Taking Stock of My Options

August 24, 2007 9:45 PM

Can anyone recommend a good study/review guide for the math-related aspects of the Series 7 (General Securities Representative) Exam?

I'm going to be taking a "math aptitude test" based on the Series 7 next week, and I wasn't really given any sort of guidance with regard to prepping for it.

posted by Poolio to Education (6 answers total)

Best answer: for the actual 7, i didn't really feel like there was much math. certainly not enough to warrant an entire study guide just for the math. options problems (once you understand what they're asking) are generally simple addition and subtraction. i would become familar with calculating percentage changes (an increase of x%; formula a/b-1 where b is the original observation and a is the final observation) and basic problem solving for variables. and you will have to learn some statistics, but that will be taught fairly extensively (for the maybe 1 question you'll see on Standard Deviation or Sharpe Ratio). you'll need to calculate bond yields (coupon rate, current yield) which are percentages also. compound interest will show up.

for a math aptitude test, expect to get junior high level math coupled with more difficult problem solving ability. it should not be difficult. if its for UBS where I started, the test has very little relevance to the 7 - especially since we weren't allowed calculators, which ARE allowed on the 7, thankfully.

you get the sense while you're taking these aptitude tests (math, personality, salesmanship skills) that they're really designed more to weed out the grossly underqualified then to only allow the elite. maybe if you're interviewing for a analyst or trader position they may challenge you more, but if you're interviewing to be a Registered Rep I think you'll be fine.

email if you have any more questions. i did great on the seven, but was a crap broker.
posted by uaudio at 10:52 PM on August 24, 2007 [1 favorite]

Response by poster: Thanks a lot, uaudio... that's really helpful info.

The test was described as having been created in consultation with psychologists to help determine whether candidates for trader/analyst positions will be able to pass the Series 7 (after months of training/studying)... whatever that means.

I'm not really concerned with my ability to pass the Series 7... I know some pretty dim bulbs who've done so. [Not to diminish your achievement.] :)
posted by Poolio at 11:05 PM on August 24, 2007

Poolio, not to thread-jack, but can you share what training materials you've used to prep for the test (not just the math portions)? Similar question for the Series 6, if you've done that, as well.
posted by NotMyselfRightNow at 5:28 AM on August 25, 2007

Goto stcusa.com NotMyselfRightNow. All the material you need is there.

Poolio, the mention of "months of training/studying" for the 7 is really, really ridiculous. If you put in 20 hours a week, you should have it mastered in 3 weeks. The hardest part isn't the material itself; it's retention. You can read through the material pretty easily and have a pretty good understanding of what's going on, but since there is so much minutia, trying to memorize it all gets tricky.

Be forewarned, though. Just because there isn't any explicit math on the test, that doesn't mean that there aren't math questions. Aside from options, being able to understand YTM versus current yield when a bond is trading at a premium or a discount is not common sense. That takes some time to fully comprehend mathematically. Same goes with understanding after tax yield on corporates versus munis. Now, none of this is *hard*, but it requires you to understand more than one concept at a time.
posted by SeizeTheDay at 6:02 AM on August 25, 2007 [1 favorite]

Response by poster: SeizeTheDay... the firm I'm taking this aptitude test at (Merrill Lynch) has a training program that preps you for the Series 7, among other things. I'd be operating on their time frame, and not my own.

NotMyselfRightNow... I haven't started studying for any of the tests yet.
posted by Poolio at 6:24 AM on August 25, 2007

I am looking for a heads up on the FORMULA's used for the Options questions on the Series 7 test. I was told if you can memorize these formulas & write them on stratch paper @ the test site, then it makes an easy reference point as you go thru the test...Help!
posted by chlard at 9:03 AM on August 30, 2007