Series 7 Practice Questions with
Correct Answers
Which of the following statements regarding the privacy notice of a broker-dealer is
NOT TRUE?
a. customers must receive an updates privacy notice annually
b. a privacy notice does not need to be sent to a customer
c. a privacy notice must be provided to all customers at the time a relationship is
established with the firm
d. clients may opt out from having their information shared with third parties -
ANSWER✔✔-b
customers must receive a privacy notice
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,a consumer must be provided with on prior to disclosing any info to a nonaffiliated 3rd
party
Which of the following documents is NOT needed to open a corporate margin account?
a. a corporate charter and resolution
b. a new account form
c. an hypothecation agreement
d. a trust agreement - ANSWER✔✔-d
a trust agreement is needed when opening an account for a retirement plan or trust
account
Exclusion from the definition of an investment adviser are given to all of the following
groups except
a. accountants and lawyers who provide advice in a manner incidental to their
profession
b. publishers
c. broker-dealer and their representatives
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,d. advisers who limit advice to corporate debt only - ANSWER✔✔-d
The Investment Advisers Act of 1940 excludes a, b, and c
A registered representative should update a customer's account records for a change in
I. address
II. net worth
III. employer
IV. investment objectives - ANSWER✔✔-d. I, II, III, and IV
customer account records should be updated whenever there is a change to the original
information given
A RR would NOT need to notify his employer to open an account at another member
firm if he effects transactions in which of the following securities?
a. investment-grade, nonconvertible bonds
b. an actively managed emerging markets mutual fund
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, c. an exchange-traded funds (ETF) that is indexed to the S&P 500
d. a real estate investment trust listed on the NYSE - ANSWER✔✔-b
an exception is made if the employee effects transactions only in mutual funds, unit
investment trusts, and variable annuities
under industry rules, the final approval to open a new account is given by a(n):
a. RR
b. operations manager
c. partner or principal
d. supervisor - ANSWER✔✔-c
not every supervisor is a principal and only a principal can approve a customer account
According to AML procedures which two of the following items is a member firm
required to obtain when opening a new account for a non-U.S. citizen?
I. Name of current employer
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Correct Answers
Which of the following statements regarding the privacy notice of a broker-dealer is
NOT TRUE?
a. customers must receive an updates privacy notice annually
b. a privacy notice does not need to be sent to a customer
c. a privacy notice must be provided to all customers at the time a relationship is
established with the firm
d. clients may opt out from having their information shared with third parties -
ANSWER✔✔-b
customers must receive a privacy notice
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,a consumer must be provided with on prior to disclosing any info to a nonaffiliated 3rd
party
Which of the following documents is NOT needed to open a corporate margin account?
a. a corporate charter and resolution
b. a new account form
c. an hypothecation agreement
d. a trust agreement - ANSWER✔✔-d
a trust agreement is needed when opening an account for a retirement plan or trust
account
Exclusion from the definition of an investment adviser are given to all of the following
groups except
a. accountants and lawyers who provide advice in a manner incidental to their
profession
b. publishers
c. broker-dealer and their representatives
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
,d. advisers who limit advice to corporate debt only - ANSWER✔✔-d
The Investment Advisers Act of 1940 excludes a, b, and c
A registered representative should update a customer's account records for a change in
I. address
II. net worth
III. employer
IV. investment objectives - ANSWER✔✔-d. I, II, III, and IV
customer account records should be updated whenever there is a change to the original
information given
A RR would NOT need to notify his employer to open an account at another member
firm if he effects transactions in which of the following securities?
a. investment-grade, nonconvertible bonds
b. an actively managed emerging markets mutual fund
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, c. an exchange-traded funds (ETF) that is indexed to the S&P 500
d. a real estate investment trust listed on the NYSE - ANSWER✔✔-b
an exception is made if the employee effects transactions only in mutual funds, unit
investment trusts, and variable annuities
under industry rules, the final approval to open a new account is given by a(n):
a. RR
b. operations manager
c. partner or principal
d. supervisor - ANSWER✔✔-c
not every supervisor is a principal and only a principal can approve a customer account
According to AML procedures which two of the following items is a member firm
required to obtain when opening a new account for a non-U.S. citizen?
I. Name of current employer
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
