Stock Broker Practice Test

What the Stock Broker is and how it works

According to Financial Industry Regulatory Authority, “Candidates must be associated with and sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm to be eligible to take FINRA representative-level qualification exams.”^[1]

Becoming a registered stock broker involves taking qualification tests administered by the Financial Industry Regulatory Authority. Anyone aged 18 or older may take the Securities Industry Essentials exam without firm association. Testing takes place at a Prometric test center or online, with a fee of $100. The SIE has 75 multiple-choice questions, requires a passing score of 70, provides an immediate pass/fail notice, and remains valid for 4 years.

To obtain the general securities representative registration, candidates must take the Series 7 exam. This representative-level exam costs $395, requires firm sponsorship by a FINRA or SRO member firm, and treats the SIE as a corequisite. Once enrolled, FINRA provides a 120-day window to complete the test. The Series 7 consists of 125 multiple-choice items and requires a passing score of 72.

If an applicant does not pass the Series 7, FINRA enforces a 30-day wait, which extends to 180 days after 3 straight fails in 2 years. These wait periods drop to 15 days and 60 days on Jan 19, 2027. Once passed, registration lapses after 2 years unregistered unless maintained through the Maintaining Qualifications Program. Registered representatives must also complete the annual Regulatory Element continuing education by December 31. Additional requirements vary by state jurisdiction; consult official FINRA guidelines and state regulators for localized mandates.

Stock Broker Exam at a Glance

What changed for Stock Broker in 2026

• Oct 26, 2026: Eligibility (Series 7) changed to Sponsorship by a FINRA/SRO member firm; SIE is a corequisite (previously Must be sponsored by a FINRA/SRO member firm; SIE is a corequisite).^[1]
• Oct 26, 2026: Eligibility (SIE) changed to Anyone 18 or older; no firm association needed (previously Anyone 18 or older; no firm sponsorship needed).^[2]
• Oct 26, 2026: Validity (Series 7) changed to Lapses after 2 years unregistered (unless kept through MQP) (previously Lapses after 2 years unregistered (unless kept under MQP)).^[3]
• Oct 26, 2026: Retake policy (Series 7) changed to 30-day wait (180 days after 3 straight fails in 2 years); drops to 15/60 days on Jan 19, 2027 (previously 30-day wait; 180 days after 3 straight fails within 2 years).^[3]
• Oct 26, 2026: Number of questions (SIE) changed to 75 multiple-choice questions (previously 75 questions).^[2]

Worked examples: how to reason through Stock Broker questions

These are practice questions written for this site, not questions from the real exam. Each explanation shows why the right answer is right and why the others are wrong.

Example 1

Question: Under FINRA Rule 4512, broker-dealers must make 'reasonable efforts' to obtain which information for non-institutional customer accounts?

1. Tax returns for the past 3 years
2. The name of a trusted contact person
3. Employment history for 10 years
4. A credit score from a major bureau

Answer: B. The name of a trusted contact person

Explanation:

Option B is correct because FINRA Rule 4512 requires member firms to make reasonable efforts to obtain the name and contact details of a trusted contact person when opening or updating a non-institutional customer account. This measure helps firms protect client assets, particularly when addressing suspected financial exploitation or diminished capacity. Option A is incorrect because firms do not mandate tax returns for the past 3 years as standard account opening records. Option C is incorrect because obtaining employment history for 10 years is not required under this standard recordkeeping rule. Option D is incorrect because broker-dealers do not require a credit score from a major bureau to establish a brokerage account. As a general rule, member firms must request trusted contact details to safeguard accounts, though customers may decline to provide it.

Example 2

Question: What is 'unauthorized trading' and what are its consequences for a registered representative?

1. Trading in currencies without a Forex license; results in a fine
2. Executing trades in a customer's account without the customer's prior knowledge or approval; can result in termination, FINRA sanctions, and civil liability
3. Trading after hours on foreign exchanges; results in exchange penalties
4. Trading below the NBBO price; results in regulatory review

Answer: B. Executing trades in a customer's account without the customer's prior knowledge or approval; can result in termination, FINRA sanctions, and civil liability

Explanation:

Option B is correct because unauthorized trading occurs when a representative executes transactions in a customer account without obtaining prior explicit authorization or holding formal discretionary trading authority. Such misconduct violates industry rules and can lead to employment termination, FINRA disciplinary fines or suspensions, and civil liability. Option A is incorrect because trading foreign currencies without appropriate registration is a licensing violation, not unauthorized trading. Option C is incorrect because executing trades after normal market hours on foreign exchanges represents standard international trading if authorized by the client. Option D is incorrect because executing transactions outside prevailing market quotes involves trade execution standards such as trade-through rules rather than unauthorized activity. The general rule is that representatives cannot execute any transaction without client consent unless a formal discretionary account agreement is established in writing.

Example 3

Question: What is 'rebalancing' a portfolio and why is it done?

1. Switching all investments to bonds when markets are volatile
2. Periodically adjusting a portfolio back to its target asset allocation after market movements cause drift
3. Adding more money to the best-performing assets
4. Selling all underperforming investments annually

Answer: B. Periodically adjusting a portfolio back to its target asset allocation after market movements cause drift

Explanation:

Option B is correct because rebalancing involves systematically buying or selling assets to realign an investment portfolio with its original target asset allocation after asset values drift over time. This process realigns the holdings with the client's intended risk tolerance and investment objectives. Option A is incorrect because moving entirely into debt instruments during volatility is an emotional market timing reaction rather than a disciplined allocation adjustment. Option C is incorrect because funneling capital solely into outperforming holdings concentrates risk instead of restoring asset balance. Option D is incorrect because liquidating every lagging holding ignores cyclical recovery and contradicts long-term diversification strategy. The general rule is that portfolio rebalancing maintains an investor's predetermined risk profile by trimming overweight asset classes and buying underweight asset classes.

How to use these practice tests

Begin preparation by reviewing foundational rules and market concepts before scheduling your examination. Start by establishing core regulatory knowledge using the Stock Broker Securities Regulations & Compliance set and review customer account procedures through Stock Broker Customer Accounts & Suitability. Then study complex equity and debt instruments by completing Stock Broker Investment Products & Securities Types and practice derivatives on Stock Broker Options Trading & Strategies.

As you progress within your 120-day testing window, reinforce analytical skills with Stock Broker Portfolio Analysis & Risk Management and study execution rules on Stock Broker Market Structure & Trading Mechanics. Work through the full mock session on Stock Broker Test to evaluate endurance across multiple-choice questions. Review all incorrect responses against official FINRA regulatory notices. Repeat targeted topic sets until you consistently exceed the passing score threshold of 70 for the SIE or 72 for the Series 7 before booking your test appointment.

Sources & last verified

1. Financial Industry Regulatory Authority — number of questions, passing score, exam fee, eligibility (official source). “Number of Items 125 Format Multiple choice” Verified Oct 26, 2026.
2. Financial Industry Regulatory Authority — number of questions, passing score, exam fee, validity (official source). “Number of Questions: 75” Verified Oct 26, 2026.
3. Financial Industry Regulatory Authority — retake policy, validity (official source). “Any person who fails to pass a qualification examination prescribed by FINRA shall be permitted to take that examination again after a period of 30…” Verified Oct 26, 2026.
4. Financial Industry Regulatory Authority — renewal (official source). “Each covered person registered with FINRA in a representative or principal registration category immediately preceding January 1, 2023 shall complete the Regulatory Element for the…” Verified Oct 26, 2026 · source checked Oct 19, 2026.
5. Financial Industry Regulatory Authority — testing window (official source). “After a candidate is enrolled to take an exam, FINRA will post a 120-day window in which the exam must be taken.” Verified Oct 26, 2026.

How we verify: editorial & fact-checking policy. Report an error: contact us.