Series 7 Exam Overview

Introduction

• Series 7 exam: originally two 3-hour sessions, 250 questions.
• Conducted on third Saturday on campuses; results were mailed.
• Historical involvement with test takers: provided support and last-minute tips.
• Popular content: 'Series 7 Tips, Tricks, and Memory Aids' video.

Exam Preparation

• Suggested videos for last-minute preparation:
  • Tips, Tricks, and Memory Aids
  • Series 7 All the Math
  • New video: Series 7 in 60 Minutes
• These resources help get into the 'Series 7 mindset'.

Key Topics Overview

Equity Securities

• Common Stock: Fundamental to all corporations, must be issued.
• Treasury Stock: Reacquired by corp, no dividends or voting rights.
• Dividends: Cash or stock dividends declared by the board, impacts stock price.
• Ex-Dividend Date: Set by Uniform Practice Code, first date stock trades without dividend.
• Preferred Stock: Two types - straight (non-cumulative) and cumulative. Priority in dividends and liquidation over common stock.
• Rights vs. Warrants: Rights short-term, warrants long-term.
• ADRs: Allow US citizens to own foreign securities, involve currency risk.

Debt Securities

• Interest rate risk and credit risk are the main concerns.
• Types of Bonds:
  • Corporate Bonds: Secured (mortgage, equipment trust) and unsecured (debentures).
  • Government Bonds: Treasury bills (no interest rate risk), notes, and bonds.
  • Municipal Bonds: Geos and revenue bonds with different risk profiles.
• Yield Calculations: Current yield, yield to maturity, and yield to call.
• Zero-Coupon Bonds: Imputed interest, no reinvestment risk.

Other Securities

• Government Securities: Treasury securities, government-sponsored enterprises.
• CMOs: Tranches and associated risks.

Investment Strategies

• Modern Portfolio Theory: Beta (volatility measure), Alpha (performance measure).
• Municipal Securities: Tax benefits, types of bonds (GOs vs. revenue), tax implications.

Investment Vehicles

• Mutual Funds: Open-end vs. closed-end, ETFs, ETNs.
• Variable Annuities: Tax-deferred growth, withdrawal options.
• Partnerships: Structure, risks, and tax implications.
• Options: Strategies, risk management, and calculations.

Trading & Markets

• Market Types: Auction (NYSE) vs. negotiated quoted markets (NASDAQ).
• Orders: Market vs. limit orders, stop orders.
• Analysis: Technical (charts) vs. fundamental (financial statements).

Retirement & Margin Accounts

• Retirement Plans: Rules for withdrawals, types (IRA, 401k).
• Margin Accounts: Requirements, risks, and calculations.

Regulations & Compliance

• Reg T: Initial margin requirements, settlement timeframes.

Conclusion

• Emphasis on good rest before the exam for optimal performance.
• The three suggested videos can aid in last-minute preparation.
• The Series 7 exam covers a broad range of financial knowledge, stressing the importance of preparation.
• Encouragement for feedback on the new content format and utility.