Series 7 Suitability and Taxes Practice Questions
F3 3.1–3.4 · Provides information, makes recommendations, transfers assets and keeps records · 91 of 125 scored questions across 6 topics
Ten Series 7 questions on suitability, strategies and taxes, untimed, with a worked answer after each one.
Or take the full Series 7 mock examA retail customer qualifies for two share classes of the same fund that are identical except for annual expenses of 1.00% and 0.60%. The representative recommends the 1.00% class because it pays him more. Under Reg BI, this recommendation
Suitability, strategies and taxes on the Series 7
Making recommendations is the heart of Function 3: match the product and strategy to the customer’s profile, explain the risks and taxes, and keep the records that prove it.
- Outline
- F3 3.1–3.4: Investment risks, portfolio analysis, Reg BI and suitability, tax treatment, statements, confirmations and account transfers
- Share of the exam
- F3 Provides information, makes recommendations, transfers assets and keeps records: 91 of 125 scored questions (73%)
- Our drill
- 10 questions from 45 on this topic, untimed, a worked answer after each; one free attempt, unlimited with a pass
What to know
- Regulation Best Interest applies to recommendations to retail customers: disclosure, care, conflict-of-interest and compliance obligations. A broker-dealer delivers Form CRS to a retail investor before or at the earliest of a recommendation, placing an order or opening an account.
- FINRA Rule 2111 suitability has three parts: reasonable-basis, customer-specific and quantitative (no excessive trading).
- Interest-rate risk is greatest for long-maturity, low-coupon bonds; reinvestment risk is greatest for short maturities and callable bonds; systematic risk cannot be diversified away.
- Capital losses offset capital gains, and up to $3,000 of net loss a year offsets ordinary income, with the rest carried forward.
- Customer account statements go out at least quarterly (FINRA Rule 2231). Under FINRA Rule 11870 the carrying firm validates an ACATS transfer request within one business day and completes the transfer within three business days after validation.
- A representative who recommends a product must understand its features and risks first; that is the reasonable-basis obligation.
Test yourself on suitability, strategies and taxes
Ten Series 7 questions on suitability, strategies and taxes, untimed, with a worked answer after each one.
Or take the full Series 7 mock examCommon questions
How many suitability, strategies and taxes questions are on the Series 7?
Suitability questions are part of Function 3 (91 of the 125 scored questions).
Are these real Series 7 questions?
No. FINRA and NASAA do not release exam questions. These are original practice questions written to the official content outline, with a worked explanation and the rule behind every answer.
More Series 7 topics
Outline and exam facts checked November 2026: FINRA: Series 7 exam · FINRA Series 7 Content Outline · FINRA Regulatory Notice 26-18.
Original independent practice questions written to the published FINRA content outline. Not affiliated with or endorsed by FINRA or NASAA.