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12 multiple-choice questions and 7 flashcards on Seeks Business for the Broker-Dealer from Customers and Potential Customers, about 2% of the Series 7 FINRA bank. Every one carries a written rationale.
Seeks Business for the Broker-Dealer from Customers and Potential Customers is one of 9 chapters in CoStudy's Series 7 (FINRA) bank, and it holds 12 of the bank's 630 multiple-choice questions — roughly 2% of the total. That proportion is not arbitrary: chapters follow the certifying body's published exam outline, and the number of questions in each is set by that domain's published weight, so the share of your practice time this chapter takes matches the share of the real exam it accounts for.
Studying by chapter is worth doing once you have a diagnostic score. A single overall percentage tells you whether you are close; it does not tell you which domain is dragging. Working a weak chapter in isolation, and re-testing it in isolation, is the fastest way to move a score that has stalled — and it is why the mock exams in CoStudy report by domain rather than as one number.
3 questions drawn from this chapter, with the full rationale shown — the controlling principle behind the right answer, and why each wrong option tempts and fails.
A rep sends a form letter promoting an equity fund to 30 retail clients. Under Rule 2210 this is:
Answer: A — Retail communication requiring principal approval
A) Correct — content sent to more than 25 retail persons in 30 days is retail communication. B) Retail investors don't fit institutional definition. C) Above 25 retail investors becomes retail communication. D) Public appearance is a different category.
Before a public offering's effective date, an underwriter may distribute:
Answer: C — Tombstone ads and a preliminary (red herring) prospectus
A) Final prospectus is only after effectiveness. B) That's a private placement, not a public offering. C) Correct — tombstone ads and preliminary prospectus permitted in cooling-off period. D) Research is restricted in the quiet period.
Which of the following would MOST likely violate FINRA's standards for retail communications?
Answer: B — A statement guaranteeing a minimum annual return on a variable investment
B) Correct — guaranteeing returns on a variable, market-dependent product is misleading and prohibited. A) A truthful, methodology-disclosed comparison is permitted. C) Balanced risk/benefit disclosure is required, not a violation. D) Linking to the prospectus is a compliant practice.
4 cards from the 7 in this chapter.
What are the three categories of communications under FINRA Rule 2210?
Correspondence (to 25 or fewer retail investors within 30 days), retail communication (to more than 25 retail investors), and institutional communication (to institutional investors only).
What is the Telephone Consumer Protection Act (TCPA)?
Federal law restricting telemarketing calls and requiring firms to maintain a Do Not Call list. Cold calling before 8am or after 9pm is prohibited.
What is a tombstone ad?
An advertisement announcing a new securities offering. Permitted during the cooling-off period. Contains only basic info (issuer, type, amount) — NOT a solicitation.
What are the cold-calling time restrictions for prospecting?
Telemarketing calls to prospects generally may only be made between 8:00 a.m. and 9:00 p.m. local time at the called party's location, and firms must maintain a do-not-call list honoring prospect requests not to be called again.
These are a sample. The full Seeks Business for the Broker-Dealer from Customers and Potential Customers chapter runs 19 items with per-chapter progress tracking, on the web and in the iOS app.
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