Tracking Equity Securities – Series 7 Exam
- April 1, 2025
- Posted by: 'FINRA Exam Mastery'
- Category: Finance
🟦 Tracking Equity Securities – Series 7 Exam
A key concept every future registered rep must understand.
Understanding how to track equity securities is a core part of the Series 7 exam, and it plays a major role in the day-to-day responsibilities of a general securities representative. Equity securities, primarily common and preferred stocks, must be monitored closely to assess performance, manage portfolios, and provide accurate advice to clients.
Here’s what you need to know for the exam—and the real world.
📈 What Are Equity Securities?
Equity securities represent ownership in a company. The two main types are:
- Common stock – gives voting rights and potential dividends
- Preferred stock – provides fixed dividends, but typically no voting rights
Tracking these involves monitoring price movements, volume, dividends, corporate actions, and news events that can impact value.
🔎 Key Metrics for Tracking Equities
For the Series 7, you’ll need to understand how to analyze and interpret these:
| Metric | What It Tells You |
|---|---|
| Price | Current market value of the stock |
| Volume | Number of shares traded in a day |
| Dividend yield | Income return based on price |
| P/E ratio | Valuation relative to earnings |
| EPS (Earnings Per Share) | Profit per share outstanding |
| Beta | Volatility compared to the overall market |
| Market capitalization | Total value of all outstanding shares |
🧮 Tools and Resources Used
Series 7 candidates should know how securities are tracked using:
- Quotations from Nasdaq and other exchanges
- Ticker symbols and price changes
- Charting tools for price trends
- SEC filings for earnings, splits, and changes in capital structure
- News sources and analyst reports
🧾 Corporate Actions to Watch
Equity holders must stay informed on actions that affect stock value or ownership structure:
- Stock splits and reverse splits
- Dividends (cash and stock)
- Mergers and acquisitions
- Buybacks (repurchase programs)
- Rights offerings and warrants
Expect exam questions that describe these events and ask how they affect shareholders and share value.
📚 How It Appears on the Series 7 Exam
You may encounter:
- Scenario questions about stock price movements and dividends
- Questions involving P/E ratios, EPS, and beta
- Items testing your understanding of corporate actions
- Interpretations of charts, market news, and trading volume
🎯 Master This Topic with Confidence
Want to solidify your knowledge with expert explanations and practice questions?
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We’ll help you track equities like a pro—and pass the Series 7 with ease.