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Official Practice ProblemFINRA Series 7 Blueprint: Function 1
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Question #s7-prep2-s7-q-107Function 1Fundamental

Account Types

Which statement is TRUE regarding 529 plans?

Correct Choice: B

529 plans: K-12 tuition capped at $10,000/year. No income limits, no age limits, anyone can contribute.

Complete Analysis & Legal Rationale

529 plans limit K-12 tuition expenses to $10,000 per year. Unlike Coverdell ESAs, 529 plans have no income limits for contributors, no age restrictions, and anyone can contribute to an account.

Distractor Autopsy (Why Other Options Are Traps)

FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:

Choice AIncorrect
Concept Trap

Does not match the governing concept in the explanation.

Choice BCorrect
None

Matches the verified teaching point in the explanation.

Choice CIncorrect
Concept Trap

Does not match the governing concept in the explanation.

Choice DIncorrect
Concept Trap

Does not match the governing concept in the explanation.

Authorities & References:

Official Standard: Fair dealing obligations in municipal securities activities (verify current text).

Official SourceMSRB MSRB Rule G-17 — Conduct of Municipal Securities and Municipal Advisory Activities

Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.

Official SourceFINRA FINRA Series 7 Content Outline — General Securities Representative Examination (Series 7) Content Outline
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Regulatory Authority & Citations: Primary Legal Sources

Verified citations governing Question #s7-prep2-s7-q-107 (FINRA Series 7 Content Outline)

To pass the FINRA Series 7, candidates must understand not just the calculation formulas, but the exact federal securities acts, SRO rulebooks, and statutory frameworks that enforce them. Review the primary authority records below:

MSRBMSRB Rule G-17— Conduct of Municipal Securities and Municipal Advisory Activities

Fair dealing obligations in municipal securities activities (verify current text).

Read MSRB Official Rule
FINRAFINRA Series 7 Content Outline— General Securities Representative Examination (Series 7) Content Outline

Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.

Read FINRA Official Rule

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