Monday, November 28, 2011

How to Pass the Series 7 Exam

How is anybody supposed to pass the Series 7 exam now that the passing score has been bumped to 72%?Same way they always have--by studying hard, doing lots of practice questions, and making sure they know the vocabulary and concepts inside out before scheduling their test. Many folks are getting over the hump through private, online tutoring at

To see if you're ready, or if you might need tutoring, get a GoNoGo exam from our home page at under "Am I ready for my exam?"

Saturday, November 19, 2011

Calculations on the Series 7 Exam

Don't want to mislead anybody--the Series 7 exam really does not involve lots and lots of heads-down calculations. But, it does include a few. And, when it does, the questions sometimes hit as hard as this one:

ABC pays a dividend of $2 on its common stock. The p/e ratio is currently 17. Therefore, if the dividend payout is 50%, the common stock trades for
A.A price that can not be determined by these facts alone

EXPLANATION: even though panic might set in, you do, in fact, have enough numbers to solve the problem, so A is quickly eliminated. The key here is to define and make sense of "dividend payout of 50%." The dividend is paid out of profits or earnings per share; earnings per share is/are the "e" in the "p/e" ratio. If $2 is half of the Earnings Per Share, the EPS = $4. The "p" or "price" of the stock is 17 times bigger than 4. $68.