A customer confirmation for a zero-coupon bond must generally note that:

It makes no periodic interest payments

It pays monthly interest at a rate that resets with Treasury yields

It can't be sold before maturity

A firm receives securities it believes were delivered in error or with problems after accepting them. It may return them through a:

Buy-in, executed at the selling firm's expense

A customer enters a "do not increase" (DNI) instruction on an open order. This means:

The share quantity won't be increased for stock dividends or splits

The price won't be reduced for cash dividends

The order can't be filled in part

The order expires at day's end if it isn't filled

A customer enters an order to buy 200 shares of MSFT. Because of a firm error, the trader buys 200 shares of AAPL for the customer's account instead. The error is discovered later that day, after MSFT's price has risen. Which correction is most appropriate?

With approval from a designated registered principal, reallocate the AAPL trade to the firm's error account and sell MSFT to the customer at the price it was trading when the order was placed

Have the registered representative reallocate the AAPL trade to the firm's error account and fill MSFT at the original price, with no principal sign-off because the customer is made whole

With approval from a designated registered principal, move the AAPL trade to the registered representative's personal account and fill MSFT for the customer at the original price

With approval from a designated registered principal, cancel the AAPL trade, buy MSFT for the customer at the current market price, and credit back the commissions on both trades

An immediate-or-cancel (IOC) order must be:

Executed immediately in whole or in part, with any unfilled part canceled

Filled entirely or not at all, with no time limit

Executed only at the close, at the official closing price

For tax purposes, a stock sale generally occurs on the:

Date the confirmation is mailed

For a stock dividend of 25% or more, the ex-dividend date is generally:

The first business day after the payable date

One business day before the record date

The same as the declaration date

One week before the payable date

Series 7 · 11% of the exam

Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions practice questions

10 free Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions questions for the General Securities Representative Exam (Series 7) exam, each with the correct answer and an explanation for every option.

Start the questions Free 10-question Series 7 quiz

What this domain covers

Taking and handling orders: checking the customer's instructions, entering and executing trades, and the settlement and confirmation steps that follow.

Exam weight: 11%
On a real exam: ≈ 14 questions
In our bank: 65 questions

Topics that come up most

Order types: market, limit, stop and stop-limit
Order tickets, discretion and time-and-price authority
Short sales and Regulation SHO locate requirements
Settlement cycles, including T+1 regular-way settlement
Trade confirmations, errors and best execution

How to study it

Sketch where buy and sell stop and limit orders sit relative to the market price, and learn which trades settle on which day; both come up often.

Sample Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions questions

Try each one before opening the answer. Original questions written to the official exam objectives.

Question 1
A customer confirmation for a zero-coupon bond must generally note that:
- AIt is guaranteed by the FDIC
- BIt pays monthly interest at a rate that resets with Treasury yields
- CIt makes no periodic interest payments
- DIt can't be sold before maturity
Show answer and explanation
Answer: C) It makes no periodic interest payments
- AIncorrect. It isn't.
- BIncorrect. It pays none.
- CCorrect. Zero-coupon bonds are bought at a discount.
- DIncorrect. It can be sold.
Question 2
A firm receives securities it believes were delivered in error or with problems after accepting them. It may return them through a:
- AStop order
- BBuy-in, executed at the selling firm's expense
- CDK notice
- DReclamation
Show answer and explanation
Answer: D) Reclamation
- AIncorrect. That's an order type.
- BIncorrect. That's for fails to deliver.
- CIncorrect. That's for unrecognized trades before settlement.
- DCorrect. It's used to correct bad deliveries.
Question 3
A customer enters a "do not increase" (DNI) instruction on an open order. This means:
- AThe share quantity won't be increased for stock dividends or splits
- BThe price won't be reduced for cash dividends
- CThe order can't be filled in part
- DThe order expires at day's end if it isn't filled
Show answer and explanation
Answer: A) The share quantity won't be increased for stock dividends or splits
- ACorrect. It's an order qualifier.
- BIncorrect. That's do not reduce.
- CIncorrect. That's all-or-none.
- DIncorrect. That's a day order.
Question 4
For good delivery, a certificate registered to the seller must be endorsed or accompanied by a:
- AProxy
- BStock power
- CDue bill
- DProspectus
Show answer and explanation
Answer: B) Stock power
- AIncorrect. That's for voting.
- BCorrect. It transfers ownership.
- CIncorrect. That's for dividends.
- DIncorrect. That's for offerings.
Question 5
With T+1 settlement, a stock's ex-dividend date is generally:
- AOne day before record
- BThe record date
- CThe payable date
- DThe declaration date
Show answer and explanation
Answer: B) The record date
- AIncorrect. That applied under T+2.
- BCorrect. Buyers on or after that date don't get the dividend.
- CIncorrect. That is when payment is made.
- DIncorrect. That is the announcement.
Question 6
A customer enters an order to buy 200 shares of MSFT. Because of a firm error, the trader buys 200 shares of AAPL for the customer's account instead. The error is discovered later that day, after MSFT's price has risen. Which correction is most appropriate?
- AWith approval from a designated registered principal, reallocate the AAPL trade to the firm's error account and sell MSFT to the customer at the price it was trading when the order was placed
- BHave the registered representative reallocate the AAPL trade to the firm's error account and fill MSFT at the original price, with no principal sign-off because the customer is made whole
- CWith approval from a designated registered principal, move the AAPL trade to the registered representative's personal account and fill MSFT for the customer at the original price
- DWith approval from a designated registered principal, cancel the AAPL trade, buy MSFT for the customer at the current market price, and credit back the commissions on both trades
Show answer and explanation
Answer: A) With approval from a designated registered principal, reallocate the AAPL trade to the firm's error account and sell MSFT to the customer at the price it was trading when the order was placed
To fix an order-handling error, the firm moves the wrong position into its own error account and gives the customer the intended security at the price available when the order was placed. Under Rule 4515, a registered principal must approve the change in account designation.
- ACorrect. FINRA guidance describes using the firm's error account to fix order-handling errors. In this scenario, the firm sells MSFT to the customer from its error account at the price available when the order was placed. Rule 4515 requires a qualified, registered principal to approve any change in account designation, including moves to error accounts, and the essential facts must be documented.
- BIncorrect. The economic result is right, but Rule 4515 does not allow a change in account designation, including a move to an error account, without authorization from a qualified, registered principal. Making the customer whole does not remove that requirement.
- CIncorrect. The wrong position belongs in the firm's error account, a firm account used to correct the error. It does not go to an employee's personal account. Moving a customer trade into the rep's own account is an improper reallocation, not an error correction.
- DIncorrect. Waiving commissions doesn't make the customer whole, because the customer still pays the higher MSFT price caused by the firm's error. The customer should get MSFT at the price it was trading when the order was placed.
Question 7
An immediate-or-cancel (IOC) order must be:
- AHeld until the end of the day
- BFilled entirely or not at all, with no time limit
- CExecuted immediately in whole or in part, with any unfilled part canceled
- DExecuted only at the close, at the official closing price
Show answer and explanation
Answer: C) Executed immediately in whole or in part, with any unfilled part canceled
- AIncorrect. It must fill immediately.
- BIncorrect. That's all-or-none.
- CCorrect. Partial fills are allowed.
- DIncorrect. That's market-on-close.
Question 8
Under Reg NMS, market makers must generally display customer limit orders that:
- AImprove their quote
- BAre market orders
- CAre odd lots only
- DAre canceled
Show answer and explanation
Answer: A) Improve their quote
- ACorrect. This is the limit order display rule.
- BIncorrect. It's about limit orders.
- CIncorrect. It's about improving limits.
- DIncorrect. It's about active orders.
Question 9
For tax purposes, a stock sale generally occurs on the:
- ASettlement date
- BTrade date
- CDate the confirmation is mailed
- DDate the customer files taxes
Show answer and explanation
Answer: B) Trade date
- AIncorrect. The trade date controls.
- BCorrect. Gains and losses are based on the trade date.
- CIncorrect. The trade date controls.
- DIncorrect. The trade date controls.
Question 10
For a stock dividend of 25% or more, the ex-dividend date is generally:
- AOne business day before the record date
- BThe first business day after the payable date
- CThe same as the declaration date
- DOne week before the payable date
Show answer and explanation
Answer: B) The first business day after the payable date
Under FINRA Rule 11140, for cash or stock distributions of 25% or more of a security's value, the ex-date is the first business day after the payable date, not the usual business day before the record date.
- AIncorrect. Under T+1 settlement, this is the usual ex-date for ordinary distributions. For distributions of 25% or more, FINRA Rule 11140 instead sets the ex-date after the payable date.
- BCorrect. FINRA Rule 11140 sets the ex-date for distributions of 25% or more at the first business day after the payable date. Until then, the shares trade with the right to the large distribution, so sellers don't give up shares they haven't yet received and buyers aren't confused about the price.
- CIncorrect. The declaration date is when the board announces the distribution. The ex-date is set later, by the settlement-based rules.
- DIncorrect. No rule ties the ex-date to one week before the payable date. For large distributions, the ex-date comes after the payable date, not before it.

Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions: FAQs

How much of the Series 7 exam is Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions?

Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions is 11% of the Series 7 exam by the official exam guide's weighting, which on a 125-question form works out to roughly 14 questions. The real exam's exact split varies by form.

What does the Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions domain cover?

Taking and handling orders: checking the customer's instructions, entering and executing trades, and the settlement and confirmation steps that follow.

How should I study Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions for Series 7?

Sketch where buy and sell stop and limit orders sit relative to the market price, and learn which trades settle on which day; both come up often.

Where can I practise more Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions questions?

This page has 10 free Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions questions with answers. The ExamWize Series 7 question bank has 65 questions in this domain. Every practice exam result breaks your score down by domain, and Review Mode re-drills the questions you missed.

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The full Series 7 bank has 65 Obtains and Verifies Customers' Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions questions. Timed practice exams match the real exam's length and domain weights, every result shows your score per domain, and Review Mode re-drills the questions you missed.

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Not affiliated with FINRA; questions are original, written from the official exam outline, and never copied from the real exam.