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Free FINRA Series-7 Practice Exam with Questions & Answers

Questions 1

Bubba purchases 100 shares of XYZ at 78 and, on the same day, writes 1 XYZ October 80 call for a premium of 4. If the option expires unexercised, what is Bubba’s profit on the 100 shares of stock?

Options:
A.

$200

B.

$400

C.

$600

D.

cannot be determined

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Questions 2

Bubba opens a margin account and sells short 100 shares of XYZ at $50. Assuming a Reg T requirement of 50%, what is the opening balance in Bubba’s account?

Options:
A.

$10,000

B.

$7,500

C.

$5,000

D.

$2,500

Questions 3

Securities may be sold under SEC rule 144 provided that the following conditions are met:

Options:
A.

the company files regular financial data with the SEC

B.

they are sold in agency transactions only

C.

they are sold in principal transactions only

D.

both A and B

Questions 4

An advertisement for a CMO security by a member of FINRA should disclose which of the following?

Options:
A.

the exact yield investor will earn

B.

the yield based upon the prevailing discount rate

C.

that the stated yield is an estimate that may vary passed upon prepayments and market factors

D.

that the yield may be greater than the stated percentage but never less

Questions 5

Which of the following must be true in order for an offering to qualify as an intrastate offering under Rule 147?

Options:
A.

80% of the proceeds of the offering must be used in that state

B.

80% of the corporation’s assets must be located in that state

C.

80% of the corporation’s revenue must be earned in that state

D.

all of the above are required

Questions 6

A basis point is:

Options:
A.

0.10%

B.

0.01%

C.

1.00%

D.

0.001%

Questions 7

Bubba maintains an individual cash account as well as a joint account with his wife, Bubbette. While Bubba is out of town on a fishing trip, Bubbette calls the brokerage firm with an order to buy 100 shares of Great Company, Inc., at the market value for Bubba individual account. It is a stock Bubba has previously informed the brokerage he wanted to buy at the “right price”.

What does the brokerage do?

Options:
A.

refuse to accept the order unless Bubba has provided a signed trading authorization in favor of Bubbette

B.

execute the order as requested

C.

enter the order only after receipt of written instructions to do so from Bubba

D.

buy the stock in the joint account and, after verification from Bubba, journal the security to his individual account

Questions 8

If federal excise taxes were increased by the government, what would the typical investor do about his securities portfolio?

Options:
A.

sell treasuries and invest in municipal bonds

B.

sell corporate bonds and invest in treasuries

C.

sell municipal bonds and invest in high quality growth stocks

D.

take no action as a result of the tax increase

Questions 9

The net investment income of an open-end investment company represents:

Options:
A.

net income from dividends and interest paid on securities in the fund’s portfolio

B.

net gains on sales of portfolio securities

C.

dividends, interest, and net gains on sales of securities

D.

net profits from the investment company operation

Questions 10

Which of the following items is not deducted to determine a corporation’s net income?

Options:
A.

taxes

B.

dividends

C.

interest

D.

all of the above

Exam Code: Series-7
Certification Provider: FINRA
Exam Name: Series 7 General Securities Representative Qualification Examination (GS)
Last Update: Jul 9, 2025
Questions: 400

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