About the Author
Series 7 Securities Licensing Review Series 7 Securities Licensing Review Introduction
So you want to be a stockbroker? With all the volatility and unpredictability of the stock market, many individuals want to be part of this fast-paced, cutting-edge environment. The road to becoming a stockbroker is a challenging one, but for the right individual, it can also be a rewarding highway to success.What Is This Book About?
Welcome to the Series 7 Securities Licensing Review Exam Cram! The sole aim of this book is to provide you with a review of Series 7 information that will help you learn, drill, and review for the Series 7 exam.Who Is This Book for?
This book is for anyone studying for the Series 7 exam who is ready to test his or her knowledge before taking the real exam. If you have been preparing but you want to test yourself before taking the exam, this book is for you! Maybe you have taken other practice exams, reviewed other material, or unsuccessfully taken the real exam, and you want to try more review questions before taking the exam again: then this book is for you, too!What Will You Find in This Book?
The Series 7 Securities Licensing Review Exam Cram utilizes a variety of special elements to help you best understand the material being tested. Each chapter follows a regular structure, with graphical cues about important or useful material. The special elements you will find within the book are described as follows:
- Opening hotlistsEach chapter begins with lists of the terms you need to understand and the concepts you need to know for the exam.
- Topical coverageAfter the opening hotlists, each chapter covers the topics related to the exam.
- AlertsWe highlight throughout the material items most likely to appear on the exam by using a special Exam Alert that looks like this:
Caution - Exam Alerts are intended to help you score better on the exam, which they do by providing you with "insider information" for the particular question type/section that is being discussed where the Exam Alert appears.
Even if material isn't flagged as an Exam Alert, all the content is this book is associated in some way with test-related material. What appears in the chapter content is considered critical material.
- NotesSome content opens another inquiry which is not specifically exam-related but good background. A Note looks like this:
- SidebarA sidebar is useful information that is not tested but provides background for important information. A sidebar looks like this:
- Exam Prep QuestionsYou are going to get a lot of practice questions in this book, both in the form of sample quizzes and full-length practice exams. Practice questions are not only listed, but detailed answer explanations are also provided.
- Need to Know More?At the end of the book is a section titled "Need to Know More?" This section provides useful resources to help you if you need additional information on exam topics.
- Practice ExamThe Practice Exam is intended to test your comprehension of the material in this book. The sample questions are similar in format and degree of difficulty as the questions you will find on the real exam. However, because the questions on the real exam are highly confidential, expect that the real exam will be new to you.
- Answer KeyThis provides all the answers to the questions in the Practice Exam. There is a quick check key plus more in-depth explanations of the answers, explaining incorrect answers that you might find confusing.
- GlossaryThis is an extensive list of important terms used in this book.
- Cram SheetThis appears as a tear-out card inside the front cover of this book. It is a valuable tool that represents a collection of the most difficult- to-remember facts, terms, and concepts we think you should memorize before taking the test.
- CD-ROMThe CD contains additional questions so you can practice taking sample exams. Again, these questions are merely similar to those you will find on the real exam and are not to be thought of as "real" questions.
Note - Notes will give you supplementary information on a topic at hand, and in some cases point you to other information resources.
Sidebars - Sidebars are designed to give you more extensive supplementary information that is not necessarily specific to exam objectives but is background you may find useful.
Because this book is a paper practice product, you might want to complete the Practice Exam on a separate sheet of paper so that you can reuse the questions over and over without seeing the answers. Also, as a general rule of thumb, you should make sure you score in the 80% to 90% range in all topics before attempting the real exam. The higher the percentages you score on review question products, the better your chances for passing the real exam. Of course, we can't guarantee a passing score on the real exam, but we can offer you plenty of opportunities to practice and assess your knowledge level before entering the real exam.The Road to Becoming a Stockbroker
To become a registered representative, the qualified applicant is required to meet some demanding requirements:
- The applicant must be a minimum of 18 years old or, at some of the larger firms, a minimum of 21 years old.
- The applicant is required to possess a clean personal record, with no criminal convictions in the past.
- The applicant is required to be employed by a broker/dealer before she can actually apply to become a registered representative. The broker/dealer can be either a NYSE member firm or an NASD member firm.
- The applicant is not required to have a college degree, but many larger firms do not hire an individual without a degree.
- After employed by a broker/dealer, the applicant has a 30-day waiting period before he can apply to become licensed.
- The applicant must complete a NASD form called the U-4 application for General Securities Registration and submit the completed form to the Central Registration Depository (CRD) for investigation.
- The applicant must receive a CRD approval for her application to be qualified to sit for the Series 7 qualifying examination. Applicants with any previous criminal convictions are denied approval from the CRD. Additionally, any applicant who has previously been barred from the securities industry for past violations is also denied approval.
As the applicant prepares for the exam, the registration or compliance personnel of the firm open a "window" for the applicant to schedule her exam with a certified testing site. This window typically lasts 90 days because the applicant must sit for the examination within that time frame.
The Series 7 is a 250 multiple-choice question examination that the applicant must pass with a minimum attained grade of 70%. The applicant must answer a minimum of 175 questions correctly to attain the 70% passing grade. Then the successful applicant is licensed by the NASD to buy and sell securities. Most firms have a probationary period for new brokers.
After successfully passing the Series 7 examination, all candidates must also pass the Series 63Uniform State Law Examination to buy and sell securities for their clients. An individual can fail the Series 7 exam and still sit for the Series 63 exam.
If an applicant fails the examination, he must wait another 30 days before he can schedule another testing date. Any applicant who has failed the Series 7 Exam three times is required to wait six months before he can refile his application to take the exam.
Many new stockbrokers are required by their firms to "build a book" of new clients. This building includes cold calling qualified leads. As the new stockbroker builds her business and a list of clients, she can expect to earn a "draw" from her employer over a period of time. This draw is considered a salary until the new stockbroker can sufficiently sustain herself from the commission business she generates.
In this age of Internet trading, it is becoming more difficult for stockbrokers to earn commission income from clients. The most successful stockbrokers must be more than just an order taker for their clients. They must know their customers and their investment profiles to make a living in this business. The better versed a broker is in the markets and products that are available to investors, the more successful he will become.Need Further Study?
Are you having a hard time correctly answering these questions? If so, you probably need further review. Consult the sister product to this book, Series 7 Securities Licensing Review Questions Exam Cram (Que Publishing, 0-7897-3286-6) for further review.
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