semplr.

Exams · Certifications · Licensing

FINRA Series 7 General Securities Representative Exam

3. Provides Information, Makes Recommendations, Transfers Assets / Offerings: practice questions

Our FINRA Series 7 bank has 12 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

Start the free mock exam

Question 1

Under Regulation A, the maximum amount a Tier 2 issuer may raise in 12 months is:

  1. $5 million
  2. $75 million
  3. $20 million
  4. $50 million
Show the answer

B. $75 million — Tier 1 offerings are capped at $20 million and Tier 2 at $75 million in a 12-month period.

Question 2

Which offering is exempt from SEC registration under the Securities Act of 1933?

  1. An intrastate offering under Rule 147A
  2. A registered offering of corporate debentures
  3. A public offering of a listed company's common stock
  4. A follow-on offering of a closed-end fund
Show the answer

A. An intrastate offering under Rule 147A — Rule 147 and 147A exempt offerings made mainly to residents of one state; municipal and government securities are also exempt securities.

Question 3

Rule 144A permits resales of restricted securities to:

  1. Any accredited individual investor
  2. Foreign individuals only
  3. Qualified institutional buyers
  4. Retail investors after six months
Show the answer

C. Qualified institutional buyers — Rule 144A provides a safe harbor for resales to QIBs, generally institutions owning and investing at least $100 million in securities.

Question 4

Under Regulation D, an individual is an accredited investor based on income if income exceeded:

  1. $250,000 in the last year only, or $500,000 with a spouse
  2. $1 million in any one year in the past five years
  3. $200,000 in each of the last two years, or $300,000 with a spouse
  4. $100,000 in each of the last two years, or $150,000 with a spouse
Show the answer

C. $200,000 in each of the last two years, or $300,000 with a spouse — Rule 501(a) uses $200,000 individual or $300,000 joint income for the two most recent years, with an expectation of the same in the current year.

Question 5

Under Regulation Crowdfunding, an issuer may raise in a 12-month period up to:

  1. $75 million
  2. $1 million
  3. $20 million
  4. $5 million
Show the answer

D. $5 million — The Regulation CF limit is $5 million in 12 months, through a registered funding portal or broker-dealer.

More FINRA Series 7 topics