in Long Margin Accounts 132

Making Short Work of Calculations in Short Margin Accounts 133

Let the Good Times Roll: Handling Excess Equity 135

Looking at Limits When the Market Goes the Wrong Way 140

Chapter 10: Delivering Diversification with Packaged Securities 145

Diversifying through Management Investment Companies 145

Considering Other Investment Company Options 157

Reducing Real Estate Risk with REITs 158

Adding Annuities to a Portfolio 159

Exploring Variable Life and Variable Universal Life Insurance 163

Investment Company Rules 164

Chapter 11: Working with Direct Participation Programs 169

Searching for Identity: What DPPs Are (and Aren’t) 169

The DPP Characters: General and Limited Partners 170

Pushing through Partnership Paperwork 171

Types of DPP Offerings 173

Passive Income and Losses: Looking at Taxes on Partnerships 173

Evaluating Direct Participation Programs 173

Chapter 12: Options: The Right to Buy or Sell at a Fixed Price 179

Brushing Up on Option Basics 179

Incorporating Standard Option Math 184

Mastering Complex Option Calculations 192

Nonequity Options 207

Gaining Additional Option Info 209

Part 4: Taking Care of Your Customers and Playing By The Rules 217

Chapter 13: Doing a Little Market Research: Portfolio and Securities Analysis 219

Knowing Your Customer: Portfolio Analysis 219

Knowing Your Securities and Markets: Securities Analysis 225

Chapter 14: Going to Market: Orders and Trades 237

Shopping at Primary and Secondary Markets 237

Making the Trade 238

Understanding the Role of a Broker-Dealer 241

Receiving Orders from Customers 243

Designated Market Maker and the Super Display Book (SDBK) 248

Chapter 15: Making Sure the IRS Gets Its Share 253

Everything in Its Place: Checking Out Tax and Income Categories 253

Noting Taxes on Investments 254

Presenting Gift and Estate Tax Rules 262

Exploring Retirement Plans 264

Chapter 16: No Fooling Around: Rules and Regulations 271

The Market Watchdogs: Securities Regulatory Organizations 271

Following Protocol When Opening Accounts 273

Trading by the Book When the Account Is Open 284

Committing Other Important Rules to Memory 295

Part 5: A Couple Practice Exams 301

Chapter 17: Practice Exam 1 303

Chapter 18: Answers and Explanations to Practice Exam 1 323

Making the Grade 340

Answer Key for Practice Exam 1 341

Chapter 19: Practice Exam 2 343

Chapter 20: Answers and Explanations to Practice Exam 2 363

Knowing the Score 378

Answer Key for Practice Exam 2 379

Part 6: The Part of Tens 381

Chapter 21: Ten Series 7 Exam Traps to Avoid 383

Easing Up on the Studying 383

Assuming the Question’s Intent 384

Reading into the Question 384

Becoming Distracted When Others Finish 384

Not Dressing for Comfort 384

Forgetting to Breathe 385

Trying to Work Out Equations in Your Head Instead of Writing Them Down 385

Spending Too Much Time on One Question 385

Changing Your Answers for the Wrong Reasons 386

Calculating Your Final Score Prematurely 386

Chapter 22: Ten Ways to Start Your Career Off Right 387

Win at the Numbers Game 387

Be an Apprentice 388

Do Your Homework 388

Treat the Minnow like a Whale 388

Smile When You Dial 388

When a Security Falls, Don’t Be a Stranger 388

Put In the Hours 389

Broaden Your Horizons 389

Pay Yourself First 389

Set Some Goals: The Brass Ring 390

Appendix: Important Figures and Formulas 391

Index 393

Interviews

Cheat Sheet for Series 7 Exam For Dummies

From Series 7 Exam For Dummies, 2nd Edition by Steven M. Rice

Taking the Series 7 exam, whether for the first time or the fourteenth, is a huge challenge and requires many hours of preparation. Put your time to good use by taking a look at the following articles so you can be ready before the exam even begins and you can be successful once it's completed.


Establishing a Strong Study Routine for the Series 7 Exam

Passing the Series 7 exam is a rite of passage for stockbrokers. If you put the time and effort into studying for the exam, you'll be rewarded. If not, you'll have to take it over and over again until you pass. You have to use your time efficiently, and to accomplish this, you need to grab every spare moment and channel it into study time. Follow the tips listed here and you'll be well on your way to earning a passing grade.
• Get into a consistent study routine on a daily basis; never separate yourself from your textbooks for more than one day.
• Stay focused. If you get stuck on a multipart question, break down the question into segments; if you run into trouble with a math question, draw diagrams.
• Take short, ten-minute breaks throughout the day to give your brain a chance to process information.
• Reinforce your knowledge every day by reviewing old information while learning new material.
• Make yourself some flash cards to use as study aids.
• Record your notes onto a tape recorder and play them back at night while you're falling asleep.
• Take several practice exams before you tackle the real deal. You should consistently score 80 to 85 percent on the sample tests to ensure that you're ready.

Tackling Series 7 Exam Questions
To be successful on the Series 7 exam, you have to master the concepts that form the basis of the questions and, equally importantly, you need to develop your test-taking skills. Examining the different types of questions on the exam and how to answer them is a smart way to achieve your goal of passing the Series 7.
• Read the question carefully.
• Underline or highlight key words to avoid tricky detractors (except, unless, not).
• Identify the facts you need to answer the question and ignore the information you don't need.
• Use scrap paper to write down formulas and key points from the question, perform calculations, and draw diagrams.
• When you're unsure of the correct answer, eliminate as many wrong answers as possible.
• Work with the facts presented in the question and don't make the question more difficult than it is.
• If you don't know the answer, don't obsess. Take your best guess and mark it for review to return to later. As you go through the exam, another question may trigger your memory. If you still aren't sure of the answer when you return, remember these tips:
• Select a more precise answer more often than a less precise answer.
• Select a longer answer over a shorter answer.
• When answering multiple choice questions, if you see two opposing answer choices, one must be right.
• Cannot be determined is almost never the correct answer on the Series 7 exam.
• In complex (two-tiered) questions, an answer choice of none of the above is almost always wrong; you can usually eliminate it.
• Keep track of time.

Tackling Series 7 Exam Questions
To be successful on the Series 7 exam, you have to master the concepts that form the basis of the questions and, equally importantly, you need to develop your test-taking skills. Examining the different types of questions on the exam and how to answer them is a smart way to achieve your goal of passing the Series 7.
• Read the question carefully.
• Underline or highlight key words to avoid tricky detractors (except, unless, not).
• Identify the facts you need to answer the question and ignore the information you don't need.
• Use scrap paper to write down formulas and key points from the question, perform calculations, and draw diagrams.
• When you're unsure of the correct answer, eliminate as many wrong answers as possible.
• Work with the facts presented in the question and don't make the question more difficult than it is.
• If you don't know the answer, don't obsess. Take your best guess and mark it for review to return to later. As you go through the exam, another question may trigger your memory. If you still aren't sure of the answer when you return, remember these tips:
• Select a more precise answer more often than a less precise answer.
• Select a longer answer over a shorter answer.
• When answering multiple choice questions, if you see two opposing answer choices, one must be right.
• Cannot be determined is almost never the correct answer on the Series 7 exam.
• In complex (two-tiered) questions, an answer choice of none of the above is almost always wrong; you can usually eliminate it.
• Keep track of time.

What to Do the Day before You Take the Series 7 Exam
You've studied for the Series 7 exam, you know the content backward and forward. You are ready! So, don't let your nerves overtake you the day of the exam. Follow these steps to ready yourself for test-taking day and you'll be prepared to walk in and conquer the Series 7:
• Review your notes until noon.
• Get away from the books: Go out to dinner (skip the spicy foods and alcohol) or go to a movie — do whatever you want to rest your mind.

• Gather the items to bring with you to the exam site:
 * Your ID
 * Exam site directions
 * Layered clothing
 * Earplugs (if allowed)
 * A clock or watch
 * A snack/lunch
 * Your cellphone for emergencies (leave it in the car)
 * Study material and notes (leave them in the car)

• Set two alarm clocks. Leave enough time to get to the exam site an hour and a half early — one hour for more review and one half-hour for checking in.
• Get to bed early.

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Series 7 Exam for Dummies 3.8 out of 5 based on 0 ratings. 11 reviews.
Anonymous More than 1 year ago
AidanCollins More than 1 year ago
I've read a couple of different Series 7 books, and this one has information that does not help. The writing itself is not very good, but the actual content is lacking. You can do better than this one.
derbyboyjr More than 1 year ago
This is a great book, i have learned a lot from this book, i would buy it again.
Anonymous More than 1 year ago
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hanbanana More than 1 year ago
This is a great book to see if 1) You REALLY wanna do this , and 2) If you'll be any good at remembering the types of securities and practicing the calculations you'll need to make as a broker or advisor. The list of what you'll need to look up "on your own" at the end of the chapter is as long as the information we DO learn, so that's alittle confusing and frustrating. I wish it were written in the same style, but twice as thick, with all that stuff the author says "we'll NEED to know" INCLUDED!!
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Guest More than 1 year ago
The study strategies and practice exams are excellent. Great book!