American Investment Training

Saturday, January 30, 2016

How to Pass The Series 7 Licensing Test

How to pass the Series 7 exam? A question we get very often as trainers and study material developers.

The Series 7 is not an easy exam but it is very pass-able if you use the right material and use correct study techniques. A huge key to passing the series 7 is working with enough practice questions and tough test questions. Most people fail the test because they did not really challenge themselves in working with hard enough exam questions when preparing.

Enough Practice Tests to Pass

You don't want the actual exam to be much harder or any harder than the study questions you were practicing. To pass the series 7, you simply need to be battle hardened with accurate and plentiful series 7 test questions.

The real test is 250 questions. Is using a study program with 500 practice questions enough? 1000 questions? In my opinion - NO. You want 5 or 10 times that. More scenarios the better.

As you study for the Series 7, Series 6 or almost any securities licensing test - it is crucial to work with MORE than enough exams. Memorizing repetitive test questions may give you good final exam practice scores, but it will not give you the readiness or confidence to
pass the Series 7.

Software Test Exams

Working Series 7 questions from your computer will prepare you well as long as the amount of questions is there and the degree of difficulty is strong. The actual Series 7 is given on computer so drilling yourself with computer based training questions is a great way to prepare.

American Investment Training has a regularly updated 7000 question hard drill CD for the Series 7.

Series 7 Answer Explanations

Accurate and detailed answer explanations to your practice questions is a VERY important aspect of studying and passing the series 7. When you get a question wrong (or even if you guessed it right), you want to see the correct answer explanation clearly written out.

Study Tip To Passing

A great study tip and technique is to write out the answer explanations on exam questions you got wrong. This reinforces the concept and will limit you from getting that question wrong again or even a similar question.

Series 7 Subjects

The Series 7 is weighted heavier on certain topics so you want to prepare for the exam with strong emphasis on these more important areas. These areas include debt (bonds), Options, Rules and Customer Accounts. You will definitely want a large software program that will have more than enough practice questions on these important topics to pass the Series 7.


Good Luck on your test and your career!

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Begin a career as a financial adviser, stockbroker or other investment related field. Investment or financial advisers can earn an unlimited income during their career. Start a job that can change your life and be a successful stockbroker or financial planner.

Finance Jobs available for trainees. Most firms will hire inexperienced people and train them from within. Getting some licensing done before you apply can be helpful. Stockbrokers and investment advisers can make an unlimited income. High payout, work environment and investment product available should be some of the factors to consider before joining a brokerage firm.

Independent Stockbroker

Some of you may want to work as an independent broker or in-home stockbroker. These opportunities are available and best suited for producing stockbrokers, CPA's, mortgage brokers or other financial professionals with existing clients. These jobs do not pay a salary. You are independent adviser contractors of a brokerage firm when you do this. Higher payout and freedom to run your business are the benefits.

Broker, Agent and Adviser Jobs (New York and other)

We have several key job and career openings available through the firms we represent. These jobs are for Stockbroker producers, Financial advisers, investment brokers and insurance agents and brokers. Our companies are national firms and many offer salary plus benefits. These career opportunities are national with the majority of broker offices in New York, Long Island, New Jersey, Connecticut, Massachusetts and more.

Insurance Brokers Agents

We connect you to the top 3 insurance brokerage product providers in the country. We will contact you first - confidentially. American Investment Training has been setting up independent brokers and BGA GA Insurance introductions for 10 years. There is no fee or obligation. We work for our firms.

Agents who sell annuities, life policies and other product are welcome to see how we can help.
Series 7 Sponsorship and Series 24 Sponsorship is available to qualified people with a plan for their insurance agent success as an independent or working at an office.

Current licensed brokers and groups who want to become independent broker representatives are welcome.
Payout - Independent Brokers and Agents looking for higher product payout without changing their brokerage agency can also be helped by us. We can introduce you to the top brokerage product people. Includes Fixed Annuity Payout and Variable Annuity payout and commissions.

Wednesday, January 27, 2016

Technical Analysis - Support and Resistance Levels Study Tips

There are 2 types of Analysis to examine for the exam and in the investing world in general. These are the 2 you need to study and know.

The 2 types are:


This post will focus on the Technical Part.

Basically, examining the price trends of a stock or security is the technical side. The main part of an analyst's job is to recommend the buying or selling of a stock based on it's technical trends. The Analyst will look heavily at what are called Support and Resistance Levels. These are in effect the high and low of the price.

These levels are charted based on time and price. For instance, if we chart DFT Stock for the last 52 weeks and see that it has a low of $32 and a high of $44, then the analysis would "peg" the support level at $32 and the resistance at $44.

What is the Support Level

The rule of recommendation is normally HITTING (reaching) a SUPPORT LEVEL IS BULLISH. This follows the basic rule of "buy low - sell high". Just remember the support is the bottom - or floor. Think of it as supporting you. In this example, with DFT trading down to 32 but not falling below it would be BULLISH.  However falling through a Support is considered Bearish. This is not 100% for everyone - but as a rule of thumb and certainly for the Series 7 - breaking through a support level is indeed BEARISH.

What is the Resistance Level

A resistance level is just the opposite of support. It is the high price the stock has reached - either historically or a specific time frame the technical analyst is watching. Under the Buy Low Sell High rule and the fact that the Resistance Level is the high price, HITTING A RESISTANCE LEVEL IS BEARISH. If the stock has shown that when it reaches it's high or resistance it trades back within it's trading range, it would make sense that a SELL recommendation would be made.

Breaking through a resistance price or level has the opposite effect. Going beyond a resistance is considered Bullish since going above a historical high pretty much throws the old resistance out the window and new levels will be set.

The fundamental side of analysis deals with the money end and financials of the company itself. Balance Sheets, Income Statements, Net Worth etc. Fundamental - think FUNDS $. There are some formulas to know for the Series 7. That will be laid out in a separate post.

As always, feel free to post a question.

Full Series 7 Outline with Pass Fail Information

The SERIES 7 is 250 question stockbroker license test</a> that licenses you to act as a Registered Representative. Persons who receive this license are accredited to sell most securities. These securities would include: Stock, Bonds, Options, Mutual Funds and Annuities. The license itself is active while you are practicing it. Practicing with a SERIES 7 means that you are either employed or affiliated and sponsored with a member firm. If you leave the business, your license will still remain active for 2 years after your last day with the firm. If you do not re-enter the business within 2 years, your license will expire. You would then have to re-take the exam again. If you had your SERIES 7 at one time in the past and are unsure if it is still active, you can go to the FINRA web site and look yourself up. This method can be used for all securities licensed through the FINRA. This feature is predominately used for customers who wish to look up a broker’s history and see if there are any complaints on them. So, yes your customers can look you up also.

The SERIES 7 exam itself is comprised of many topics although not equally divided. The passing grade is 72%.

Up to 50 questions could be on Municipal Bonds alone. Other major topics include
Options, Industry Rules and Customer Account handling.

The total breakdown of the exam  and topic license information is as follows:

EQUITY SECURITIES (Common Stock, Preferred Stock)
OPTIONS (Stock, Index, Foreign Currency)
BONDS (Municipal, US Government Securities and Agencies, Corporate Bonds)
INVESTMENT COMPANIES (Mutual Funds, Closed End Funds, Annuities)
TRADING MARKETS (Stock Exchanges, NASDAQ, Orders)
NEW ISSUES (Securities Acts, Registration Rules, Exempt Securities)
TAXES AND TAX SHELTERS (Limited Partnerships, Capital Gains/Loss, Cost Basis)
CUSTOMER ACCOUNTS (Ticket Processing, Margin And Cash Accounts, Joint Accounts)
ANALYSIS (Balance Sheet, Technical Trends and Charting, Economic Analysis)
INDUSTRY RULES (FINRA And SEC Rules, Rules of Fair Practice)

The exact number of questions in each topic varies, though not greatly. For instance, you will get approximately 30-40 questions on Options but only 5-10 questions on Margin. If you know your Bonds, Rules and Options, you are on your way to passing the exam.

The SERIES 7 is a multiple choice test graded on 250 questions administered on computer by a FINRA testing vendor (Technology Center). 72% is needed to pass the SERIES 7 Exam. You will be given 6 hours to complete the exam in two 3 hour parts. Each question is worth .4 of a point.  Each part also includes 5 experimental questions, which do not count on your total score. You will not know which ones
are the experimental questions. Each exam is different, meaning if you take your test next to someone else, your test will not be the same. The percentages will be the same but the questions that each individual is tested on will be random. This applies to all Licensing exams but the difference between tests is less with smaller content exams like the SERIES 63 that is only 60 questions. You should practice with as many Practice Questions as you can.

Series 7 Study Information

Studying and preparing for the exam will vary depending on the time you can dedicate to it. Home study courses given by American Investment Training for Series 7 Training and recommend a plan of 6-8 weeks consisting of 2 hours daily. The course will cover each subject in depth and give you plenty of chapter questions and answers. There will also be several final exams that simulate the actual test content and you might want to use a computer testing program as well. A computer testing program can give you good visual studying because the real exam will be very similar to the computer testing program. The SERIES 7 spreads out the different subjects throughout the test.

You will be given a calculator to use at the center. Applicants are not permitted to bring their own. Scrap paper will be given to you as well for you to use during the test. Once the test officially starts you can write down anything you want (Formulas, Rules etc.). The computer also offers the student the ability to change their answers at the end of the first or second part of the test. Meaning, if you wish to change an answer to a question in the first half, you will have to wait until the end of the first half to do it. Once the second half starts, you will be unable to view your first half. Basically, you are taking 2 different 125 question exams. Even if you are
unsure what the correct answer to a question is, you must enter something before the next question is shown.

License Exam Grade Information

Your grade is given immediately on your screen at the conclusion of the test and a print out will be given to you. Your sponsoring Firm will receive a copy as well. The national first time passing rate for the SERIES 7 is around 60% but if you use a top training company, the rate is more like 80%. Now, we don’t like to think about anything negative but if you do fail the test, you will have to wait 30 days to re-take it. Should you fail the test 3 times, and then there is a mandatory 6 month wait for re-applying. As long as you study consistently and pass your practice exams, you should pass your exam on the first try.



Corporate Bond Yield and Debt Securities Interest Rates

The coupon rate on a bond is also known as the nominal yield. The interest payments investors get from their bond investments come from the this yield. This bond interest yield is the rate the issuer pays to par value (amount of bonds owned). It is fixed and never changes during the life of the investment.
The nominal yield is not always your overall rate of return on a security - it usually is not. When someone buys a bond at a premium, their total rate of return will be lower than the coupon rate. Since the interest is only paid to par, the premium (amount above par) is lost over the life of the security. This will give the investor a lower yield to maturity.

Bonds bought at a discount will have a higher YTM, compared to it's nominal.

Call - Callable

Bonds with higher coupon rates also get called first, since their interest rate is higher than the market. When issuers examine their fixed income debt securities, the true interest cost to them regardless of price is the coupon rate. That is why the higher nominal yield issues will see a call first.

The yield to call is also usually lower with higher coupon issues since those are normally bought at a premium and many bonds are called at par or slightly over par. If the call price (the price it costs the issuer to redeem) is lower than the price paid by the investor, the yield to call is lower. If a nominal yield is low, the YTC may not be lower but lower coupon securities are not called as often so the higher yield to call is many times at best hypothetical given the lower interest rate.

Higher bond coupon rates will provide more current income to the investor, so as far as income - higher is better. As far as yield, it is not always better to chase the highest nominal coupon.

Tuesday, January 19, 2016

Independent Broker Opportunities - Licensed or unlicensed

There is a great resource for independent brokerage firm research. The link is below. You can search the area, growth and earnings of the firm and where they rank. Average payouts are also listed.

Whether you are Series 7 licensed or a Registered Investment Adviser (Series 65), this is a link you should keep.

Investment Adviser Training:

Pass the Series 65 Exam HERE

Full course, exams and more. Highest pass rate.

A licensed Series 65 adviser has many more career choices than an unlicensed person. 

NO Sponsorship required 

Saturday, January 9, 2016

Understanding Bond Yields - Yield to maturity, nominal and current yld

The concept behind bond yields is important on the Series 7 exam, as well as for investors and people who are looking to become brokers.

There are 3 primary yields on a bond. They are:

Nominal Yield (Coupon Rate)
Current Yield
Yield To Maturity (YTM)
Yield To Call - If a bond is callable

Nominal Yield 

This is the stated rate on the bond itself. When an issuer puts out a bond, whether it is a corporate bond, municipal or Government bond  - it will have a stated coupon rate that is payable to par.

Example: A corporate bond bought at a par value of $10,000. The paying interest rate (nominal yield) is 5%. Regardless of the future price of this bond in the secondary market (after is traded through it's life), the bond will pay 5% to $10,000 each year. This is usually in semi annual payments. If a year later, this same bond is bought at a price of $103, meaning $10,300 (the $300 is the premium), the interest actually paid does not change. Thus, the nominal yield is fixed and never changes - regardless of price, maturity or amount of bonds held. 

Current Yield

This is the least important indicator of the 3 main main yields. Current yld is calculated (which you will likely be asked on the Series 7 Test) by dividing the annual income or coupon rate by the current price of the bond. Since a bond's price fluctuates in price throughout it's life - the current yield is always changing and so a bond should never be presented on merit by it's current rate of return. The CL is more important on a stock, since a stock does not have a guaranteed rate of return and guarantee on the principal like a bond has.

Yield To Maturity

The most important and accurate rate of return or yield on a bond is the yield to maturity - especially if it is a non callable bond. The YTM factors in the nominal rate and current yield combined. Since the coupon rate is only paid to par, if a bond is bought at a premium, the yield to maturity will be lower than the nominal yield. All bonds pay to par only and mature to par. So, if a bond at a premium is held to maturity, the premium is essentially lost. This is all factored into the price. On the reverse, discount bonds will have a higher yield to maturity than the stated nominal rate. Again, since all bonds pay to and mature to par, the discount amount is money gained during the life of the bond - so your overall yield is even better than the stated coupon.

Yield To Call

If a bond is callable, the yield to call basically acts as an early maturity. So the same concept of yield to maturity is applied to the YTC. The difference is the call date may never happen. It is the issuers choice whether to call a security. The issuer is obligated to return the par value at maturity, thus the yield to maturity is a guarantee if it goes to the end.

Know your bond yields on the series 7. Hopefully this helps you with the basic understanding.

American Investment Training