Series 7 Test

The financial industry has suffered through a bumpy ride in the last decade. One thing that has not changed, however, is the lucrative nature of careers in the field. The sale of securities, which include financial instruments, such as currency, bonds, common stock, and derivatives, can lead to untold riches. There have been changes to the regulations facing the sale and purchase of securities. States require financial professionals to learn these rules and regulations, so they license brokers of securities. The General Securities Representative Examination, more commonly called the Series 7 exam, is a part of the licensing process for financial professionals who work with securities. It is given under the auspices of the United States SEC (Securities and Exchange Commission), the regulatory body in charge of securities trading. Candidates who pass the exam can go by the designation of General Securities Representative.

The exam itself is broken into two parts lasting three hours each. Each section has one hundred twenty-five multiple-choice questions for a total of two hundred fifty overall. The content of the test is designed to determine a candidate's knowledge of the day-to-day function of a representative. It focuses on aspects of customer service. It also tests the candidate's knowledge of the full range of securities products that he or she might sell, including REITs (Real Estate Investment Trusts), corporate bonds, derivatives, municipal bonds, and annuities.

In addition, the representative's responsibilities are tested, including his or her duty toward clients, the company, and to the government. Types of communication are covered from notifying clients to reporting to regulatory agencies. Broader economic topics are explored like the functioning of markets and the role of secondary markets. A large part of the test is answering questions about the rules and regulations that circumscribe the behavior of securities brokers and others in the investment banking sector. Potential test takers would be well advised to research and study the regulations before tackling the Series 7 exam.

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