FINRA Series 7 Chapter 1 2025/2026
Exam Questions with 100% Correct
Answers | Latest Update
What is a security? - 🧠 ANSWER ✔✔It is an investment that represents either an
ownership stake or a debt stake in a company.
Stock - 🧠 ANSWER ✔✔Represents equity or ownership in a common, and bonds
are a loan to a company.
Balance Sheet - 🧠 ANSWER ✔✔Summarizes the company's
-assets; what the company owns
-liabilities; what the company owes
-equity; the excess of the value of assets over the value of liabilities.
, Net Worth - 🧠 ANSWER ✔✔A company's net worth is computed by subtracting
all liabilities from the value of total assets. Assets - Liabilities = Net Worth
Issuance of Stock - 🧠 ANSWER ✔✔A company issues stock as its primary means
of raising business capital. The investor who buys the stock owns a share in the
company's net worth. Each share entitles the owner to a portion of the company's
profits and dividends.
Common Stock - 🧠 ANSWER ✔✔Can be classified by the common owner or
investor in a corp. It can be classified as authorized, issued, outstanding, and
treasury.
Preferred Stock - 🧠 ANSWER ✔✔It represents equity ownership in the
corporation, but it doesn't have the same voting rights or appreciation potential as
common stock. Pays a fixed dividend semiannual, and it has priority claims over
common stock.
Authorized Stock - 🧠 ANSWER ✔✔the specific numbers of shares the company
has authorized to issue or sell.
Issued Stock - 🧠 ANSWER ✔✔has been authorized and distributed to investors.
Exam Questions with 100% Correct
Answers | Latest Update
What is a security? - 🧠 ANSWER ✔✔It is an investment that represents either an
ownership stake or a debt stake in a company.
Stock - 🧠 ANSWER ✔✔Represents equity or ownership in a common, and bonds
are a loan to a company.
Balance Sheet - 🧠 ANSWER ✔✔Summarizes the company's
-assets; what the company owns
-liabilities; what the company owes
-equity; the excess of the value of assets over the value of liabilities.
, Net Worth - 🧠 ANSWER ✔✔A company's net worth is computed by subtracting
all liabilities from the value of total assets. Assets - Liabilities = Net Worth
Issuance of Stock - 🧠 ANSWER ✔✔A company issues stock as its primary means
of raising business capital. The investor who buys the stock owns a share in the
company's net worth. Each share entitles the owner to a portion of the company's
profits and dividends.
Common Stock - 🧠 ANSWER ✔✔Can be classified by the common owner or
investor in a corp. It can be classified as authorized, issued, outstanding, and
treasury.
Preferred Stock - 🧠 ANSWER ✔✔It represents equity ownership in the
corporation, but it doesn't have the same voting rights or appreciation potential as
common stock. Pays a fixed dividend semiannual, and it has priority claims over
common stock.
Authorized Stock - 🧠 ANSWER ✔✔the specific numbers of shares the company
has authorized to issue or sell.
Issued Stock - 🧠 ANSWER ✔✔has been authorized and distributed to investors.
