Back to school: Attending a prep course

People who learn best by listening to an instructor and interacting with other students benefit from attending prep courses. Unfortunately, not all Series 7 exam prep courses and training materials are created equally. Unlike high school or college courses, the content of Series 7 prep courses and the qualifications of the instructors who teach them aren’t regulated by your state’s Department of Education, the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), or any other government agency. Do some research to locate the Series 7 training course that works best for you.

The following sections explain some things to consider and questions to ask before enrolling. Take a look at the info you gather and trust your gut. Is the primary function of the prep course to train students to be successful on the Series 7 exam, as it should be? Or do you suspect it’s the brainchild of a broker-dealer who’s looking for extra revenue to supplement her failing stockbroker business? (Run away!)

Selecting prep material to study on your own

If you’re the type of person who can follow a committed study schedule on your own every day, you may be able to pass the Series 7 exam without a prep course. Many different types of study aids are available to help you prepare.

No matter what your learning style is, I’m a firm believer in using a textbook as a primary training aid. You can use online courses, online testing programs, CDs, apps, and flash cards as supplements to your textbook, but give your textbook the starring role. By virtue of its portability and ease of use (you don’t have to turn it on, plug it in, or have access to the Internet, and it can never, ever run out of batteries), the textbook is simply the most efficient and effective choice.

My personal favorites are the Empire Stockbroker Training Institute’s Series 7 Coursebook and its companion, Series 7 Final Exams (www.empirestockbroker.com). The textbook focuses on the relevant exam topics, is easy to read and understand, and includes plenty of practice questions and detailed explanations. Securities Training Corporation (www.stcusa.com) and Kaplan Financial (www.kaplanfinancial.com) also publish quality Series 7 books. A lot of the better Series 7 course textbooks are available online rather than in bookstores.

In addition to Series 7 Exam For Dummies and a textbook, consider investing in one or more of the following popular study aids:

• Online testing: I’m all for online testing. Certainly, the more exams you take, the better. If the practice exam simulates the real test, it’s even more valuable. With this study aid, you have access 24 hours a day, 7 days a week, and can pace yourself to take the exams at your leisure. Select a program (for example, www.empirestockbroker.com always has the most current, updated simulated exams) with a couple thousand questions or more, along with answers and explanations.

• Audio CDs: You may still be able to find audio CDs or audio courses to help you prepare for the Series 7. This form of training can be beneficial as a review for people who already have a decent understanding of the course material. You can listen to recorded material while on the go or in your home.

  Personally, I think recording your own notes — especially on topics you’re having trouble with — is a better use of your time. Putting the info in your own words, saying ideas out loud, and listening to the recordings can really help reinforce the concepts.

• Flash cards: For those who already have a grasp on the subject matter, flash cards are good because you can tuck ’em in your pocket and look at ’em anytime you want. Commercial cards may be confusing and long-winded. You’re better off making cards that focus on the areas that are most problematic for you.

Blocking out some time to study

You have to use your time efficiently, and to accomplish this, you need to grab every spare moment and channel it into study time. If you’re attending a Series 7 prep course, your instructors should help you (and your classmates) set up a study schedule for before, during, and after you complete the course.

If you’re in charge of carving out your study time, then plan your study regime as if it were a full-time, 40-hour-per-week job and allot approximately 150–200 hours over a three- to four-week period for studying. If you don’t have a job (other than studying), I suggest that you put in at least five or six hours a day. (For advice on how to study well, please look at “Exploring Study Strategies”; the following section discusses setting up an actual schedule.)

Especially for those of you who continue to work at your full-time job, now may be the time to have a heart-to-heart with your boss to negotiate some extra study time. After all, you need to work this out only for the next few weeks. Can you take vacation time? Will your boss allow you flex time (where you agree to work two hours later each day for four days and have the fifth day off)? Can you arrange a quiet place at work to study during breaks and lunchtime?

Set aside a consistent time to study on a daily basis. If possible, schedule your study time around your internal clock. For example, if you’re the type who needs a brass band to wake you up and get your mind functioning first thing in the morning but you’re wide awake and ready to go at midnight, you may be better off with a study schedule that begins later in the day and lasts into the night. By contrast, if you’re leaping out of bed like a jack-in-the-box at the crack of dawn but are dead on your feet by 10 p.m., a morning study schedule would be more favorable.

You never know when extra time to study will present itself, so carry your textbooks or some flash cards with you whenever you leave home. You can read or drill yourself whenever you find some spare time — on the train, waiting in line, and yes, even during your trips to the restroom.

It’s a plan: Getting into a study routine

Establishing and sticking to a study routine is essential. Many people find the Series 7 exam to be difficult because they have to absorb so much material in a relatively short time span. Furthermore, most of the information on the test is easy to forget because it’s not info you use every day. Therefore, you have to reinforce your knowledge on a daily basis by constantly reviewing and revisiting the old information while learning new material. You’ll continue to follow this routine over and over and over again.

Organizing yourself to cover all the topics you’ll be tested on is crucial. If you’re taking a prep course or home study course, a huge benefit is that during the course, the time necessary to learn and review all the subject matter will be allotted for you.

If you’re trying to study on your own, get yourself a course textbook and divide the pages by the number of days you have available for studying. Be sure to allow yourself an extra week or two for practice exams. Review each chapter and complete each chapter exam until you have a firm grasp on a majority of the information. Take notes, highlight, and review the material you’re having problems with until you feel comfortable with the concepts. Initially, you’ll spend a majority of your time on new material; after that, you’ll spend your time reviewing and taking chapter quizzes.

During the last one to two weeks leading up to the exam, take as many practice exams as possible. Remember to review each exam thoroughly before moving onto the next one. For more helpful tips, check out the section “Exploring Study Strategies” later in this chapter.

Give it a rest: Taking short breaks

If you find yourself reading the same words over and over and wondering what the heck you just read, it’s probably time to take a break. Taking short (5- to 10-minute) breaks can help you process and absorb information without confusing new ideas with the old.

When you reach your saturation point and really start zoning out, you can practice a bit of productive procrastination — walk the dog, shower, do some sit-ups and/or push-ups, grab a meal or a snack, or do anything else that lets you move around or take care of the little things that have to get done. A little human contact can go a long way too, provided you have the discipline to hit the books again.

Sometimes, taking a break from one study method can be as good as taking a break from studying altogether. Use multiple types of study material (textbooks, class notes, flash cards, and so on). If, for example, you get sick of looking at a textbook, try reviewing your notes, flipping through or creating some flash cards, or taking some online practice exams.

Staying focused from day to day

Passing the Series 7 exam is a rite of passage. It’s your ticket to wealth, fame, and fortune (or at least a decent job). If you put the time and effort into studying for the Series 7, you’ll be rewarded. If not, you’ll have to relive the nightmare over and over again until you reach your objective. To reap your reward as quickly as possible, make a resolution: Until you pass the Series 7, commit to limiting your social life, and devoting most of your waking hours to one purpose — studying for the exam. Repeat after me: “This is my life for now.”

If you find that you really need to take a mental health day off at some point, make sure that you don’t separate yourself from your textbooks for more than one day — jump right back into the Series 7 fire the next day.

Under no circumstances (except in the case of a family emergency) should you stop studying for more than one day within a two-week period. I’ve had students who were doing quite well come back to take another prep class because their test dates were too far off and they’d put the books down for a while. The next thing they knew, they’d forgotten half of what they’d learned. Fortunately, the information comes back faster the second time around.

To keep focused on your studies without permanently forgetting about otherwise important life activities, prepare a file folder labeled “To do after I pass the Series 7.” If anything comes up while you’re studying, instead of interrupting your study time or stressing about things that need to be done, write down the task or event on a piece of paper, place it in your to-do file, and put it out of your mind.

Devoting time to practice tests

Certainly, when you’re first going over new material, you should spend most of your time learning the information and taking chapter quizzes. After you feel like you have a good handle on the material, you should start taking full practice exams to see where you stand. (This book includes questions throughout Parts 2–4, followed by two full-length 125-question practice exams with answers and explanations in Part 5.) The last week or two before the exam should be almost entirely devoted to taking practice exams and reviewing them.

After you move into the practice-test phase, continue to use your textbook not only to reference material you don’t understand, but also to ensure you don’t forget what you’ve learned. Too many people rely solely on the tests and forget to read their textbook now and then. Figure on rereading one to two chapters per day. After taking a practice exam, always completely review it before you move on to the next one. And don’t listen to the people who say you have to take three or four practice exams a day; you’re better off taking one exam per day and spending twice as long reviewing it as you spent taking it. This method helps ensure that you know the subject matter and that you won’t make the same mistakes twice.

Practice exams can help you gauge whether you’re ready for the real Series 7. See “Knowing When You’re Ready” at the end of this chapter for details.

If you run out of exams to take, it’s better to purchase more or see whether someone else in your firm has a different book with tests you can borrow than to take the same exams over and over again.

Avoiding study groups

Unless your study group includes your instructor, I recommend that you avoid a study group like the plague. The problem with study groups is that everyone wants to study the information that she’s having problems with, and chances are not everyone is struggling with the same thing. And if everyone is having the same problem, who can help you? I strongly feel that your time is better spent studying on your own.

If you really feel you’d benefit from studying with someone else, try to arrange a tutoring session with a Series 7 instructor.

Staying in shape

Ignoring the importance of physical fitness when you prepare to take the Series 7 exam is a big mistake. The exam itself (and the prep time you put into your study schedule) is not only mentally exhausting but physically demanding as well. You have to be able to stay alert and concentrate on difficult questions for a full three hours and 45 minutes. In the weeks leading up to the test, any exercise you can do to keep yourself physically fit — including cardiovascular exercise such as jogging or bike riding — can help out. A workout also gives you a great reason to take a study break.

Read the question carefully

Don’t be fooled. Exam creators love to trip you up by making you jump ahead and answer the question — incorrectly — before you read the entire problem. Often one of the last words in the call (specific inquiry) of the question is worded in the negative, like “all of the following are true except,” or “which of the following is the least likely to,” and so on. When reviewing the answers to a practice test, these questions cause some students to groan or slap themselves in the head when they realize their mistake. Don’t worry — this common reaction usually goes away after you start getting better at taking exams.

Look for phrases that lead to the topic tested

Try to identify the specific category that the question is testing you on. If you study for the number of hours that I recommend (see “Blocking out some time to study”), you’ll most likely cover the material the question references at some point, and you’ll be able to identify the topic that the question applies to. After you know the topic, your brain can retrieve the information you need from its mental file cabinet, making it easier for you to focus on the applicable rule, equation, or concept so you can answer the question correctly.

Work with what you have

If possible, work with the facts — and only the facts — in the question. Too often, students add their own interpretation to the question and turn a straightforward problem into a mess. Use the facts that are given, dump the garbage information that isn’t necessary to answer the question, and don’t make the question more difficult or assume that there’s more to the question than what appears.

Adding irrelevant information into a question seems to be a very common practice for students (for example, they ask, “Yeah, but what if she were married?”). My standard answer is, “Did it say that in the question?” to which the response is no. Don’t make your life more difficult by adding your own speculations into the question; just answer the question that’s given to you.

Don’t obsess; mark for review

If you experience brain freeze while taking the exam, don’t panic or waste valuable time on one question. Eliminate any answer(s) you know must be wrong (if any), take your best guess, and mark the question for review so you can easily return to it later. The question may even resolve itself. For example, another question may trigger your memory as you continue to take the exam, and the correct answer to the earlier question may become clear.

Keep track of time

Time yourself so you’re always aware of how much time you have left to complete the exam. One way to do so is to figure out which question you need to be up to at the end; use that as a benchmark to keep track of your progress. In your session, you have three hours and 45 minutes to complete the exam. You have to answer a total of 135 questions (10 don’t count toward your score). This gives you 1.38 minutes (or 1 minute and 22.8 seconds) to answer each question.

Translating these numbers to half-hour benchmarks gets you the results shown in the following table.

Memorize these benchmarks, write them on your scrap paper (or dry erase board) as soon as the exam administrators allow you to begin, and keep referring to your watch or the clock on the computer screen to track your progress in relation to the benchmark. If you find yourself falling behind, pick up your pace. If you’re really falling behind, mark the lengthier, more difficult questions for review and spend your time answering the easier questions. Even though the more difficult questions (at least in their estimation) may be worth a little more, you can't afford to be bogged down for too long on one question.

Most students don’t have a problem finishing the Series 7 exam on time. If you easily and consistently finish 125-question Series 7 practice exams in less than three and a half hours or so, you should be okay on the real Series 7.

When you are taking the Series 7 exam at the test center, if you find yourself obsessing over the clock on the computer to the point that you can’t concentrate on the question in front of you, hide it by clicking on the lower left-hand corner of the computer screen. (Check out Figure 1-1 in Chapter 1.)

Master the process of elimination

The Series 7 exam is a standardized exam. This format makes it similar to other practical exams of this type: The best way to find the correct answer may be to eliminate the incorrect answers one at a time. I help you develop this crucial skill as you tackle the topic-specific questions throughout this book.

Maintain your concentration

To maintain your concentration, read the stem of the question (the last sentence before the answer choices) first to keep yourself focused on what the question is asking. Next, read through the entire problem (including the stem) to get a grip on the facts you have to consider to select the correct answer. You can then anticipate the correct answer and read all the answer choices to see whether your anticipated answer is there. If you don’t see your answer and none of the other choices seem to fit, reread the stem to see whether you missed an important fact. Check out Chapter 3 for more detailed test-taking tips.

You can also take care to keep yourself physically alert. The last hour or so is usually the most difficult. I recommend eating a small protein bar prior to starting the test to help keep your levels of energy and concentration high. Forget high-sugar/high-carb foods; leave them for after the exam. These foods boost your sugar level temporarily, but when the level drops, your energy and concentration levels sink like a lead balloon.

Low energy levels can lead to sloppy mistakes. If you feel yourself fading, do whatever it takes to stay alert and focused: Get up and get a drink of water, splash some water on your face, stretch, or dig your fingernails into the palms of your hands.

Think carefully before changing your answers

In general, if you select an answer and you can’t really explain why, maybe it was just a gut answer. You’re five times more likely to change to a wrong answer than to the right one, so change your answer only if

• You didn’t read the question correctly the first time and missed a major point that changes the answer choice (for example, you didn’t see the word except at the end of the question).
• You’re absolutely sure you made a mistake.

Use the scrap paper wisely

In the testing room, you receive a few pieces of letter-sized scrap paper (or a dry erase board), all of which will be collected — so restrain yourself from writing any obscenities about the exam or its creators. Here are some more productive ways to use this valuable resource:

• Mark dubious questions for review. You have to answer each question before you can go to the next, so if you’re not sure of the correct answer, eliminate the wrong answers, take your best guess, and mark the question for review later. On your scrap paper, write down the numbers of any questions you want to check before the end of the session.
• Eliminate wrong answers. You can’t write on the computer screen, so for each question, you may find it helpful to write A, B, C, and D on your scrap paper (in a column) as they appear on the screen and eliminate answers directly on your paper.

• Do a brain dump. After the exam begins and before your brain gets cluttered with Series 7 exam questions, use your scrap paper or dry erase board to jot down the formulas you’ve memorized or topic matters that tend to give you problems so that you can refresh your memory during the exam. Your scrap paper or dry erase board will be collected at the end of the first session, so repeat the brain dump process after you begin the afternoon session.

  When doing a brain dump, write only the things that you’re really having problems with. You know — the ones that you still feel the need to study the morning of the test. Don’t worry about cataloguing things you already know and feel comfortable with, because it’s a waste of your time (and paper). Those items should come to the surface of your brain as soon as you need them.

• Time yourself. Write down your half-hour benchmarks (prepared for you in the “Keeping track of time” section earlier in this chapter) on your scrap paper and check periodically to make sure you stay on track.
• Perform calculations and draw diagrams. Use the scrap paper to work out math problems, create seesaws, or make any other diagrams that help you rack up points.