FREE Series 7 Study Guide 2026: A Complete, FINRA-Aligned Walkthrough

This free Series 7 study guide walks through the topics that drive the FINRA General Securities Representative Qualification Examination, organized into six modules built around FINRA’s four major job functions.^[1]

It’s interactive, not a wall of text: every module has built-in flashcards, worked scenarios, and practice questions, so you learn by doing — not just reading.

Read it module by module, work the scenarios, then round out your prep with our practice exam, flashcards. The Series 7 is the “top-off” exam taken on top of the SIE and requires sponsorship by a FINRA member firm.

Series 7 Exam Snapshot

One job function dominates the test: Function 3 — providing information, making recommendations, transferring assets, and maintaining records — is about 73% of the scored questions. Budget your study around it:^[1]

Equity Securities

Equity securities represent ownership in a corporation, and the Series 7 expects you to know exactly what each type of equity gives the holder. Most of this content sits in Function 3 (information and recommendations), where you compare instruments and match them to a customer profile^[2].

This guide teaches the high-yield distinctions: common-stock versus preferred-stock, the variations of preferred, how rights and warrants differ, and how foreign shares trade through ADRs. Expect application questions, not just definitions — for example, which security a growth-oriented client should hold, or who has voting power^[1].

Master the rights of an shareholder, the dividend hierarchy, par-value versus market value, and the tax treatment of QDI dividends. These facts recur across suitability, taxation, and corporate-action questions.

Common Stock: Ownership, Voting, and Shareholder Rights

Common stock is the most junior equity — common shareholders are paid last in a liquidation, after creditors, bondholders, and preferred shareholders^[1]. In exchange for that residual position, common holders have the greatest growth potential and the right to vote.

Voting rights cover the election of the board of directors and major corporate matters such as mergers or issuing additional senior-securities. statutory-voting caps votes per candidate at shares owned; cumulative-voting lets a holder pool all votes onto one candidate, which favors smaller (minority) shareholders^[1].

Other shareholder rights include the right to inspect books and the annual report, to receive declared dividends, and a preemptive-right to maintain proportional ownership when new shares are issued^[3]. Limited liability caps the holder's loss at the amount invested.

Watch the share-status vocabulary: authorized (max in the charter), issued (sold), treasury-stock (repurchased, non-voting, no dividends), and outstanding (issued minus treasury). Outstanding shares are what vote and receive dividends.

Preferred Stock and Its Variations

Preferred stock is an equity security that behaves like a fixed-income instrument: it pays a fixed dividend (stated as a percentage of its $100 par-value or in dollars) and is more sensitive to interest rates than to company growth^[1]. Preferred is senior to common for dividends and in liquidation but junior to all debt.

Standard ('straight') preferred pays a fixed dividend with no extra features. cumulative-preferred accrues any skipped (omitted) dividends as dividends in arrears, which must be paid in full before common holders receive anything^[1].

participating-preferred may receive extra dividends above its stated rate when the company prospers; callable-preferred lets the issuer redeem shares (usually at a premium) and typically carries a higher rate to compensate for call risk. convertible-preferred can be exchanged for a set number of common shares, linking its price to the common.

Preferred shares generally carry no voting rights. Adjustable-rate preferred resets its dividend to a benchmark, reducing price volatility; that lower volatility usually means a lower yield than fixed-rate preferred.

Rights vs. Warrants

Both rights and warrants let the holder buy stock at a fixed price, but they are tested as opposites. A right is issued to existing shareholders (honoring the preemptive right), is short-term (typically 30-45 days), and has a subscription-price BELOW the current market price^[3].

A warrant is a long-term instrument (often years, sometimes perpetual) usually attached to a bond or preferred stock as a 'sweetener' to make the offering more attractive. Its exercise price is set ABOVE the market price at issuance, so it has no immediate intrinsic value^[1].

Neither rights nor warrants pay dividends or carry voting rights — they are not stock until exercised. Both trade in the secondary market separately from the underlying shares.

Memory hook: Rights are a Reward to current owners (short, in-the-money), Warrants are a long-term Wager (issued out-of-the-money).

American Depositary Receipts (ADRs)

An ADR is a negotiable receipt, issued by a U.S. bank, representing a specific number of shares of a foreign company held on deposit abroad^[4]. ADRs let U.S. investors buy foreign equity in U.S. dollars, settling and trading like a domestic stock.

ADR holders face currency-risk: because the underlying shares are priced in a foreign currency, exchange-rate swings affect the ADR's value and dividend, which is converted to dollars^[4]. Dividends may also be subject to foreign tax withholding, often recoverable as a U.S. foreign tax credit.

ADR holders generally have no voting rights and no preemptive rights — the depositary bank holds the underlying shares and votes them. Investors receive dividends in dollars but bear political and currency risk of the home country.

ADRs are a common suitability answer for a client wanting international diversification without trading directly on foreign exchanges.

Dividends and Equity Taxation

Cash dividends follow the DERP sequence: Declaration, Ex-dividend, Record, Payable. An investor must own the stock before the ex-dividend date to receive the dividend; on the ex-date the stock typically opens lower by the dividend amount^[2].

QDI from common and most preferred stock are taxed at the favorable long-term capital-gains rate, provided the holding-period rule is met^[5]. Ordinary (non-qualified) dividends are taxed at the investor's regular income rate.

A stock-dividend or stock split is not currently taxable; instead the investor's cost basis is spread over more shares, lowering per-share basis. Selling appreciated stock held over 12 months produces a long-term capital gain^[5].

Inherited shares receive a stepped-up cost basis to fair market value at death, while the wash-sale rule disallows a loss if a substantially identical security is repurchased within 30 days before or after the sale^[5].

Debt Securities

Debt securities are a heavily tested cluster inside Series 7 Function 3, the job function that carries roughly 73% of the exam. You must move past SIE-level recall and apply judgment: read a customer profile, pick the right bond, and run the math.^[2]

This domain rewards mastery of four issuer families: corporate bonds, U.S. Treasury securities and federal agency securities, tax-advantaged municipal bonds, and short-term money market instruments. Expect bond-math calculations, the yield ladder, accrued-interest day counts, and the muni tax-equivalent yield (TEY) formula.^[6]

Anchor every fact to the issuer. Treasury interest is state-tax-free; muni interest is federally tax-free; corporate interest is fully taxable. Getting the issuer-to-tax mapping right resolves a large share of debt questions.

Bond Pricing, Yields & the Yield Ladder

Bonds trade with an inverse price-yield relationship: when market rates rise, existing bond prices fall, and vice versa. par value is $1,000; a price of 95 means $950 (a discount), and 105 means $1,050 (a premium).^[7]

nominal yield (the coupon) is fixed. current yield $= \frac{\text{annual coupon}}{\text{market price}}$. yield to maturity (YTM) factors in the gain or loss versus par at maturity; yield to call (YTC) does the same to the call date.^[7]

Memorize the yield ladder. Discount bond: $\text{Nominal} < \text{Current Yield} < \text{YTM} < \text{YTC}$. Premium bond: $\text{YTC} < \text{YTM} < \text{Current Yield} < \text{Nominal}$. At par, all four are equal.^[6]

A basis point equals 0.01%, so $100 \text{ basis points} = 1\%$. Zero-coupon bonds and Treasury STRIPS have the highest duration, meaning their prices swing the most when rates move.^[8]

Corporate Bonds & Convertibles

Corporate bonds pay fully taxable interest (federal, state, and local). They are classified by collateral: secured bonds (mortgage bonds, equipment trust certificates) are backed by specific assets, while debentures are backed only by the issuer's general credit.^[9]

Watch protective features. A callable bond lets the issuer redeem early (a risk to the investor when rates fall); a put bond lets the holder redeem early. A sinking fund sets aside money to retire bonds, improving safety.^[9]

convertible bonds can be exchanged for common stock. Conversion ratio = $1,000 par divided by the conversion price. Stock parity $= \frac{\text{bond price}}{\text{ratio}}$; bond parity $= \text{stock price} \times \text{ratio}$.^[6]

Corporate trades are reported to FINRA's TRACE system, and corporate bond accrued interest is calculated on a 30/360 day-count basis.^[10]

U.S. Government & Agency Securities

U.S. Treasury securities are the credit benchmark: backed by the full faith and credit of the U.S. government. T-bills mature in one year or less and are issued at a discount (no coupon); T-notes mature 2-10 years; T-bonds mature 10-30 years.^[11]

STRIPS are Treasury zero-coupon securities. TIPS adjust principal for inflation via CPI. Both STRIPS and TIPS generate phantom income (taxable accretion or inflation adjustment) that is taxed annually even though no cash is received.^[11]

Treasury interest is taxable at the federal level but exempt from state and local tax. Treasury accrued interest uses an actual/actual day count, unlike the 30/360 used for corporate and muni bonds.^[10]

Agency securities include mortgage-backed pass-throughs. GNMA (Ginnie Mae) carries the full faith and credit of the U.S. government; FNMA and FHLMC are government-sponsored but not directly guaranteed. CMOs slice mortgage cash flows into tranches.^[12]

Municipal Securities

municipal bonds interest is exempt from federal income tax, and triple-tax-exempt (also state and local) for in-state residents. Capital gains on munis are still fully taxable, and that is a classic exam trap.^[13]

Two main types. general obligation (GO) bonds are backed by the issuer's full faith, credit, and taxing power, usually requiring voter approval. revenue bonds are backed only by a specific project's income, so analyze the feasibility study and debt-service coverage.^[13]

Some munis are taxable. Interest on certain private-activity bonds can trigger the alternative minimum tax (AMT), and Build America Bonds are fully taxable. Never assume all munis are tax-free.^[13]

Muni rules come from the MSRB; trades report to the EMMA system. Short-term municipal notes (TANs, RANs, BANs) are rated MIG 1-3. Muni accrued interest uses 30/360.^[14]

Money Market Instruments

money market instruments are high-quality debt maturing in one year or less, used for liquidity and capital preservation. They suit conservative clients and cash-management needs, not growth objectives.^[15]

Common instruments: T-bills, commercial paper (unsecured corporate notes up to 270 days, sold at a discount), negotiable CDs ($100,000+ jumbo CDs), banker's acceptances for foreign trade, and repurchase agreements.^[15]

On the muni side, tax-exempt commercial paper and variable-rate demand obligations provide short-term, tax-advantaged parking. Money market mutual funds aim to hold a stable $1.00 net asset value.^[15]

Accrued Interest & Settlement

When a bond trades between coupon dates, the buyer pays the seller the accrued interest earned but not yet paid. It is added to the price on the trade confirmation.^[10]

Day-count conventions differ by issuer: corporate and municipal bonds use 30/360; U.S. government securities use actual/actual. Memorize this split because it is frequently tested.^[10]

Accrued interest counts from the last coupon date up to, but not including, the settlement date. Regular-way settlement is T+1 for stocks, corporate, muni, and Treasury securities, effective May 28, 2024.^[16]

Options

Options are the single most-tested and most-failed area of the Series 7. They live inside Major Job Function 3, which alone is about 73% of the 125 scored questions, and option strategy math drives a large share of the exam's calculation problems.^[2]

Every listed equity option contract controls 100 shares, so dollar figures always equal $\text{points} \times 100$. The premium you pay or receive is split into intrinsic value plus time value, and it is always part of the breakeven.^[18]

This section teaches the four single positions, vertical spreads, straddles, hedging with stock, currency hedging, and options taxation. Use a T-chart (money out vs. money in) on every problem rather than computing in your head.^[17]

The Four Single Positions

Memorize these cold — every complex strategy is built from them. A long call is bullish with unlimited gain and loss capped at premium; a short call is bearish with gain capped at premium and unlimited loss.^[6]

A long put is bearish; a short put is bullish. Use "call up, put down": call breakeven $= \text{strike} + \text{premium}$, put breakeven $= \text{strike} - \text{premium}$.^[18]

The single most-flipped fact: when a short put is exercised, the writer must BUY the stock at the strike; when a short call is assigned, the writer must SELL.^[19]

Vertical Spreads (Debit vs. Credit)

A spread is one long and one short option of the same type (both calls or both puts) with different strikes. A debit spread is one you pay for; a credit spread is one you receive net premium for.^[18]

For a debit spread, max loss = the net debit and max gain $= \text{strike difference} - \text{net debit}$; you want it to widen and exercise ("DEW"). For a credit spread, max gain = net credit and max loss $= \text{strike difference} - \text{net credit}$; you want it to narrow and expire ("CEN").^[20]

Find breakeven with "CAL/PUSH": Call spreads ADD net premium to the LOWER strike; Put spreads SUBTRACT net premium from the HIGHER strike.^[17]

Straddles and Combinations

A long straddle buys a call and a put at the same strike and expiration — a bet on big movement (volatility) in either direction. Max loss = total premiums paid; max gain is unlimited on the upside.^[18]

There are two breakevens: $\text{strike} + \text{total premium}$ and $\text{strike} - \text{total premium}$. A long straddle profits OUTSIDE the breakevens; a short straddle profits INSIDE them and carries unlimited loss. Remember "SILO — Short Inside, Long Outside."^[17]

A short straddle collects both premiums and wins only if the stock stays near the strike, making it a pure volatility-selling play with dangerous open-ended risk.^[20]

Hedging with Stock: Covered Calls and Protective Puts

A covered call is long stock plus a short call against it — a neutral-to-bullish income strategy. Breakeven $= \text{stock cost} - \text{premium received}$; max gain $= (\text{strike} - \text{stock cost}) + \text{premium}$.^[18]

A protective put (a "married put") is long stock plus a long put used as insurance — bullish with downside protection. Breakeven $= \text{stock cost} + \text{premium}$; max loss $= (\text{stock cost} - \text{strike}) + \text{premium}$.^[17]

Choose the hedge by what the client fears: a long stockholder buys puts (or sells covered calls) to protect a long position; a short seller buys calls to cap upside risk.^[20]

Currency Hedging and Exercise Mechanics

There are NO listed options on the U.S. dollar. To hedge dollar exposure, take a position in the foreign currency: an importer paying in euros buys euro calls; an exporter receiving euros buys euro puts.^[17]

Listed options are issued, guaranteed, and settled by the Options Clearing Corporation (OCC). American-style equity options can be exercised any day before expiration; assignment is allocated randomly or FIFO by the firm.^[21]

Before any options account is approved, the customer must receive the Options Disclosure Document (OCC's "Characteristics and Risks of Standardized Options").^[21]

Options Taxation

A premium itself is not taxed when paid or received — tax is triggered at sale, expiration, or exercise. If an option expires worthless, the holder has a capital loss and the writer has a short-term capital gain equal to the premium.^[22]

On exercise, premiums fold into the stock's cost basis. A call buyer who exercises ADDS the premium to the strike (raising basis); a put writer who is assigned SUBTRACTS the premium from the strike (lowering basis).^[23]

Holding period for the resulting stock starts the day after exercise, not when the option was bought. Note that buying a protective put can suspend the holding period on the underlying stock.^[22]

Packaged Products & Alternatives

Packaged products bundle a portfolio of securities into a single investment, and they account for roughly 12-15 of the 125 scored questions on the Series 7 — squarely inside Function 3, which is about three-quarters of the exam.

This domain rewards precise definitions and a handful of formulas. You must distinguish an open-end fund from a closed-end fund and a UIT, compute NAV and POP, know when the 8.5% sales-charge cap applies, and understand how variable annuity payouts, REIT income, and DPP losses are taxed and to whom they are suitable.

The recurring traps are predictable: confusing forward pricing with continuous trading, recommending illiquid products to clients who need cash, and reversing the direction an AIR pushes annuity payments. Master the tables below and you convert a hard cluster into reliable points.

Investment Company Structures: Open-End, Closed-End, and UITs

The Investment Company Act of 1940 defines three types. An open-end fund (mutual fund) continuously issues and redeems shares at NAV, so shares trade only with the fund — never in the secondary market.^[15]

A closed-end fund issues a fixed number of shares in an IPO, then trades on an exchange at a market price set by supply and demand — which can be above (premium) or below (discount) NAV.^[15] A UIT holds a fixed, unmanaged portfolio, issues redeemable units, and has a stated termination date.

forward pricing applies to mutual funds: an order fills at the next NAV computed after the order is received, not the last published price.^[24] This blocks late-trading and is a frequent exam point.

Mutual Fund Pricing: NAV, POP, and the 8.5% Cap

NAV per share $= \frac{\text{total assets} - \text{liabilities}}{\text{shares outstanding}}$.^[15] The POP (public offering price) is what the investor pays: NAV plus the sales charge.

For a front-end-load fund, $\text{POP} = \frac{\text{NAV}}{1 - \text{sales-charge \%}}$, and $\text{sales charge \%} = \frac{\text{POP} - \text{NAV}}{\text{POP}}$.^[15] FINRA Rule 2341 caps the sales charge at 8.5% of the POP for funds offering breakpoints, rights of accumulation, and reinvestment of dividends at NAV.^[25]

A breakpoint is a reduced sales charge at higher investment levels.^[15] A breakpoint sale — letting a client invest just under a breakpoint to earn a higher commission — is a prohibited violation.

Mutual Fund Share Classes and 12b-1 Fees

Share classes change how the load is collected. Class A charges a front-end load but lower ongoing fees, making it best for large, long-term investments that reach breakpoints.^[15]

Class B charges a back-end load — a CDSC (contingent deferred sales charge) that declines yearly to zero, after which B shares often convert to A. Class C (level-load) charges no front-end load but a higher ongoing 12b-1 fee, best for short horizons.

A 12b-1 fee is an annual asset-based charge for distribution/marketing, deducted from fund assets and capped by FINRA (a fund cannot call itself 'no-load' if its 12b-1 fee exceeds 0.25%).^[25] Funds must qualify as a regulated investment company under Subchapter M — distributing at least 90% of net investment income — to pass income through to shareholders untaxed at the fund level (the conduit/pipeline rule).^[26]

ETFs vs. Mutual Funds

An ETF holds a portfolio (often index-tracking) but trades intraday on an exchange like a stock, at market prices that closely track NAV via the creation/redemption mechanism.^[27]

Unlike mutual funds, ETFs can be bought on margin and sold short, carry brokerage commissions rather than loads, and are generally more tax-efficient because in-kind redemptions limit capital-gains distributions.^[27]

Suitability cue: ETFs suit cost-conscious, trading-oriented investors wanting intraday liquidity and broad exposure; mutual funds suit dollar-cost-averaging and automatic reinvestment.

Variable Annuities and the AIR

A variable annuity is a securities product (SEC-registered, prospectus required, dual insurance/securities license to sell) with two phases.^[28] During accumulation, premiums buy accumulation unit whose value varies with the separate account; at annuitization these convert to a fixed number of annuity unit whose dollar value fluctuates.

The AIR (assumed interest rate) is a benchmark, not a guarantee. If actual separate-account performance exceeds the AIR, the next payment rises; if it equals the AIR, the payment is unchanged; if it falls below, the payment drops.^[28]

Earnings grow tax-deferred and are taxed as ordinary income (LIFO) on withdrawal — there is no step-up at death and no preferential capital-gains rate. A 1035 exchange lets an annuity be swapped for another tax-free. Munis and VAs in an IRA are generally redundant/unsuitable.

REITs and Direct Participation Programs (DPPs)

A REIT is not a DPP and not an investment company — it does not pass through losses. To avoid corporate tax it must distribute at least 90% of taxable income, invest at least 75% of assets in real estate, and derive at least 75% of income from real estate.^[29] Exchange-traded REITs are liquid; non-traded REITs are illiquid and unsuitable for clients needing cash.

A DPP (limited partnership) is a flow-through entity: income, gains, losses, and credits pass directly to investors, avoiding entity-level tax.^[2] passive loss can offset only passive income — never wages or portfolio income. A general partner has unlimited liability and manages; limited partners have liability capped at their investment plus recourse debt.

An investor's deductible loss is limited to at-risk basis (cash plus recourse debt). A program with no economic substance — a 'pure tax shelter' — is unsuitable. DPPs are illiquid, long-horizon, and suit high-net-worth investors seeking passive income or specific tax benefits.

Customer Accounts, Suitability & FINRA Rules

On the Series 7, opening accounts and making recommendations is where judgment replaces recall. You must match a product to a client's full profile, not just a stated goal, and document the account correctly from the first form to the trade ticket.

This domain blends Reg BI, FINRA Rule 2111 suitability, account registration mechanics, and the Bank Secrecy Act /AML program. Most questions are scenario-driven, asking what you should do, not what a term means.^[30]

Master the registration types, the suitability profile, the four Reg BI obligations, and the two AML filing thresholds. These appear repeatedly and reward clean memorization over guesswork.^[34]

Opening Accounts: Registration Types & Required Information

Every new account needs the customer's name, address, date of birth, Social Security or tax identification number, employment, and financial profile. FINRA Rule 4512 also requires reasonable effort to obtain a trusted contact person's information for senior-protection purposes.^[33]

Joint registration matters at death. In JTWROS, a deceased owner's interest passes automatically to the survivor(s); in Tenants in Common, the fractional share passes to the decedent's estate and heirs. Each owner can act for the whole account, but checks are payable to all parties.

UGMA /UTMA custodial accounts are irrevocable gifts: one custodian, one minor, with income taxed to the minor under kiddie-tax rules. UTMA permits broader assets and a later transfer age than UGMA. Munis are unsuitable here and in IRAs.

Discretionary trading requires prior written authorization under FINRA Rule 3260; choosing only time or price is not discretion. Each order must be marked discretionary and reviewed by a principal.^[35]

Reg BI and the Suitability Framework

Reg BI (SEC Rule 15l-1) requires firms to act in a retail customer's best interest at the time of a recommendation. Its four obligations are Care, Disclosure, Conflict-of-Interest, and Compliance, often recalled as CDCC. Form CRS is delivered to retail customers.^[31]

FINRA Rule 2111 suitability has three prongs: reasonable-basis (the product is suitable for someone), customer-specific (suitable for this client), and quantitative (the volume of trading is not excessive, i.e., anti-churning). Rule 2090 requires knowing the essential facts of each account.^[30]

The suitability profile includes age, income, net worth, objectives, risk tolerance, time horizon, liquidity needs, tax status, and experience. When narrowing answers, weigh risk tolerance and time horizon first.

Match the entire profile, not the stated objective. A 70-year-old saying "growth" usually needs capital preservation; a short horizon or high liquidity need implies lower risk tolerance.^[36]

• High tax bracket + income goal: municipal bonds
• Low tax bracket + income goal: taxable bonds
• Conservative: governments, money-market, fixed annuities
• Aggressive: small-cap, emerging markets, options
• Liquidity need soon: avoid DPPs and non-traded REITs

Suitability in Practice: Worked Scenario

Suitability questions rarely have an obviously wrong answer; two choices often look plausible. Pick the most suitable for the full profile, and let tax status and liquidity break ties.^[36]

A classic trap is placing tax-exempt municipal bonds inside an IRA. The IRA already shelters income, so the muni's tax exemption is wasted, making it unsuitable regardless of the client's bracket.

Options & Margin Account Documentation

Options accounts use approval levels keyed to risk: covered/protective writing at the lowest level, then long options and spreads, then short uncovered puts and straddles, and naked calls at the highest. A registered options principal approves the account.

The options account agreement must be signed and returned within 15 days of approval; the Options Disclosure Document must be delivered at or before account approval. Trading may begin before the signed OAA is returned, but the form is still required.

Margin accounts require a hypothecation agreement (pledges securities as collateral) and a credit agreement (terms of the loan). The optional loan consent agreement lets the firm lend the customer's securities to others.

Minimum equity to open a long margin account is $2,000, or 100% of the purchase if it is below $2,000. Reg T initial requirement is 50% of the purchase.^[35]

Anti-Money Laundering, BSA & the USA PATRIOT Act

The Bank Secrecy Act, administered by FinCEN, requires every firm to maintain a written AML program with a designated compliance officer, ongoing training, and independent testing. The USA PATRIOT Act added the Customer Identification Program and OFAC sanctions screening.^[32]

A Currency Transaction Report (FinCEN Form 112) is filed for cash transactions that exceed $10,000 in a single day, aggregated across the customer. A Suspicious Activity Report is filed for suspicious activity at or above $5,000.^[34]

SAR filings are confidential. The firm must not notify the customer that a SAR was filed; doing so is a violation. Structuring transactions to stay under the $10,000 CTR threshold is itself a red flag.

CIP requires name, address, date of birth, and a taxpayer ID before or shortly after the account opens, with identity verified against government and OFAC lists.^[32]

Trading Markets, Taxation & Retirement

On the Series 7, the mechanics of getting a trade done and the tax and retirement rules that follow live mostly in Function 4 (order handling, processing, and settlement, about 11 percent of scored questions) plus the taxation and retirement content folded into the giant Function 3 block (here labeled Section 6).^[1] Master these and you protect easy points the way candidates lose them: rushing a wordy stem with one buried qualifier.^[42]

This section teaches order types and triggers, the post-2024 t+1 cycle and dividend dates, the leading or coincident or lagging economic indicators, cost basis and the wash sale, and the current 2026 retirement-plan numbers. Each fact below is anchored to FINRA, the SEC, the MSRB, or the IRS.^[2]

Order Types and Stop Triggers

A market order fills immediately at the best available price; a limit order sets a price ceiling to buy or floor to sell and may never fill. Read the qualifier on every order question, because EXCEPT and NOT flip the answer and are the number-one careless error.^[42]

Stops are the classic trap. A buy stop is placed ABOVE the current market and protects a short position; a sell stop is placed BELOW the market and protects a long position. People reverse these constantly.^[37]

Know what an order becomes when triggered. A triggered plain stop becomes a market order and is guaranteed to fill; a triggered stop-limit becomes a limit order that may not fill if the price runs away.^[37]

Qualifiers stack on top: AON (all or none), FOK (fill or kill), IOC (immediate or cancel), and GTC (good til canceled, which firms periodically purge) versus a day order that dies at the close.

• Buy stop: triggers ABOVE the market; protects a short sale (mnemonic: BLiSS / SBL, buy stops and sell limits go above).
• Sell stop: triggers BELOW the market; protects a long position.
• Stop order, once triggered, becomes a market order (fills).
• Stop-limit, once triggered, becomes a limit order (may not fill).

Settlement (T+1) and Dividend Dates

Regular-way settlement is T+1 settlement (trade date plus one business day), effective May 28, 2024, for equities, corporate and municipal bonds, Treasuries, ETFs, and UITs. Any study material still saying T+2 or T+3 is stale.^[16]

Dividend dates run in the order DERP: Declaration, Ex-dividend, Record, Payable. To receive a dividend you must own the stock before the ex-dividend date; buying on the ex-date is too late.^[38]

On a regular cash dividend the ex-date is set by the exchange and the stock opens lower by roughly the dividend amount. Match the ex-date to the T+1 cycle so the buyer is the owner of record.

• Regular-way: T+1 for stocks and most bonds (since May 28, 2024).
• Cash settlement: same-day (T+0), used to settle today.
• Buy before the ex-date to get the dividend; the seller keeps it otherwise.
• DERP order: Declaration to Ex to Record to Payable.

Accrued Interest and Day-Count Conventions

Bonds trade with accrued interest that the buyer pays the seller for interest earned since the last coupon. It accrues from the last coupon date up to but NOT including settlement, so an off-by-one day error is common.^[39]

The day-count convention depends on the issuer, and confusing them is repeatedly flagged as a top mistake. Corporate AND municipal bonds use 30/360 (thirty-day months, 360-day year); U.S. government bonds use actual/actual.^[39]

T-bills are different again: they pay no coupon, are issued at a discount, and trade flat (no accrued interest), as do bonds in default and zero-coupon bonds.

Economics: Leading, Coincident, and Lagging Indicators

The exam tests whether an economic indicator turns before, with, or after the broad economy. Leading indicators change first, coincident indicators move with the economy, and lagging indicators confirm a trend after the fact.^[40]

The stock market itself (the S&P 500) is the classic leading indicator, along with new building permits, new orders for consumer goods, and the money supply. These help forecast where the economy is heading.^[40]

Lagging indicators include corporate profits, the average duration of unemployment, and the prime rate. Coincident indicators include industrial production and non-farm payroll employment.^[40]

• Leading: stock market, building permits, new consumer-goods orders, money supply.
• Coincident: industrial production, capacity utilization, non-farm payrolls.
• Lagging: corporate profits, average duration of unemployment, prime rate.
• Recession (common definition): two consecutive quarters of falling GDP.

Taxation: Holding Periods, Wash Sales, and Cost Basis

Capital gains held MORE than 12 months are long-term gains taxed at preferential rates; 12 months or less is short-term and taxed as ordinary income. This holding-period line is heavily tested.^[41]

The wash sale rule disallows a loss if a substantially identical security is bought 30 days BEFORE or AFTER the sale (a 61-day window). The disallowed loss is added to the basis of the replacement shares, not lost forever.^[41]

Default cost basis is FIFO unless the client elects specific identification; mutual funds may also use average cost. Inherited securities receive a step-up in basis to date-of-death value, while gifted securities keep the donor's carryover basis.^[41]

Treasury interest is taxable federally but exempt from state and local tax. Municipal interest is the reverse: federally tax-exempt, but capital gains on a muni are still taxable, a classic trap.^[43]

• Long-term: held more than 12 months (preferential rate); short-term: 12 months or less.
• Wash sale: loss disallowed if a substantially identical security is bought within 30 days before or after.
• Inherited = step-up to date of death; gifted = donor's carryover basis.
• Zeros and TIPS create phantom income taxed annually even without cash received.

Retirement Plans (2026 Figures)

Know the account types: a Traditional IRA gives a potential pretax deduction with taxable withdrawals, while a Roth IRA is funded with after-tax dollars and offers tax-free qualified withdrawals. For 2026 the IRA contribution limit is $7,500, plus a $1,100 catch-up at age 50 and older.^[44]

Employer plans (401(k), 403(b), governmental 457) allow $24,500 in 2026, with an $8,000 catch-up at 50 and older and a higher $11,250 catch-up for those ages 60 to 63. SEP and SIMPLE IRAs serve small employers.^[44]

Required minimum distributions begin at age 73 under SECURE 2.0 (rising to 75 for those born in 1960 or later). A Roth IRA has NO RMD during the owner's lifetime, so never bury tax-free municipal bonds in a tax-deferred account.^[45]

Education accounts round out the set: 529 plans grow tax-free for qualified education expenses, and Coverdell ESAs cap contributions at $2,000 per year per beneficiary.

How to Use This Study Guide

A study guide is a map, not the whole territory — use it alongside your prep provider’s materials and our practice tools, not on its own:

Series 7 Glossary

Quick definitions for the terms you’ll see most on the Series 7 exam:

1035 exchange

A tax-free exchange under IRC Section 1035 of one annuity or life policy for another comparable contract.

12b-1 fee

An annual asset-based fee deducted from fund assets to pay for distribution and marketing; capped by FINRA rules.

2111

FINRA Rule 2111, the suitability rule with three prongs: reasonable-basis, customer-specific, and quantitative (anti-churning) suitability.

30/360

The day-count convention used for corporate and municipal bonds, assuming 30-day months and a 360-day year.

accrued

Interest earned but not yet paid, which the bond buyer pays to the seller at settlement.

accrued interest

Interest earned but not yet paid, which the bond buyer pays the seller from the last coupon date up to but not including settlement.

accumulation unit

A unit measuring an investor's interest in a variable annuity's separate account during the pay-in (accumulation) phase.

actual/actual

The day-count convention used for U.S. government bonds, counting the real number of days.

adr

American Depositary Receipt — a U.S. bank receipt representing shares of a foreign company, trading and settling in U.S. dollars.

ADR

American Depositary Receipt; lets U.S. investors hold foreign equity in dollars while bearing currency and political risk.

agency

Debt of federal agencies or government-sponsored enterprises such as GNMA, FNMA, and FHLMC.

AIR

Assumed interest rate — a benchmark return used to set variable-annuity payments; actual returns above, equal to, or below the AIR raise, hold, or lower the next payment.

AML

Anti-Money Laundering; the written program firms must maintain with a compliance officer, training, and independent testing.

amt

Alternative minimum tax; a parallel tax that can apply to interest from certain private-activity municipal bonds.

annuity unit

A fixed number of units established at annuitization; each unit's dollar value fluctuates with separate-account performance relative to the AIR.

at-risk basis

The amount an investor can actually lose — capital contributed plus recourse debt — which limits deductible DPP losses.

authorized

The maximum number of shares a corporation may issue, as set in its corporate charter.

ba

Banker's acceptance; a short-term time draft used to finance foreign trade, guaranteed by a bank.

bps

Basis point; one one-hundredth of a percent (0.01%), so 100 bps equals 1%.

breakeven-def

The underlying price at which a position produces neither profit nor loss; premium is always built into it ($\text{strike} + \text{premium}$ for calls, $\text{strike} - \text{premium}$ for puts).

breakpoint

A reduced sales charge a mutual fund grants at specified higher levels of investment.

breakpoint sale

A prohibited practice of selling fund shares in an amount just below a breakpoint to earn a higher sales charge.

BSA

Bank Secrecy Act, the core anti-money-laundering law requiring recordkeeping and reporting; administered by FinCEN.

buy stop

A stop order placed above the current market that activates as the price rises, often used to protect a short position.

callable

A bond the issuer can redeem before maturity, typically when interest rates fall.

callable-preferred

Preferred stock the issuer may redeem, usually at a premium; typically pays a higher rate to offset call risk.

cd

Negotiable (jumbo) certificate of deposit, typically $100,000 or more, that can be traded in the secondary market.

CDSC

Contingent deferred sales charge — a back-end load on Class B shares that declines over a holding period and eventually reaches zero.

CIP

Customer Identification Program; the USA PATRIOT Act requirement to collect and verify name, address, date of birth, and taxpayer ID.

closed-end fund

An investment company that issues a fixed number of shares in an IPO and then trades on an exchange at a market price that may be at a premium or discount to NAV.

CMO

Collateralized mortgage obligation; mortgage cash flows divided into tranches with different risk/maturity profiles.

commercial paper

Short-term unsecured corporate debt maturing in up to 270 days, issued at a discount.

common-stock

The most junior equity security; carries voting rights and the greatest growth potential but is paid last in liquidation.

contract

One listed equity option covering 100 shares of the underlying stock; total dollar value equals the quoted points multiplied by 100.

convertible

A corporate bond that can be exchanged for a set number of the issuer's common shares.

convertible-preferred

Preferred stock exchangeable into a fixed number of common shares, linking its price to the common stock.

corporate

Bonds issued by companies; interest is fully taxable at federal, state, and local levels.

coveredcall-def

Owning the underlying stock and writing a call against it to generate income; neutral-to-bullish with limited upside.

credit-def

A spread that produces net premium when established; maximum gain equals the net credit and the investor wants the spread to narrow or expire.

CTR

Currency Transaction Report (FinCEN Form 112) filed for cash transactions exceeding $10,000 in a single day per customer.

cumulative-preferred

Preferred stock whose skipped dividends accrue as arrears and must be paid in full before any common dividend.

cumulative-voting

A voting method allowing a holder to pool all votes (shares x seats) onto one or more candidates; favors minority shareholders.

currency-risk

The risk that foreign exchange-rate changes reduce the dollar value of an ADR or its dividends.

current-yield

Annual coupon income divided by the bond's current market price.

debenture

An unsecured corporate bond backed only by the issuer's general credit and earning power.

debit-def

A spread that costs net premium to establish; maximum loss equals the net debit and the investor wants the spread to widen.

derp

Dividend date sequence: Declaration, Ex-dividend, Record, Payable.

DERP

The chronological order of dividend dates: Declaration, Ex-dividend, Record, Payable.

DPP

Direct participation program (limited partnership) — a flow-through entity whose income, gains, losses, and credits pass directly to investors.

economic indicators

Statistics classified as leading, coincident, or lagging based on whether they turn before, with, or after the broad economy.

EMMA

Electronic Municipal Market Access; the MSRB's official disclosure and trade-reporting system for munis.

ETF

Exchange-traded fund — a pooled, usually index-tracking product that trades intraday on an exchange at market prices, can be margined and sold short, and is generally tax-efficient.

ex-dividend date

The first day a stock trades without the right to the upcoming dividend; you must own the stock before this date to be paid.

FinCEN

Financial Crimes Enforcement Network, the U.S. Treasury bureau that administers the BSA and receives CTR and SAR filings.

FINRA Rule 3260

Rule requiring prior written customer authorization and account designation before exercising discretion over a non-institutional account.

FINRA Rule 4512

Rule governing customer account information, including the requirement to make reasonable efforts to obtain a trusted contact person.

flow-through

A tax structure in which the entity pays no tax and items of income and loss pass directly to the investors' personal returns.

Form CRS

Client Relationship Summary delivered to retail customers disclosing the relationship, services, fees, conflicts, and standard of conduct.

forward pricing

The rule that a mutual fund order is executed at the next NAV computed after the order is received, not at a prior published price.

Function 4

The Series 7 job function covering obtaining and verifying instructions and processing, completing, and confirming transactions, about 11 percent of scored questions.

GNMA

Government National Mortgage Association (Ginnie Mae); mortgage pass-throughs with full U.S. government backing.

go

General obligation bond; backed by the issuer's full faith, credit, and taxing power, usually requiring voter approval.

GTC

Good til canceled, an order that stays open until filled or canceled, though firms periodically purge such orders.

hedge-def

Using an option to offset the risk of another position, such as buying a put to protect long stock or buying a call to protect a short sale.

hypothecation agreement

Margin document in which the customer pledges securities as collateral for the margin loan.

intrinsic-def

The in-the-money amount of an option: $\max(\text{market} - \text{strike},\ 0)$ for a call and $\max(\text{strike} - \text{market},\ 0)$ for a put; never below zero.

issued

Shares that have been authorized and actually sold to investors at some point.

JTWROS

Joint Tenants With Right of Survivorship; at one owner's death, that interest passes automatically to the surviving owner(s).

lagging indicators

Economic statistics that change after the economy has already turned, such as corporate profits and the prime rate.

leading indicator

An economic statistic that changes before the broad economy does, such as the stock market or building permits.

limit order

An order that sets the maximum price to buy or minimum price to sell; it may never fill.

loan consent agreement

Optional margin document permitting the firm to lend the customer's securities to other parties.

long-term capital gain

A gain on an asset held more than 12 months, taxed at a preferential rate.

longcall-def

Buying a call; a bullish position with unlimited gain and loss limited to the premium paid.

longput-def

Buying a put; a bearish position with maximum gain of strike minus premium and loss limited to the premium.

longstrad-def

Buying both a call and a put at the same strike and expiration; profits when the stock moves sharply in either direction beyond the breakevens.

market order

An order to buy or sell immediately at the best available price; it is guaranteed to fill.

money-market

High-quality debt instruments maturing in one year or less, used for liquidity and capital preservation.

MSRB

Municipal Securities Rulemaking Board; writes rules for the municipal securities market.

muni-notes

Short-term municipal notes (e.g., TANs, RANs, BANs) issued in anticipation of future revenue, rated on the MIG scale.

municipal

Bonds issued by state and local governments; interest is generally exempt from federal income tax.

NAV

Net asset value — (total fund assets minus liabilities) divided by shares outstanding; the per-share value at which mutual fund shares are redeemed.

nominal

The fixed coupon (stated) interest rate of a bond, expressed as a percentage of par.

occ-def

The Options Clearing Corporation, the central counterparty that issues, guarantees, and settles all listed options.

odd-def

The Options Disclosure Document, OCC's booklet 'Characteristics and Risks of Standardized Options,' which must be delivered at or before options-account approval.

OFAC

Office of Foreign Assets Control; firms screen customers against its sanctions and Specially Designated Nationals lists.

open-end fund

A mutual fund that continuously issues and redeems an unlimited number of shares at net asset value; shares are not traded in the secondary market.

options account agreement

The OAA, which the customer must sign and return within 15 days of options account approval.

Options Disclosure Document

The ODD, a risk-disclosure booklet that must be delivered to a customer at or before options account approval.

outstanding

Issued shares minus treasury stock; the shares held by investors that vote and receive dividends.

pab

Private-activity bond; a muni whose interest may be subject to the alternative minimum tax.

par

The face value of a bond, standardly $1,000, repaid at maturity.

par-value

An arbitrary accounting value assigned to stock; for preferred it is the base ($100 typical) on which the fixed dividend is calculated.

participating-preferred

Preferred stock that can receive dividends above its stated rate when the company performs well.

passive loss

A loss from a passive activity such as a DPP that may offset only passive income, never wages or portfolio income.

phantom income

Taxable income from zeros, STRIPS, or TIPS that is taxed annually even though no cash is paid out.

POP

Public offering price — the price an investor pays for a mutual fund share, equal to NAV plus any front-end sales charge.

preemptive-right

A shareholder's right to buy enough new shares to maintain their proportional ownership when the company issues more stock.

preferred-stock

An equity security paying a fixed dividend, senior to common for dividends and liquidation but junior to all debt; usually non-voting.

premium-def

The price paid by the buyer and received by the writer for an option; equal to intrinsic value plus time value.

protput-def

Owning stock and buying a put as insurance against a decline; bullish with downside protection (also called a married put).

qdi

Qualified Dividend Income — dividends taxed at favorable long-term capital-gains rates when holding-period rules are met.

qualified-dividends

Dividends meeting IRS holding-period and source rules, taxed at the lower long-term capital-gains rate.

Reg BI

SEC Rule 15l-1, the Regulation Best Interest standard requiring firms to act in a retail customer's best interest when making a recommendation; four obligations are Care, Disclosure, Conflict-of-Interest, and Compliance.

regulated investment company

A fund qualifying under Subchapter M by distributing at least 90% of net investment income, allowing it to pass income to shareholders without fund-level tax (conduit/pipeline).

REIT

Real estate investment trust — a company that must distribute at least 90% of taxable income and meet 75% asset/income real-estate tests; it passes through income but not losses.

repo

Repurchase agreement; a short-term collateralized loan where securities are sold and repurchased at a set price.

revenue

A municipal bond backed only by the income of a specific project or facility.

right

A single subscription right; short-lived and issued in-the-money to current shareholders.

rights

Short-term instruments issued to existing shareholders allowing purchase of new shares below market price, honoring the preemptive right.

RMD

A required minimum distribution that must begin at age 73 under SECURE 2.0 from most tax-deferred retirement accounts.

Roth IRA

A retirement account funded with after-tax dollars that allows tax-free qualified withdrawals and has no RMD during the owner's life.

Rule 2090

FINRA's Know Your Customer rule requiring a firm to use reasonable diligence to know the essential facts about every customer and account.

SAR

Suspicious Activity Report filed confidentially for suspicious activity of $5,000 or more; the customer must not be notified.

sell stop

A stop order placed below the current market that activates as the price falls, often used to protect a long position.

senior-securities

Securities (bonds and preferred stock) that rank ahead of common stock for income and in liquidation.

separate account

The investment account, separate from the insurer's general account, that holds variable-annuity assets and bears investment risk borne by the contract owner.

settlement

The date ownership and payment are exchanged; regular-way is T+1 for stocks and most bonds since May 28, 2024.

shareholder

An equity owner of a corporation; common shareholders hold voting and residual ownership rights.

shortcall-def

Writing (selling) a call; a bearish/neutral position with gain limited to the premium and unlimited loss if uncovered.

shortput-def

Writing (selling) a put; a bullish/neutral position obligating the writer to buy stock at the strike if assigned.

sinking fund

Money an issuer sets aside over time to retire bonds, improving creditworthiness.

spread-def

A position combining a long and a short option of the same type (both calls or both puts) with different strikes or expirations.

statutory-voting

A voting method limiting votes per candidate to the number of shares owned; favors large/majority shareholders.

step-up in basis

The reset of an inherited security's cost basis to its fair market value on the decedent's date of death.

stock-dividend

A dividend paid in additional shares; not currently taxable but lowers per-share cost basis.

stop-limit

A stop order that, once triggered, becomes a limit order and may not fill if the price moves past the limit.

straddle-def

Simultaneously holding a call and a put on the same stock at the same strike and expiration; a bet on volatility.

STRIPS

Separate Trading of Registered Interest and Principal of Securities; Treasury zero-coupon securities.

subscription-price

The below-market price at which a rights holder may buy new shares during the offering.

t-bill

Treasury bill; a short-term Treasury security maturing in one year or less, issued at a discount with no coupon.

t-bond

Treasury bond; a Treasury security maturing in 10 to 30 years paying semiannual interest.

t-note

Treasury note; a Treasury security maturing in 2 to 10 years paying semiannual interest.

t+1

Regular-way settlement of trade date plus one business day, effective May 28, 2024, for stocks and most bonds.

tax-def

The federal income-tax treatment of option transactions, triggered at sale, expiration, or exercise rather than when the premium is paid.

tey

Tax-equivalent yield; the taxable yield equal to a muni's yield, computed as $\frac{\text{muni yield}}{1 - \text{tax bracket}}$.

TIC

Tenants in Common; a deceased owner's fractional share passes to that owner's estate and heirs rather than to co-owners.

time-def

The portion of an option's premium above intrinsic value, reflecting time remaining and volatility; equals premium minus intrinsic value.

TIN

Taxpayer Identification Number (often the Social Security number) required to open and identify a customer account.

TIPS

Treasury Inflation-Protected Securities; principal adjusts with the Consumer Price Index.

TRACE

FINRA's Trade Reporting and Compliance Engine for reporting corporate and agency debt trades.

Traditional IRA

A retirement account offering potential pretax contributions with taxable withdrawals and RMDs starting at age 73.

treasury

U.S. Treasury debt backed by the full faith and credit of the federal government; interest is federally taxable but state/local exempt.

treasury-stock

Previously issued shares repurchased by the company; they carry no vote and pay no dividend.

triple-tax-exempt

A municipal bond whose interest is exempt from federal, state, and local tax for in-state residents.

trusted contact person

An adult a customer authorizes the firm to contact about the account in cases of suspected exploitation, health issues, or to confirm contact information.

UGMA

Uniform Gifts to Minors Act custodial account; an irrevocable gift with one custodian for one minor, income taxed to the minor.

UIT

Unit investment trust — an investment company holding a fixed, unmanaged portfolio of securities with redeemable units and a set termination date.

UTMA

Uniform Transfers to Minors Act account; like UGMA but allows broader asset types and a later age of transfer to the minor.

variable annuity

An insurance/securities product (SEC-registered, prospectus required) whose value and payout vary with a separate account; earnings grow tax-deferred and are taxed as ordinary income on withdrawal.

warrant

A long-term instrument, often a bond/preferred sweetener, to buy stock at a fixed price set above market at issuance.

wash sale

An IRS rule disallowing a capital loss when a substantially identical security is bought within 30 days before or after the sale.

wash-sale

An IRS rule disallowing a loss if a substantially identical security is bought within 30 days before or after the sale.

yield ladder

The fixed ordering of nominal, current yield, YTM, and YTC based on whether a bond trades at a discount, par, or premium.

ytc

Yield to call; the annualized return if a callable bond is redeemed at its call date.

ytm

Yield to maturity; the total annualized return if a bond is held to maturity, including any discount or premium.

Free Series 7 Study Materials & Resources

Everything you need to pass the Series 7 is free here — no paywall, no sign-up. This guide is the foundation; pair it with the rest of our free Series 7 study materials for active recall, timed practice, and last-minute review:

• Series 7 Practice Exam — full-length, timed, FINRA-style questions with explanations.
• Series 7 Flashcards — active-recall decks for the high-yield facts.

Series 7 Study Guide FAQ

References

1. 1.FINRA. “Series 7 Content Outline (General Securities Representative Qualification Examination).” FINRA. ↑
2. 2.FINRA. “Series 7 – General Securities Representative Exam.” FINRA. ↑
3. 3.U.S. Securities and Exchange Commission. “Stocks (Investor.gov investing basics).” U.S. Securities and Exchange Commission. ↑
4. 4.U.S. Securities and Exchange Commission. “American Depositary Receipts — Investor Bulletin.” U.S. Securities and Exchange Commission. ↑
5. 5.Internal Revenue Service. “Topic No. 404, Dividends; Topic No. 409, Capital Gains and Losses.” Internal Revenue Service. ↑
6. 6.FINRA. “Series 7 Content Outline (2025).” FINRA. ↑
7. 7.SEC Investor.gov. “Bonds.” SEC Investor.gov. ↑
8. 8.SEC Investor.gov. “Zero Coupon Bonds.” SEC Investor.gov. ↑
9. 9.SEC Investor.gov. “Corporate Bonds.” SEC Investor.gov. ↑
10. 10.FINRA. “Accrued Interest Calculator.” FINRA. ↑
11. 11.U.S. Department of the Treasury (TreasuryDirect). “Treasury Securities (Bills, Notes, Bonds, TIPS, STRIPS).” U.S. Department of the Treasury (TreasuryDirect). ↑
12. 12.SEC Investor.gov. “Mortgage-Backed Securities.” SEC Investor.gov. ↑
13. 13.SEC Investor.gov. “Municipal Bonds.” SEC Investor.gov. ↑
14. 14.Municipal Securities Rulemaking Board. “About the MSRB and EMMA.” Municipal Securities Rulemaking Board. ↑
15. 15.SEC Investor.gov. “Money Market Funds and Instruments.” SEC Investor.gov. ↑
16. 16.U.S. Securities and Exchange Commission. “SEC Adopts Rule to Shorten Securities Settlement Cycle to T+1.” U.S. Securities and Exchange Commission. ↑
17. 17.U.S. Securities and Exchange Commission (Investor.gov). “Options.” U.S. Securities and Exchange Commission (Investor.gov). ↑
18. 18.The Options Clearing Corporation (OCC). “Characteristics and Risks of Standardized Options (Options Disclosure Document).” The Options Clearing Corporation (OCC). ↑
19. 19.U.S. Securities and Exchange Commission (Investor.gov). “Topic No. 427, Stock Options / Investor Bulletin on Options.” U.S. Securities and Exchange Commission (Investor.gov). ↑
20. 20.OCC / The Options Industry Council. “Options Spreads and Strategies — Investor Education.” OCC / The Options Industry Council. ↑
21. 21.The Options Clearing Corporation (OCC). “About OCC — Listed Options Clearing.” The Options Clearing Corporation (OCC). ↑
22. 22.Internal Revenue Service (IRS). “Publication 550: Investment Income and Expenses.” Internal Revenue Service (IRS). ↑
23. 23.Internal Revenue Service (IRS). “Publication 550 — Puts and Calls (Cost Basis on Exercise).” Internal Revenue Service (IRS). ↑
24. 24.U.S. Securities and Exchange Commission. “Mutual Funds and Forward Pricing (Rule 22c-1).” U.S. Securities and Exchange Commission. ↑
25. 25.FINRA. “FINRA Rule 2341 — Investment Company Securities (sales charges).” FINRA. ↑
26. 26.U.S. Internal Revenue Service. “Subchapter M — Regulated Investment Companies (26 U.S.C. §§ 851–855).” U.S. Internal Revenue Service. ↑
27. 27.U.S. Securities and Exchange Commission (Investor.gov). “Exchange-Traded Funds (ETFs).” U.S. Securities and Exchange Commission (Investor.gov). ↑
28. 28.U.S. Securities and Exchange Commission. “Variable Annuities: What You Should Know.” U.S. Securities and Exchange Commission. ↑
29. 29.U.S. Securities and Exchange Commission (Investor.gov). “Real Estate Investment Trusts (REITs).” U.S. Securities and Exchange Commission (Investor.gov). ↑
30. 30.U.S. Securities and Exchange Commission. “Regulation Best Interest (Reg BI) — Rule 15l-1.” U.S. Securities and Exchange Commission. ↑
31. 31.U.S. Securities and Exchange Commission. “Form CRS Relationship Summary.” U.S. Securities and Exchange Commission. ↑
32. 32.FINRA. “Anti-Money Laundering (AML) Program.” FINRA. ↑
33. 33.FINRA. “Rule 4512. Customer Account Information.” FINRA. ↑
34. 34.Financial Crimes Enforcement Network (FinCEN). “BSA Requirements — Currency Transaction Reports and Suspicious Activity Reports.” Financial Crimes Enforcement Network (FinCEN). ↑
35. 35.FINRA. “Rule 3260. Discretionary Accounts.” FINRA. ↑
36. 36.FINRA. “Rule 2111. Suitability.” FINRA. ↑
37. 37.U.S. Securities and Exchange Commission. “Trade Orders: Market, Limit, Stop and Other Order Types (Investor Bulletin).” U.S. Securities and Exchange Commission. ↑
38. 38.U.S. Securities and Exchange Commission. “Ex-Dividend Dates: When Are You Entitled to Stock and Cash Dividends.” U.S. Securities and Exchange Commission. ↑
39. 39.Municipal Securities Rulemaking Board. “MSRB Rule G-12: Uniform Practice (settlement and accrued interest).” Municipal Securities Rulemaking Board. ↑
40. 40.U.S. Securities and Exchange Commission / Investor.gov. “Conference Board Leading Economic Index and indicator classifications.” U.S. Securities and Exchange Commission / Investor.gov. ↑
41. 41.Internal Revenue Service. “Topic No. 409, Capital Gains and Losses; Publication 550, Wash Sales and Basis.” Internal Revenue Service. ↑
42. 42.FINRA. “Series 7 Exam Information and Test-Taking Guidance.” FINRA. ↑
43. 43.Internal Revenue Service. “Tax Exempt Bonds: Tax Treatment of Municipal Securities Interest.” Internal Revenue Service. ↑
44. 44.Internal Revenue Service. “401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500.” Internal Revenue Service. ↑
45. 45.Internal Revenue Service. “Retirement Plan and IRA Required Minimum Distributions FAQs.” Internal Revenue Service. ↑

Sources for the concept answers

Every answer in the Series 7 concept questions above is drawn from an official primary source:

1. U.S. Securities and Exchange Commission. “Investor.gov — Margin Account.” Investor.gov, accessed 18 June 2026.
2. Internal Revenue Service. “Roth IRAs.” irs.gov, accessed 18 June 2026.

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