NASD SERIES 7 EXAM QUESTION TYPES
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There are five types of questions found on the NASD series 7 exam


1. The Incomplete Sentence Format:

This type of format requires you to choose the best conclusion to complete the sentence.

Example:

The Federal Reserve Board (FRB) regulates:
a. Exchanges
b. Margin
c. Municipal securities industry
d. Futures market
(The correct answer is b.)


2. Closed Stem Format In this format, you must select the best possible response.

Example:

General Obligation bonds are secured by which of the following?
a. impact fees
b. Project revenue
c. Taxes
d. Moral obligations
(The correct answer is c.)


3. The EXCEPT Format: This format requires you to select the one incorrect response from among the choices presented.

Example:

All of the following are characteristics of Treasury notes EXCEPT:
a. They have a maximum maturity of ten years
b. They are sold at auctions
c. They are interest bearing securities
d. They are sold at discount
(The correct answer is d.)


4. The Least / Most / Best Format: This type of questions requires you to select an item that is either better or worse than the others.

Example:

Which of the following best describes T-bills?:
a. Long-term Treasury obligations
b. Short-term treasury obligations
c. Interest bearing securities
d. Non-marketable debt of the federal government
The correct answer is b.)


5. Roman Numeral Format: This type requires determining the proper sequence or ranking of a set of items or when there is more than one correct response.

Example:

Place the following Moody ratings from highest to lowest:
I. Baa
II. B
III. A
IV. Aa
a.) II, I, III, IV
b.) I, II, IV, III
c.) III, II, IV, I
d.) IV, III, I, II
(The correct answer is d.)


Example 2 (Roman Numeral Format):

Which two of the following are on the down side of the market?:
I. Holder of a call
II. Writer of a call
III. Holder of a put
IV Writer of a put
a.) I & III
b.) I & IV
c.) II & III
d.) II & IV
(The correct answer is c.)

APPROXIMATE NUMBER OF QUESTIONS PER SUBJECT

MUNICIPAL SECURITIES (50)- Types of Municipal Securities, Primary and Secondary Market, MSRB Rules.
OPTIONS (50)- Strategies and Product Knowledge.
NEW YORK STOCK EXCHANGE (15)- Types of Orders, Floor Procedures, Tape Reading.
CUSTOMER ACCOUNTS (15)- Opening and Maintaining Customer Accounts.
REGULATIONS (15)- Securities Acts, NASD Rules.
DIRECT PARTICIPATION PROGRAMS (15)- Formation and Regulation, Types of Programs.
CORPORATE SECURITIES (15)- Common and Preferred Stock, Corporate Bonds.
PACKAGED SECURITIES (20)- Mutual Funds, Variable Annuities, REITs.
SECURITIES AND ECONOMIC ANALYSIS (15)- Technical and Fundamental Analysis, Economics.
U.S. GOVERNMENT SECURITIES (15)- Treasury and Agency Securities, CMOs.
MARGIN (10)- Regulations, Formulas and Computations.
TAXATION AND RETIREMENT PLANS (15)- Taxation of Securities, Qualified and Non-qualified Plans.
TOTAL QUESTIONS 250