10 Series 7 Exam Traps to Avoid - dummies

By Steven M. Rice

Getting tripped up by some trivial exam traps after all the time, effort, and sacrifice you put into studying for the Series 7 exam would be a shame. Here are some common mistakes and last-minute advice to help you over the last hurdles that stand between you and your first million dollars as a stockbroker.

Easing up on the studying

Perhaps you stop studying because you’re getting good scores on practice exams and your confidence is high. If you’re scoring 80s on exams that you’re seeing for the first time, shoot for 85s. If you’re getting 85s, shoot for 90s. The point is that you should continue to take exams until the day before your scheduled exam day. Every day away from studying ultimately costs you points on your exam that you can’t afford to lose.

By the same token, make sure you don’t wait too long before taking the exam. If you have to wait several weeks before you can take the exam, you lose your sense of urgency, and it’s almost impossible to keep up the intense level of preparation needed for many months at a time.

If you’re taking a prep course before you schedule your Series 7, follow your instructor’s advice as to when you should take the exam. If you’re directing your own course of study, after you’re passing practice exams consistently with 80s or better, take the test as soon as possible. The longer you wait to take the exam, the more likely you are to forget the key points and complex formulas. Overall, losing your sense of urgency leads to complacency and a lack of motivation, which probably aren’t skills broker-dealers are looking for in their employees.

Assuming the question’s intent

You glance at the question quickly and incorrectly anticipate what the exam question is really asking you. You pick the wrong answer because you were in such a rush, you didn’t see the word except at the end of the question. What a shame.

You don’t want to fail the exam when you really know the material. Read each question carefully and look for tricky words like except, not, and unless. Then read all the answer choices before making your selection.

Reading into the question

You’re thinking but what if before you even look at the answer choices. The bottom line is that you shouldn’t add anything to the question that isn’t there. Don’t be afraid to read the question at face value and select the right answer, even if it occasionally seems too easy. Eliminate answer choices that are too much of a stretch, and remember that when two answer choices are opposites, one of them is most likely correct.

Becoming distracted when others finish

Don’t let people who are taking the exam with you psych you out. If others finish ahead of you, perhaps they’re members of Mensa or maybe this is the fifth time they’ve taken the exam — practice makes perfect. They may even be taking a totally different exam. Besides the Series 7, the testing centers also offer other securities exams with fewer questions (a 65-question Series 63 exam, a 100-question Series 66 exam, a 130-question Series 65 exam, and so on).

Keep focused and centered on taking your own exam. The only time you need to be concerned with is your own — whether you’re on track.

Not dressing for comfort

Dress comfortably. Don’t wear a tie that’s so tight it cuts off the circulation to your brain. You’re under enough stress just taking the exam. Dress in layers. A T-shirt, a sweatshirt, and a jacket are great insulation against the cold. Another advantage is that you can shed layers of clothing (without ending up sitting in your underwear) if the exam room is too warm.

Forgetting to breathe

You walk into the test center brimming with confidence. All of a sudden the exam begins and some of the words look like they’re in a foreign language. Your heart starts pounding, and you feel like you’re going to pass out.

If stress becomes overwhelming, your breathing can become shallow and ineffective, which only adds to your stress level. Focus yourself before the exam by closing your eyes and taking a few deep breaths. This same process of closing your eyes and breathing deeply is a great way to calm yourself if you become stressed or anxious at any time during the exam.

Trying to work out equations in your head instead of writing them down

Memorize your equations while you’re studying for your Series 7 exam so you know them cold before you arrive at the test site. If your nerves are getting the best of you and clouding your memory, jotting down the more difficult equations that you want to remember as soon as you receive permission to start the exam may be helpful (this process is known as a brain dump).

When working out complicated math problems, you have six pieces of scrap paper to work with (and a basic calculator). Use them. For example, some formulas, such as those for determining the debt service coverage ratio or the value of a right (cum rights), require you to find sums and differences before you can divide. Even simple calculations, such as finding averages, can involve quite a few numbers.

In problems with multiple parts, it’s easy for you to accidentally skip steps, plug in the wrong numbers from the question, or forget values that you calculated along the way. Writing things out helps you keep things in place without cluttering your short-term memory.

Spending too much time on one question

All questions have the same point value. If you spend too much time on one question, you may lose points for many questions you didn’t have time to even look at because you wasted so much time on the one that gave you trouble. If you find yourself taking too long to answer a question, take your best guess, mark it for review, and return to it later.

Changing your answers for the wrong reasons

You’ve probably been told from the time you first started primary school not to change your answers. Trust your instincts and go with your original reaction. You have only two good reasons to change your answer:

  • You find that you initially forgot or didn’t see the words not or except and you initially chose the wrong answer because you didn’t see the tricky word.

  • You find that the answer choice you originally selected is not the best answer after all.

Calculating your final score prematurely

You waste valuable time concentrating on the number of questions you think you got wrong instead of focusing on the Series 7 exam questions you still have to answer.

Just read each question carefully, scrutinize the answer choices, and select the best answer. You’ll find out whether you passed right after you complete the exam; it’s not like you need to figure out your possible grade in advance to avoid sleepless nights until you receive your score. If you have additional time, use it to check your answers to the questions you marked for review.