Series 7 Exam For Dummies

Series 7 Exam For Dummies

by Steven M. Rice

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Product Details

ISBN-13: 9781118209868
Publisher: Wiley
Publication date: 05/08/2012
Series: For Dummies Series
Pages: 384
Product dimensions: 8.20(w) x 10.80(h) x 1.00(d)

About the Author

Steven M. Rice is a partner and instructor at the Empire Stockbroker Training Institute, one of the largest and most successful securities training schools in the country.

Table of Contents

Introduction 1

Part I: Gearing Up for the Series 7 Exam 5

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

Chapter 2: Preparing for the Series 7 Exam 17

Chapter 3: Examining and Mastering Question Types 29

Chapter 4: Surviving Test Day 41

Part II: Mastering Basic Security Investments 47

Chapter 5: Underwriting Securities 49

Chapter 6: Corporate Ownership: Equity Securities 61

Chapter 7: Debt Securities: Corporate and U.S. Government Loans 73

Chapter 8: Municipal Bonds:Local Government Securities 93

Part III: Delving Deeper: Security Investments with a Twist 109

Chapter 9: Borrowing Money and Securities: The Long and Short of Margin Accounts 111

Chapter 10: Delivering Diversification with Packaged Securities 127

Chapter 11: Working with Direct Participation Programs 141

Chapter 12: Options: The Right to Buy or Sell at a Fixed Price 151

Part IV: Playing Nicely: Serving Your Customers and Following the Rules 181

Chapter 13: Doing a Little Market Research: Portfolio and Securities Analysis 183

Chapter 14: Going to Market: Orders and Trades 199

Chapter 15: Making Sure the IRS Gets Its Share 213

Chapter 16: No Fooling Around: Rules and Regulations 225

Part V: Putting Your Knowledge to Good Use: A Practice Exam 247

Chapter 17: Bring It On: Practice Exam Part I 249

Chapter 18: Answers and Explanations to Practice Exam Part I 269

Chapter 19: Nothing but Net: Practice Exam Part II 287

Chapter 20: Answers and Explanations to Practice Exam Part II 309

Part VI: The Part of Tens 325

Chapter 21: Ten Series 7 Exam Traps to Avoid 327

Chapter 22: Ten Ways to Start Your Career Off Right 331

Appendix: Memorizing Important Figures and Formulas 335

Index 337

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!