40 (Refer to FAA-CT-8080-2G, Figure 12.) What are the current conditions for Chicago Midway Airport (KMDW)?
A. Sky 700 feet overcast, visibility 1-1/2SM, rain.
From: FAA-H-8083-25B, "Pilot’s Handbook of Aeronautical Knowledge"
The weather is next and can be broken down into two different categories: qualifiers and weather phenomenon. First, the qualifiers of intensity, proximity, and the descriptor of the weather are given. The intensity may be light (-), moderate ( ), or heavy (+). Proximity only depicts weather phenomena that are in the airport vicinity. The notation “VC” indicates a specific weather phenomenon is in the vicinity of five to ten miles from the airport. Descriptors are used to describe certain types of precipitation and obscurations. Weather phenomena may be reported as being precipitation, obscurations, and other phenomena, such as squalls or funnel clouds. Descriptions of weather phenomena as they begin or end and hailstone size are also listed in the “Remarks” sections of the report.
Chapter 13, "Aviation Weather Services"
The first five codes are the significance (normal or special), the location, the observation time, the wind, and the visibility.
Page 13-6 and 13-7, Aviation Routine Weather Report (METAR)
1 1/2SM is the prevailing visibility, reported in statute miles as denoted by the letters “SM.”
This METAR has no qualifier, descriptor, obscuration or other phenomena, just "RA" for Rain.
This is correct.
Surface aviation weather observations (METARs) are a compilation of elements of the current weather at individual ground stations across the United States. (METAR is the MEteorological Terminal Aviation Routine weather report station network.)

Wikipedia is a good, concise source of METAR codes.
Cloud coverage is next.
OVC007 in this METAR indicates Overcast with a ceiling of 700 ft. AGL.  (Cloud coverage is reported by the number of 'oktas' (eighths) of the sky that is occupied by cloud.)
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