FINRA Broker Exams and Series 7 Career with Sponsorship

American Investment Training has provided the following list of our more frequently asked questions. If you are new to the business, please review these questions and answers to see if your question is addressed. Help is offered for Series 7 Sponsorship questions or firms who will sponsor you for your exam.

AIT is the provider of the courses, we are not a brokerage firm.

Series 7 Sponsorship and Broker Opportunities

A brokerage firm will sponsor a person to take a licensing exam such as the Series 6 or 7. Sponsorship is normally done when a person is hired and compiles a certain number of days and in-house training. There are brokerage firms who will sponsor people as independents or partners, but they will not do that for just anyone. You need to be able to offer them something. Be a professional with clients or a plan for success with their firm.

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Course Questions

Q: What is the Series 7 exam?

A: The Series 7 exam is a 6 hour, 250 question exam that if passed, registers you as a Registered Representative with FINRA.

Q: How often is the Series 7 exam given? and the other FINRA - NASAA - NFA exams?

A: All exams are given daily (Except Sundays and holidays) at Prometric Learning Centers. There are hundreds of testing centers, with locations in every state. You can view the list on our "links" page HERE

Q: Will I need any type of live class?

A: AIT courses are designed for home study and over 90% of our students pass without the need of a class. We also offer online courses in several areas, including insurance pre license, insurance and securities CE, real estate, appraisal, futures and select FINRA licenses. The home study course is always needed first. Please visit our study course section.

Q: Do you offer insurance license training?

A: Yes and all online! You can view the courses Here

Q: You have a large site with many courses - are they all listed on one page?

A: Right HERE or you can find all the links from our home page.

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Ordering Questions

Q: How soon will I receive my course material?

A: All USA orders are sent UPS for delivery within 2-5 business days. For an additional charge, you can inquire about priority shipping rates by contacting us, but all courses go out immediately - so your study material will arrive quickly regardless.

Q: What if I am ordering overseas?

A: International orders are sent FedEx and is usually delivered to you in 1 week. You can save on shipping and study time by taking our FAST ONLINE COURSES - No books required.

Q: I see we can order online with a credit card, but can I send a check?

A: Yes. Just order online as you would if you were paying by credit card. Put in all of your shipping and billing information. You will then be taken to a pre-order screen. That screen will have the total and your address (credit card customers would continue the process to one more screen for completion). However, check paying customers can simply print that pre-order form and mail it with a check.

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General Career Questions, Sponsorship and Independent Broker Dealer Set ups

Q: Do you offer Series 7 exam sponsorship and a service setting up brokers and advisors to work independently?

A: Yes and No. We are not a firm, so we cannot sponsor. We do provide a great email newsletter for people looking to get a SERIES 7 SPONSOR AIT also has a partner FIRM firm within our company that specializes in setting individuals or groups as independent brokers. This is a national firm with multiple branch offices. This would include sponsorship, for qualified people. If you are interested in becoming an independent broker or add investments to your existing professional practice, you should contact us or learn more HERE (email form only - no calls). If you are looking to break into the business, you should study and pass the Series65 and Series 63 - to name two. Many banks, financial planning companies and others will look for these licenses. In this competitive job market - getting licenses to add to your resume is VERY important in giving you an advantage over other candidates.

PLEASE NOTE: Our firm will only consider sponsoring for the Series 7 if the person or group has an existing business (insurance, real estate, CPA etc.) and is looking to offer investments or insurance product to their clients and wants to get licensed AND have a firm to clear trades through. Our firm is looking for people with potential and a business plan for success. They are not going to "sponsor" people just for someone to get their license - no firm can or will do that. Please do not contact AIT for this part of our business unless you are a licensed producer looking to go independent or a financial business with clients. Our firm does not sponsor the Series 6 under any circumstances. The 7 is always required to work as an independent for us. To be considered for this type of set up, please Contact Us Here. All submissions are kept completely confidential, especially if you are a licensed producer looking to move to a new firm.

Q: Can I take the Series 7 Exam without affiliating with a firm directly?

A: No. What many of our students do is begin studying for the exam and adding that they are "Preparing for the Series 7" on their resume. Firms are looking for people who take initiatives like this. AIT also makes our students resumes available to our firms. Any person who purchases a study course from us is entitled to this free resume assistance service.

Q: What licenses can I get on my own to make myself more attractive to employers?

A: This business has gotten extremely competitive. Any licensing that you do can work to your advantage. Independently, and without company affiliation, you can take the SERIES 65. The Series 65 is to become a Registered Investment Adviser. It is for fee based financial planning. It looks terrific on a resume, takes about 4 weeks to study for, and is given daily like all the other exams. Another good independent test you can do is the SERIES 63. The Series 63 is pretty much mandatory to work in the investment business. Note: You can take the SERIES 66 independently, but this license is only active when you also pass the Series 7. You can take the 66 first though. All self registration exams can be taken using the U-10 form, which can be found on our links page.

Q: What other FINRA administered licenses can I or should I take on my own?

A: All of the National Futures Association exams can be taken independently. These include the SERIES 3, SERIES 30, and the SERIES 31.

Q: How do I sit for independent exams?

A: There are links to a list of test centers and the form to register for the exams on our links page. The home study courses are available Here

Q: Does it matter what state I live in?

A: No. finra tests are all federal exams. However, insurance license courses and insurance CE are based on the state. Our site has links for each state regarding insurance licensing and Insurance CE

Q: I would like to know more about the brokerage industry, and how the industry works as a whole?

A: This business is very large and there are literally dozens of ways to enter it. If you wish to learn all that is involved, AIT's has a book titled "How to become a successful broker and advisor . This includes Licensing procedures, list of select firms nationwide, description of each type of broker, Series 7 sponsorship, career options, including how to even work out of your home. It will save you a lot of time and energy and clear up any confusion you may have as a beginner.

Q: I am currently in school but would like to be educated in the securities business before I graduate. What would assist me?

A: As far as learning about investment concepts, rules and characteristics of the securities themselves, the Series 7 course is the best to use even if you are not planning to take the Series 7 exam. People have bought that course just to understand their own investments better. You can also view some Books on investments like Options, and Bonds.

If you are more interested in the employment/business end of the industry, you should consider the "broker guide" available Here

Series 7 Test Questions

1. Betsy has just opened an options account and enters an order to buy 1 XYZ Oct 70 Call for $300. What is Betsy?s maximum potential gain?

A) $300
B) $6700
C) $7000
D) Unlimited

Correct answer is D: The maximum gain for the Betsy for the purchase of a call option is unlimited. The appreciation of the underlying stock can go up forever. The maximum loss that Betsy can incur is only the premium paid of $300.

2. A customer has a short margin account with a short market value of $22,000, a credit balance of $42,000 and SMA of $500. What is the equity in the account?

A) $500
B) $20,000
C) $20,500
D) $37,000

Correct answer is B: The equity in a short margin account is equal to the credit balance minus the short market value. SMA is not used when computing equity.

3. A customer has a short margin account with a short market value of $22,000, a credit balance of $42,000 and SMA of $500. What is the NYSE minimum equity maintenance on this account?

A) $5500
B) $6000
C) $6600
D) $12,600

Correct answer is C: Minimum equity maintenance on short margin accounts is 30%. NYSE rules state that you must maintain at least 30% equity based on the current short market value. The short market value of $22,000 must be multiplied by 30%. This equals $6600.

4. An investor owns 100 shares of LKI at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points. Which of the following orders would be the best recommendation?

A) Sell limit order
B) Sell stop-limit order
C) Sell stop order
B) Buy stop order

Correct answer is B: A sell stop-limit order would be the best choice. A sell stop-limit order specifies a price, but will not turn into a market order. This order will only get executed at the price or better. Stop orders, although quicker in execution, will turn into market orders and the customer will not be guaranteed a specific price. Stop-limit orders are risky, in that the order may or may not get executed, but in this situation, it is the best choice.

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5. Assuming all of the following bonds from the same issuer are callable now, which one would most likely get called first?

A) 8% maturing 1-15-2016
B) 8% maturing 1-15-2007
C) 4% maturing 1-15-2012
D) 4% maturing 1-15-2007

Correct answer is A: Bonds with the highest coupon rates would be the first to most likely get called. The issuer will look to issue new debt at a lower rate. Since there are two 8% bonds, the one that would most likely get called, would be the issue with the longest maturity. This is because the bond is potentially more expensive with the amount of years it has compared to the shorter one.

6. A customer sells a 6% corporate bond on Tuesday October 4th for regular way settlement. The bond pays interest on July 1st and January 1st. How many days of accrued interest is this customer owed?

A) 98
B) 97
C) 96
D) 57

Correct answer is C: Accrued interest is the interest that is due a seller of a bond since the last day they were paid. Corporate bonds pay on a 30 day month/360 day year. They also settle on the 3rd business day following the trade date (T+3). The trade settles on Friday October 7th. The last pay date was July 1st. The customer is owed 30 days for July, 30 days for August , 30 days for September and 6 days for October. You do not include the settlement date of the 7th.

7. Customers who engage in increased activity of wiring money from their account could indicate which of the following activities?

A) Interpositioning
B) Churning
C) Crossing
D) Money laundering

Correct answer is D: Potential money laundering activities include excessive wiring of money between accounts.

8. Registered Representatives are not allowed to give gifts to customers or other individuals related to the securities business of the representative above:

A) $500
B) $200
C) $100
D) $50

Correct answer is C: The FINRA gift limit is $100.

9. A customer sells 100 shares of GHT short at $58 and buys 1 GHT Mar 60 Call @3. What is the customer?s maximum loss?

A) $500
B) $100
C) Unlimited
D) $5500

Correct answer is A: The customer sold short at $58. The call with a strike price of 60, gives this person the right to buy back the stock at $60. If the stock rises, the call can be used to limit the loss to 2 points. The customer can lose $200 on the stock. The customer also paid a $300 premium. Loss potential is $500.

10. A customer owns 200 shares of GHY at $90, and wishes to hedge the position while generating income. What is the best recommendation?

A) Sell calls
B) Sell puts
C) Buy calls
D) Buy puts

Correct answer is A: Selling options will create income. The customer should sell calls. Calls are covered by the underlying stock. If the calls were exercised, the stock would be delivered to meet the obligation. The income also reduces the break-even of the stock.

Free Information

Q: Can I gain other securities information and education from your website?

A: Yes. You should definitely visit our Financial Terms Glossary to learn about various securities and much more. You should also bookmark it if you will be studying for or taking the Series 7, 65 or any one of the NASD exams. It can also help in deciding which types of investments you are interested in.


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