What is the Series 7 exam?

Where the questions actually are

One function is 73% of the exam — roughly 91 of the 125 scored questions. The other three together account for the remaining 27% — about 34 questions between them.

That imbalance should drive your whole study plan. A candidate who splits their time evenly across four functions has spent three quarters of it on a quarter of the exam. If you are short on time, the honest advice is to go deep on recommendations, product knowledge and record-keeping, and to accept surface familiarity on the other three.

Inside the 73%: what you actually have to know

Most of that weight is product knowledge. These are the areas it spans, and each one carries its own calculations and tax treatment:

Equity

Common and preferred stock, rights and warrants, ADRs, and the tax treatment that comes with them — holding periods, wash sales, qualified versus non-qualified dividends, cost basis.

Packaged products

Investment companies, ETFs and UITs; open-end versus closed-end pricing; sales charges and breakpoints; variable annuity and variable life contracts; REITs and direct participation programs.

Options

Contract specifications, exercise and assignment, premium and intrinsic value, position limits, and the strategies built on them — covered calls, protective puts, spreads, straddles — plus break-even and profit-and-loss arithmetic.

Debt

Corporate bonds and their variants, structured products, yields from coupon through yield-to-worst, ratings, discounts and premiums, and convertibles.

Municipal securities

General obligation and revenue analysis, the many issue types, call features, refunding, accrued-interest and dollar-price calculation, and federal, state and AMT tax status.

Asset-backed and government

CMOs and CDOs, Treasuries including STRIPS and TIPS, and agency securities such as Ginnie Mae, Fannie Mae and Freddie Mac.

Alongside the products sit the things you do with them: analyzing a customer's profile, meeting the care obligations behind a recommendation, disclosing risks, costs and conflicts, and keeping the records that prove it. Those show up throughout rather than as a block of their own.

How the exam is delivered

You sit 130 questions in 3 hours 45 minutes, closed book. Only 125 of them count. The other 5 are pretest items FINRA is trialing for future exams — they are not marked as such and they are scattered through the paper, so there is no way to spot one and nothing to gain from trying. Treat every question as scored, because you cannot tell.

Every question has four answer choices. The pass mark is 72%, and it is a fixed standard rather than a curve — you are not competing against other candidates on the day.

Before you can take it

The Series 7 has the SIE as a corequisite and requires firm sponsorship — here's how sponsorship works. Wondering how tough it is? Read what to expect, or compare it with the Series 6 and SIE. If you are still deciding which license you need at all, the license chooser walks through it, and what the Series 7 costs covers the fee side.