| Introduction |
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1 | (4) |
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2 | (1) |
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3 | (2) |
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PART 1 GEARING UP FOR THE SERIES 7 EXAM |
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5 | (42) |
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Chapter 1 Introducing the Series 7 Exam |
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7 | (12) |
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What Is the Series 7 Exam, Anyway? |
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7 | (1) |
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Profiling the Series 7 Exam-Taker |
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8 | (1) |
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One's Not Enough: Tackling the Series 63 or Series 66 |
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8 | (1) |
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Series 63: Uniform Securities Agent State Law Exam |
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9 | (1) |
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Series 66: Uniform Combined State Law Exam |
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9 | (1) |
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Securing Sponsorship and Signing Up |
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9 | (1) |
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Filling out an application to enroll |
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9 | (1) |
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It's a date! Scheduling your exam |
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10 | (1) |
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Planning ahead for special accommodations |
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10 | (1) |
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Just in case: Cancelling as an option |
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11 | (1) |
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Taking a Peek at the Tested Topics |
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12 | (2) |
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Understanding the Exam Format and Other Exam Details |
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14 | (1) |
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14 | (1) |
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Ten additional trial questions |
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14 | (1) |
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The computerized format and features |
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14 | (1) |
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15 | (1) |
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Receiving and Evaluating Your Score |
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16 | (1) |
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16 | (1) |
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So you need a do-over: Retaking the exam |
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16 | (3) |
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Chapter 2 Preparing for the Series 7 Exam |
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19 | (12) |
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Courses and Training Materials: Determining the Best Way to Study |
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19 | (1) |
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Back to school: Attending a prep course |
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20 | (1) |
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Selecting prep material to study on your own |
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21 | (2) |
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Managing Your Study Time Wisely |
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23 | (1) |
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Blocking out some time to study |
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23 | (1) |
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It's a plan: Getting into a study routine |
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23 | (1) |
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Give it a rest: Taking short breaks |
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24 | (1) |
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Staying focused from day to day |
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25 | (1) |
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Devoting time to practice tests |
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25 | (1) |
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26 | (1) |
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26 | (1) |
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Exploring Study Strategies |
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26 | (1) |
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Developing Solid Test-Taking Skills |
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27 | (1) |
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Read the question carefully |
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27 | (1) |
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Look for phrases that lead to the topic tested |
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27 | (1) |
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27 | (1) |
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Don't obsess; mark for review |
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28 | (1) |
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28 | (1) |
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Master the process of elimination |
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29 | (1) |
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Maintain your concentration |
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29 | (1) |
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Think carefully before changing your answers |
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29 | (1) |
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Use the scrap paper wisely |
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29 | (1) |
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Knowing When You're Ready |
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30 | (1) |
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Chapter 3 Examining and Mastering Question Types |
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31 | (12) |
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Familiarizing Yourself with Question Formats |
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31 | (1) |
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Working with the straight shooters: The straightforward types |
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32 | (1) |
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Encountering quirky questions with qualifiers |
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33 | (1) |
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Roman hell: Complex multiple choice |
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34 | (2) |
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Looking at exhibits: Series 7 diagram questions |
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36 | (2) |
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Shredding the Questions: Tips and Tricks |
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38 | (1) |
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Focusing on key information |
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39 | (1) |
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Answer me this: Picking the correct answer |
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39 | (3) |
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Don't make the same mistake twice |
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42 | (1) |
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Chapter 4 Surviving Test Day |
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43 | (4) |
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Composing Yourself the Day Before |
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43 | (1) |
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Making the Most of the Morning |
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44 | (1) |
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44 | (1) |
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Taking advantage of one last chance to cram |
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45 | (1) |
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45 | (1) |
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45 | (1) |
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45 | (1) |
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Getting the Results: Drum Roll Please |
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46 | (1) |
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PART 2 MASTERING BASIC SECURITY INVESTMENTS |
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47 | (94) |
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Chapter 5 Underwriting Securities |
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49 | (18) |
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Bringing New Issues to the Market |
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49 | (1) |
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Starting out: What the issuer does |
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49 | (4) |
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Role call: Introducing the team players |
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53 | (1) |
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Agreement among underwriters |
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54 | (1) |
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55 | (1) |
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55 | (1) |
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Who gets what: Distributing the profits |
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55 | (1) |
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Agreeing to sell your share: Western versus Eastern accounts |
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56 | (1) |
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Getting the skinny on the issue and issuer: The prospectus |
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57 | (2) |
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59 | (1) |
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59 | (1) |
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60 | (2) |
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62 | (3) |
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65 | (2) |
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Chapter 6 Corporate Ownership: Equity Securities |
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67 | (16) |
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Beginning with the Basics: Common Stock |
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67 | (1) |
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Understanding a stockholder's voting rights |
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68 | (1) |
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Categorizing shares corporations can sell |
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69 | (1) |
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Considering the par value of common stock |
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70 | (1) |
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Sharing corporate profits through dividends |
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70 | (2) |
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72 | (1) |
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Getting Preferential Treatment: Preferred Stock |
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73 | (1) |
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Considering characteristics of preferred stock |
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73 | (1) |
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Getting familiar with types of preferred stock |
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74 | (2) |
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76 | (1) |
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Opening national borders: ADRs |
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76 | (1) |
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Rights: The right to buy new shares at a discount |
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77 | (1) |
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Warrants: The right to buy stock at a fixed price |
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78 | (1) |
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78 | (3) |
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81 | (2) |
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Chapter 7 Debt Securities: Corporate and U.S. Government Loans |
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83 | (26) |
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Tackling Bond Terms, Types, and Traits |
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83 | (1) |
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Remembering bond terminology |
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83 | (2) |
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Comparing secured and unsecured bonds |
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85 | (1) |
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86 | (1) |
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Making Basic Bond Price and Yield Calculations |
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87 | (1) |
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88 | (1) |
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Using seesaw calculations for price and yields |
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89 | (1) |
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Calculating accrued interest |
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90 | (2) |
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Determining the Best Investment: Comparing Bonds |
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92 | (1) |
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Considering bond credit ratings |
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92 | (1) |
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Contrasting callable and put bonds |
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93 | (1) |
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Popping the top on convertible bonds |
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94 | (2) |
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Exploring U.S. Government Securities |
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96 | (1) |
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Understanding the types and characteristics of U.S. government securities |
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97 | (1) |
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98 | (1) |
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In the tranches: Delving into packaged mortgages (CMOs) |
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99 | (2) |
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101 | (1) |
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Backed by debt: Collateralized debt obligations (CDOs) |
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102 | (1) |
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Playing It Safe: Short-Term Loans or Money Market Instruments |
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102 | (1) |
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103 | (1) |
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104 | (3) |
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107 | (2) |
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Chapter 8 Municipal Bonds: Local Government Securities |
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109 | (32) |
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General Obligation Bonds: Backing Bonds with Taxes |
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109 | (1) |
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General characteristics of GOs |
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110 | (1) |
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110 | (3) |
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Revenue Bonds: Raising Money for Utilities and Such |
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113 | (1) |
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General characteristics of revenue bonds |
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114 | (1) |
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114 | (2) |
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The Primary Market: Bringing New Municipal Bonds to Market |
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116 | (2) |
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118 | (1) |
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118 | (1) |
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Examining Other Types of Municipal Bonds on the Test |
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119 | (1) |
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Municipal bond diversity of maturities |
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120 | (1) |
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Specific types of municipal securities |
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121 | (1) |
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122 | (1) |
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Don't Forget Municipal Notes! |
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122 | (2) |
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Municipal Fund Securities |
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124 | (1) |
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124 | (1) |
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125 | (1) |
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Local government investment pools |
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125 | (1) |
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Municipal fund securities advertisements |
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125 | (1) |
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Understanding the Taxes on Municipal Bonds |
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126 | (1) |
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Comparing municipal and corporate bonds equally |
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126 | (1) |
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Scot-free! Taking a look at triple tax-free municipal bonds |
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127 | (1) |
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Pricing of municipal securities and other mathematical calculations |
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127 | (1) |
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Following Municipal Bond Rules |
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128 | (1) |
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129 | (1) |
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Advertising and record keeping |
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129 | (1) |
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129 | (1) |
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130 | (2) |
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Gathering More Municipal Bond Info |
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132 | (1) |
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The bond resolution (indenture) |
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132 | (1) |
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132 | (1) |
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133 | (1) |
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133 | (1) |
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134 | (1) |
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135 | (3) |
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138 | (3) |
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PART 3 DELVING DEEPER INTO SECURITY INVESTMENTS |
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141 | (112) |
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Chapter 9 Borrowing Money and Securities: The Long and Short of Margin Accounts |
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143 | (24) |
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Getting the Paperwork Out of the Way |
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144 | (1) |
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Introducing Long and Short Margin Accounts |
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144 | (1) |
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Playing by the Federal Reserve Board's Rules |
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145 | (1) |
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145 | (1) |
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146 | (1) |
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Opening a Margin Account: The Initial Requirements |
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146 | (1) |
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147 | (1) |
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148 | (1) |
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Calculating Debit and Equity in Long Margin Accounts |
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148 | (1) |
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148 | (1) |
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148 | (1) |
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149 | (1) |
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149 | (1) |
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Making Short Work of Calculations in Short Margin Accounts |
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150 | (1) |
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150 | (1) |
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150 | (1) |
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... Equals the credit balance |
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150 | (1) |
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Putting the equation together |
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151 | (1) |
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Let the Good Times Roll: Handling Excess Equity |
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152 | (1) |
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SMAs for long margin accounts |
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152 | (2) |
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154 | (1) |
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SMAs for short margin accounts |
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154 | (1) |
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Playing it SMA/RT: Using buying and shorting power for good |
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155 | (1) |
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Buying power for pattern day trading accounts |
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156 | (1) |
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Looking at Limits When the Market Goes the Wrong Way |
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156 | (1) |
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Checking out restricted accounts |
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156 | (2) |
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Keeping up with minimum maintenance |
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158 | (2) |
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160 | (3) |
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163 | (4) |
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Chapter 10 Delivering Diversification with Packaged Securities |
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167 | (26) |
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Diversifying through Management Investment Companies |
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168 | (1) |
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Comparing open- and closed-end funds |
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168 | (3) |
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Keeping your customer's investment objectives in mind |
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171 | (3) |
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Dealing with discounts and methods of investing |
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174 | (3) |
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Figuring the sales charge and public offering price of open-end funds |
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177 | (2) |
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Considering Other Investment Company Options |
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179 | (1) |
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Face-amount certificate companies |
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179 | (1) |
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Unit investment trusts (UITs) |
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179 | (1) |
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Exchange-Traded Funds (ETFs) |
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180 | (1) |
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Reducing Real Estate Risk with REITs |
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180 | (1) |
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Adding Annuities to a Portfolio |
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181 | (1) |
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Looking at fixed annuities |
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182 | (1) |
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Checking out variable annuities |
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182 | (1) |
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Putting money into (and receiving money from) annuities |
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183 | (2) |
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Exploring Variable Life and Variable Universal Life Insurance |
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185 | (1) |
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185 | (1) |
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185 | (1) |
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186 | (1) |
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186 | (1) |
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Investment company sales literature |
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186 | (1) |
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Advertisements by an investment company (section 10) |
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187 | (1) |
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Investment company rankings in retail communication |
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187 | (1) |
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188 | (1) |
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189 | (2) |
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191 | (2) |
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Chapter 11 Working with Direct Participation Programs |
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193 | (12) |
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Searching for Identity: What DPPs Are (and Aren't) |
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193 | (1) |
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The DPP Characters: General and Limited Partners |
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194 | (1) |
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Pushing through Partnership Paperwork |
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195 | (1) |
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195 | (1) |
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Certificate of limited partnership |
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195 | (1) |
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196 | (1) |
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197 | (1) |
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197 | (1) |
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197 | (1) |
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Passive Income and Losses: Looking at Taxes on Partnerships |
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197 | (1) |
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Evaluating Direct Participation Programs |
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198 | (1) |
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198 | (1) |
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Real-estate partnership info |
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198 | (2) |
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200 | (1) |
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200 | (2) |
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202 | (2) |
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204 | (1) |
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Chapter 12 Options: The Right to Buy or Sell at a Fixed Price |
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205 | (48) |
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Brushing Up on Option Basics |
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206 | (1) |
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206 | (1) |
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Looking at call options: The right to buy |
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207 | (1) |
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Checking out put options: The right to sell |
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207 | (1) |
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Getting your money back: Options in-, at-, or out-of-the-money |
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208 | (1) |
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Paying the premium: The cost of an option |
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209 | (2) |
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Incorporating Standard Option Math |
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211 | (1) |
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Buying or selling call options |
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211 | (3) |
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Buying or selling put options |
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214 | (2) |
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Trading options: Opening and closing transactions |
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216 | (2) |
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Mastering Complex Option Calculations |
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218 | (1) |
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Long straddles and combinations |
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218 | (2) |
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Short straddles and combinations |
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220 | (2) |
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Break-even points for straddles and combinations |
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222 | (1) |
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222 | (4) |
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Got it covered: Stock/option contracts |
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226 | (2) |
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Off the charts: Multiple option contracts |
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228 | (3) |
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Spending time on LEAPS: Long-term options |
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231 | (1) |
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Dividends and splits, more or less |
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231 | (2) |
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233 | (1) |
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233 | (1) |
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234 | (1) |
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235 | (1) |
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Gaining Additional Option Info |
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235 | (1) |
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235 | (1) |
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Getting the go-ahead: Registered options principal |
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235 | (1) |
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That's ODD: Options risk disclosure document |
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236 | (1) |
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Special statement for uncovered option writers |
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236 | (1) |
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OAA: Options account agreement |
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236 | (1) |
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Last trade, last exercise, and expiration of an option |
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237 | (1) |
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237 | (1) |
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238 | (1) |
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239 | (1) |
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Some additional option rules |
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240 | (2) |
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242 | (6) |
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248 | (5) |
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PART 4 TAKING CARE OF YOUR CUSTOMERS AND PLAYING BY THE RULES |
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253 | (102) |
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Chapter 13 Portfolio and Securities Analysis |
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255 | (22) |
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Knowing Your Customer: Portfolio Analysis |
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255 | (1) |
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256 | (1) |
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Factors that influence your customer's investment profile |
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257 | (1) |
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258 | (1) |
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259 | (1) |
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Capital Asset Pricing Model (CAPM) |
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259 | (1) |
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Strategizing with portfolio management policies |
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260 | (1) |
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Knowing Your Securities and Markets: Securities Analysis |
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261 | (1) |
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261 | (1) |
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Mitigating risk with diversification |
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262 | (1) |
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263 | (6) |
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269 | (2) |
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Showing the work: Research reports |
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271 | (1) |
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272 | (3) |
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275 | (2) |
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Chapter 14 Going to Market: Orders and Trades |
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277 | (20) |
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Shopping at Primary and Secondary Markets |
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277 | (1) |
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Buying new in the primary market |
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277 | (1) |
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Buying used in the secondary market |
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278 | (1) |
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278 | (1) |
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Auctioning securities at securities exchanges |
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278 | (1) |
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Negotiating trades over-the-counter |
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279 | (2) |
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Understanding the Role of a Broker-Dealer |
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281 | (1) |
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Firm versus subject quotes |
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282 | (1) |
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282 | (1) |
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Receiving Orders from Customers |
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283 | (1) |
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Recommending OTC equity securities |
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283 | (1) |
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Talking about order types |
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283 | (2) |
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Handling limit and stop orders |
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285 | (1) |
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Factoring in order features |
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286 | (2) |
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Designated Market Maker and the Super Display Book (SDBK) |
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288 | (2) |
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Adjusting orders for dividends and splits |
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290 | (1) |
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291 | (1) |
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Regulation NMS (National Market System) |
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292 | (1) |
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Trading halts: NYSE Rule 80B |
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292 | (1) |
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293 | (2) |
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295 | (2) |
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Chapter 15 Making Sure the IRS Gets Its Share |
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297 | (22) |
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Everything in Its Place: Checking Out Tax and Income Categories |
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297 | (1) |
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Touring the tax categories |
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298 | (1) |
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Looking at types of income |
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298 | (1) |
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Noting Taxes on Investments |
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298 | (1) |
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299 | (1) |
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299 | (1) |
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299 | (1) |
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At the sale: Capital gains and losses |
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300 | (4) |
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304 | (1) |
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Cost basis adjustments on bonds: Accretion and amortization |
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304 | (3) |
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Presenting Gift and Estate Tax Rules |
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307 | (1) |
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307 | (1) |
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308 | (1) |
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Exploring Retirement Plans |
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308 | (1) |
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308 | (1) |
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Employee Retirement Income Security Act (ERISA) |
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309 | (2) |
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311 | (1) |
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IRA types and contribution limits |
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311 | (2) |
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313 | (1) |
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Coverdell Education Savings Accounts |
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314 | (1) |
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314 | (3) |
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|
|
317 | (2) |
|
Chapter 16 No Fooling Around: Rules and Regulations |
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|
319 | (36) |
|
The Market Watchdogs: Securities Regulatory Organizations |
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|
319 | (1) |
|
The Securities and Exchange Commission |
|
|
319 | (1) |
|
Self-regulatory organizations |
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|
320 | (1) |
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Following Protocol When Opening Accounts |
|
|
321 | (1) |
|
Filing the facts on the new account form |
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|
321 | (2) |
|
Closing customer accounts |
|
|
323 | (1) |
|
Selecting the appropriate type of account |
|
|
323 | (2) |
|
Account registration types |
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325 | (4) |
|
Standards and required approvals of public communications |
|
|
329 | (1) |
|
Financial exploitation of specified adults |
|
|
330 | (1) |
|
|
|
331 | (1) |
|
|
|
331 | (1) |
|
Trading by the Book When the Account Is Open |
|
|
332 | (1) |
|
Filling out an order ticket |
|
|
332 | (2) |
|
Checking your calendar: Payment and settlement dates |
|
|
334 | (1) |
|
|
|
335 | (1) |
|
Meeting the requirements for good delivery |
|
|
336 | (3) |
|
Following up with account statements |
|
|
339 | (1) |
|
Keeping your dividend dates straight |
|
|
339 | (2) |
|
|
|
341 | (1) |
|
|
|
342 | (1) |
|
Committing Other Important Rules to Memory |
|
|
343 | (1) |
|
The Telephone Act of 1991 |
|
|
343 | (1) |
|
The 5 percent markup policy |
|
|
343 | (1) |
|
|
|
344 | (1) |
|
|
|
345 | (1) |
|
|
|
346 | (1) |
|
Negotiable instruments drawn from a customer's account |
|
|
347 | (1) |
|
Disclosure of control relationships |
|
|
347 | (1) |
|
|
|
347 | (1) |
|
|
|
347 | (1) |
|
Uniform Practice Code (UPC) |
|
|
348 | (1) |
|
|
|
348 | (1) |
|
|
|
348 | (5) |
|
|
|
353 | (2) |
|
PART 5 A COUPLE PRACTICE EXAMS |
|
|
355 | (80) |
|
Chapter 17 Practice Exam 1 |
|
|
357 | (20) |
|
Practice Exam 1 Answer Sheet |
|
|
359 | (18) |
|
Chapter 18 Answers and Explanations to Practice Exam 1 |
|
|
377 | (20) |
|
|
|
394 | (1) |
|
Answer Key for Practice Exam 1 |
|
|
395 | (2) |
|
Chapter 19 Practice Exam 2 |
|
|
397 | (20) |
|
Practice Exam Part 2 Answer Sheet |
|
|
399 | (18) |
|
Chapter 20 Answers and Explanations to Practice Exam 2 |
|
|
417 | (18) |
|
|
|
432 | (1) |
|
Answer Key for Practice Exam 2 |
|
|
433 | (2) |
|
|
|
435 | (10) |
|
Chapter 21 Ten Series 7 Exam Traps to Avoid |
|
|
437 | (4) |
|
Easing Up on the Studying |
|
|
437 | (1) |
|
Assuming the Question's Intent |
|
|
438 | (1) |
|
Reading into the Question |
|
|
438 | (1) |
|
Becoming Distracted When Others Finish |
|
|
438 | (1) |
|
|
|
438 | (1) |
|
|
|
439 | (1) |
|
Trying to Work Out Equations in Your Head Instead of Writing Them Down |
|
|
439 | (1) |
|
Spending Too Much Time on One Question |
|
|
439 | (1) |
|
Changing Your Answers for the Wrong Reasons |
|
|
440 | (1) |
|
Calculating Your Final Score Prematurely |
|
|
440 | (1) |
|
Chapter 22 Ten Ways to Start Your Career Off Right |
|
|
441 | (4) |
|
|
|
441 | (1) |
|
|
|
442 | (1) |
|
|
|
442 | (1) |
|
Treat the Minnow like a Whale |
|
|
442 | (1) |
|
|
|
442 | (1) |
|
When a Security Falls, Don't Be a Stranger |
|
|
442 | (1) |
|
|
|
443 | (1) |
|
|
|
443 | (1) |
|
|
|
443 | (1) |
|
Set Some Goals: The Brass Ring |
|
|
444 | (1) |
| Appendix: Important Figures and Formulas |
|
445 | (2) |
| Index |
|
447 | |
