Thought I was done with exams

Tomorrow I take the Series 7 exam, which is the standardized licensing exam for stockbrokers. Even though I work in a proprietary trading group, and don’t go anywhere near any brokering-related activities, this is apparently one of the certifications I need if I’m going to be involved with the details of trading.
I think the last time I studied for a standardized test was when I was preparing for the physics GRE; needless to say this is a very different experience. I’m used to tests where I reason out the answers from a few basic rules, but the Series 7 mainly tests knowledge of the regulations concerning brokerage firms, so it’s almost all memorization and nothing more. There’s some logic to the general boundaries of these regulations but almost all of the specifics are arbitrary: there’s no way to derive the Regulation T margin requirement from first principles.
So I’ll get a question like, “How many additional shares may an underwriter sell under the green shoe option?”, and unless I can remember the one line in the phone-book-sized study guide that referred to this, and not get the percentage mixed up with the countless other similar numbers in other regulations, I’ll be stuck. And it doesn’t help that “green shoe option” only makes me think of this:

If only securities laws were as easy to remember as Mario trivia…
(Actually, there’s a mnemonic here: the Kuribo’s shoe only appeared in world 5-3 of Super Mario Bros. 3, and 5×3 is 15, exactly the percentage allowed in the green shoe option. Having discovered this, I’m unlikely to miss a similar question on the actual exam. This suggests that if I can just create a mapping between my Mario knowledge and the Series 7 material, I’ll do very well (and then I can write the Super Mario Guide to the Series 7 Exam). However, I expect to pass the test as is and higher scores are frowned upon in my group, as they indicate too much time spent studying rather than doing something more productive.)

9 thoughts on “Thought I was done with exams

  1. Chris L-S

    Heh, it’s kind of funny that the people who got the highest scores on the Series 7 and 66 when I was at UBS also tended to be the ones who didn’t do so hot when it came to actually succeeding in the business.
    IIRC, the test has a lot more to do with the basics of the knowledge than the absolute minutiae of the book. I think I got a 93% or something like that and I didn’t spend a heck of a lot of time studying. For example, I had no friggin idea what the green shoe option was.

  2. Arcane Gazebo

    The study materials I have are definitely big on minutiae; I’ve been hoping this isn’t true of the real exam. :) I don’t have to take 66 but I do have to take 63 and 55, the latter of which I’m told is the worst of the set.

  3. Arcane Gazebo

    It went quite well, actually: as you said, it was more concerned with basics, which made it a lot easier than the practice tests. And I am being thoroughly mocked for my score (which was 92%).
    And, my 45-day window for the Series 55 (equity trader’s exam) opened today, so I’ve got that to study for. It seems like less overall material but more details-oriented.

  4. JSpur

    Strategy for next time- answer correctly the 71% you have down cold and take a dive on the rest of the questions.

  5. Chris L-S

    LOL – that’s awesome. Well, I have no words of insight into the 55 or 63 – the 66 is financial planning, which is pure retail side as opposed to trading. I do remember that several people who passed the 7 with flying colors then failed the 66. I don’t remember my score – I passed, though.
    And I’m not sure how it is in Travis’ group, but where I worked if you failed a NASD exam you were fired, so you want to leave a little more margin for error than 71%. Try 75. *8P

  6. Mason

    Why do these exams have numbers in their names? Damn financial people.*
    * Not that I should talk… I am working with a couple of people on network analysis of time-dependent currency correlation networks (we’ve improved on some of the black box methods that are in common use), and I will be coadvising a new Ph.D. project on that in Fall 09 that HSBC will be funding.

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