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Series 7 practice questions

The Series 7 qualifies a General Securities Representative to sell most kinds of securities. It is taken with the SIE and requires sponsorship by a FINRA member firm.

The Series 7 exam at a glance

Scored questions
125
Time
3 h 45 min
Passing score
72%
Fee
$395
Sponsorship
Requires sponsorship by a FINRA member firm
Prerequisites
Corequisite: the SIE exam
Format
The real exam also has a few unscored pretest questions.

Checked by ELLE in October 2026. Exams change, so always confirm on the official site before you book.

Try 5 free questions

1 A customer owns 100 shares of ABC bought at $40 and buys one ABC 40 put for $2. What is the customer’s maximum possible loss?

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Answer: B. The put lets the customer sell at $40, so the stock can’t lose value below the purchase price. The only loss is the $2 premium: $2 × 100 shares = $200.

2 Which account needs the customer’s written authorization before the representative can choose the securities and amounts to buy?

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Answer: C. A discretionary account lets the representative decide what and how much to trade. The customer must give written authorization (power of attorney) first, and a principal must approve the account.

3 Under Regulation T, what is the initial margin requirement when buying stock on margin?

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Answer: C. Regulation T currently requires the customer to deposit 50% of the purchase price. The rest can be borrowed from the broker-dealer.

4 What backs a municipal general obligation (GO) bond?

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Answer: B. GO bonds are backed by the issuer’s taxing power. Revenue bonds are paid from the income of a specific project, such as a toll road.

5 A municipal bond yields 4%. For an investor in the 32% federal tax bracket, what is the tax-equivalent yield?

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Answer: D. Tax-equivalent yield = municipal yield ÷ (1 − tax rate) = 4% ÷ 0.68 = about 5.88%. A taxable bond would need to pay that much to match.

Study tips for the Series 7

  • Spend most of your time on function 3, investment information and suitable recommendations: it is about three quarters of the exam.
  • Draw options strategies as simple profit-and-loss charts until the patterns feel familiar.
  • Learn margin formulas with worked examples, not by memory alone.
  • Review municipal bonds and suitability questions; they often decide a passing score.

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Practice questions written by ELLE for study only. ELLE is not affiliated with or endorsed by FINRA, NASAA, the SEC or CFP Board. CFP® and CERTIFIED FINANCIAL PLANNER® are certification marks owned by Certified Financial Planner Board of Standards, Inc.