Series 79 Practice Exam.
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1. A registered representative is reviewing why firms treat prohibited activities (such as unauthorized trading in a customer account) as serious conduct matters. Which of the following best describes the general rationale, reasoned from principles rather than a specific rule citation?
- A. Prohibited activities are acceptable if the representative later reimburses any losses.
- B. Prohibited activities are penalized only when the customer complains in writing first.
- C. Conduct that undermines customer trust and market integrity is restricted to protect investors and the fairness of the market.
- D. Firms disregard prohibited activities as long as trades are ultimately profitable for the customer.
Show answer & explanation
Answer: C
The most defensible statement is that restrictions on prohibited conduct exist to protect investors and preserve market fairness. This is a conceptual inference and cites no specific numeric rule. The other options describe conditions or exceptions that would undermine investor protection and are not supportable.2. When opening a new customer account, why is accurate and complete customer information generally important? Answer using conceptual reasoning only.
- A. Because customer information is only used to calculate the firm's registration fees.
- B. Because incomplete information automatically raises the exam passing score.
- C. Because complete account information supports appropriate handling of the account and reduces the risk of unsuitable or improper activity.
- D. Because accounts with missing information are exempt from all conduct standards.
Show answer & explanation
Answer: C
Complete and accurate customer information supports proper handling of the account and helps avoid unsuitable or improper activity. This is a conceptual inference with no ungrounded numeric claim. The other choices are non-sequiturs or contradict investor-protection principles.3. An exam administrator confirms the total time window for a candidate sitting the Series 79. What is the permitted duration?
- A. 120 minutes
- B. 90 minutes
- C. 180 minutes
- D. 150 minutes
Show answer & explanation
Answer: D
The Series 79 exam allots 150 minutes (2 hours and 30 minutes) for completion.4. To pass the Series 79 exam, a candidate must achieve at least what score?
- A. 73 percent
- B. 65 percent
- C. 70 percent
- D. 80 percent
Show answer & explanation
Answer: A
The passing score for the Series 79 exam is 73 percent. Scoring below this threshold results in a failing result.5. A supervisor is explaining, in general terms, why unauthorized transactions in a customer account are treated as a prohibited activity. Which explanation is most consistent with investor-protection principles and free of any specific rule number?
- A. Executing transactions without the customer's authority disregards the customer's control over their own account and is therefore treated as improper conduct.
- B. Unauthorized transactions are only a concern if they exceed a fixed dollar threshold.
- C. Unauthorized transactions are acceptable as long as they occur before the market closes.
- D. Unauthorized transactions are permitted whenever the representative believes them to be in the customer's interest.
Show answer & explanation
Answer: A
Executing trades without the customer's authority disregards the customer's control over the account and is treated as improper conduct — a conceptual inference with no ungrounded numeric claim. The other options carve out exceptions or introduce a fixed threshold that the source material does not support.6. A company's capital structure includes senior secured debt, senior unsecured notes, subordinated notes, preferred stock and common equity. In a liquidation, which claim is satisfied last?
- A. Common equity
- B. Senior unsecured notes
- C. Subordinated notes
- D. Preferred stock
Show answer & explanation
Answer: A
The priority waterfall runs secured debt, then senior unsecured, then subordinated debt, then preferred stock, then common equity. Common shareholders are the residual claimants and receive value only after every other claim is satisfied in full, which is why equity is the most volatile layer and why restructuring analysis focuses on where value breaks.7. In a restructuring, the point in the capital structure at which the enterprise value is exhausted and claims below receive nothing is commonly called what?
- A. The stalking horse
- B. The debtor in possession facility
- C. The fulcrum security
- D. The senior tranche
Show answer & explanation
Answer: C
The fulcrum security is the layer where value breaks, so its holders typically convert into the reorganized equity and effectively control the restructuring negotiation. A stalking horse is an initial bidder for assets in a bankruptcy sale that sets a floor, and a debtor in possession facility is priming financing extended during the case.8. An analyst is valuing a target company using comparable company analysis. Which multiple is generally preferred over price-to-earnings when comparing firms with materially different capital structures?
- A. Price to earnings, because net income already reflects interest expense
- B. Price to book, because book value ignores leverage
- C. Enterprise value to EBITDA, because it is capital-structure neutral
- D. Dividend yield, because payouts are unaffected by debt
Show answer & explanation
Answer: C
Enterprise value captures both equity and net debt, and EBITDA sits above interest expense, so the ratio compares operating performance without distortion from how a company is financed. Price-to-earnings is computed on net income, which is after interest, so a heavily levered firm looks different from an unlevered peer even when their operations are identical.9. A company has an equity market capitalization of 800 million dollars, total debt of 300 million dollars, and cash of 50 million dollars. What is its enterprise value?
- A. 550 million dollars
- B. 1,050 million dollars
- C. 800 million dollars
- D. 1,150 million dollars
Show answer & explanation
Answer: B
Enterprise value equals equity value plus total debt minus cash and cash equivalents: 800 plus 300 minus 50 equals 1,050 million dollars. Cash is subtracted because an acquirer effectively receives it and can use it to retire debt, so it reduces the true cost of acquiring the operating business.10. In a discounted cash flow analysis, an analyst discounts unlevered free cash flow. Which discount rate is appropriate?
- A. The after-tax cost of debt
- B. The cost of equity
- C. The weighted average cost of capital
- D. The risk-free rate
Show answer & explanation
Answer: C
Unlevered free cash flow is the cash available to all capital providers before financing effects, so it must be discounted at the blended required return of all providers, which is WACC, and it yields enterprise value. Levered free cash flow, which is after interest and belongs to equity holders alone, is discounted at the cost of equity and yields equity value directly.11. An analyst computes a terminal value using the perpetuity growth method with final-year free cash flow of 100 million dollars, a WACC of 10 percent and a perpetual growth rate of 2 percent. What is the terminal value?
- A. 1,000 million dollars
- B. 5,000 million dollars
- C. 1,275 million dollars
- D. 1,250 million dollars
Show answer & explanation
Answer: C
The Gordon growth formula is terminal value equals final-year cash flow times one plus growth, divided by the discount rate minus growth. That is 100 times 1.02 divided by 0.08, which equals 1,275 million dollars. Forgetting to grow the final year cash flow by one period gives 1,250 million, the most common error.12. In an accretion/dilution analysis of an all-stock acquisition, the transaction is generally accretive to the acquirer's earnings per share when which condition holds?
- A. The target's revenue exceeds the acquirer's revenue
- B. The target has a higher price-to-book ratio than the acquirer
- C. The acquirer funds the deal entirely with newly issued debt
- D. The acquirer's price-to-earnings multiple is higher than the target's effective purchase multiple
Show answer & explanation
Answer: D
In a stock-for-stock deal the acquirer issues shares valued at its own multiple to buy earnings priced at the target's multiple. When the acquirer's P/E is the higher of the two, it buys earnings more cheaply than it sells its own, and EPS rises. Relative revenue and book multiples do not determine the arithmetic of the exchange.13. Which valuation methodology typically produces the highest indicated value range for a target company?
- A. Liquidation analysis, because assets are sold individually
- B. Book value analysis, because it reflects historical cost
- C. Comparable company analysis, because it uses current trading multiples
- D. Precedent transaction analysis, because it includes a control premium
Show answer & explanation
Answer: D
Precedent transactions reflect prices actually paid to acquire control of whole companies, which embed a control premium and often synergy expectations, so they generally sit above trading comparables based on minority-interest public prices. Liquidation analysis usually produces the lowest range because it assumes a forced, piecemeal sale.14. A private equity sponsor evaluates a leveraged buyout. Which target characteristic is generally most attractive for supporting a high debt load?
- A. Heavy ongoing research and development requirements
- B. High revenue growth with negative operating margins
- C. Stable, predictable free cash flow
- D. Highly cyclical earnings tied to commodity prices
Show answer & explanation
Answer: C
An LBO services debt from the target's own cash flow, so predictability matters more than growth. Stable cash generation, a defensible market position, modest capital expenditure needs and separable assets all support leverage. Cyclicality and cash-consuming growth increase the risk of a covenant breach during a downturn.15. Under the purchase method of accounting for an acquisition, the excess of purchase price over the fair value of identifiable net assets acquired is recorded as what?
- A. An immediate charge to retained earnings
- B. Additional paid-in capital
- C. A deferred tax liability amortized over fifteen years
- D. Goodwill, an intangible asset tested for impairment rather than amortized
Show answer & explanation
Answer: D
Goodwill captures what the acquirer paid above the fair value of identifiable assets and liabilities, reflecting assembled workforce, brand and expected synergies. Under current US GAAP it is not amortized but is tested at least annually for impairment. A bargain purchase, where fair value exceeds price, produces a gain rather than negative goodwill on the balance sheet.16. An investment banker is preparing a fairness opinion for a target company's board. What does the opinion address?
- A. Whether the transaction will receive antitrust clearance
- B. Whether the target's audited financial statements are free of material misstatement
- C. Whether the consideration to be received is fair, from a financial point of view, to the shareholders
- D. Whether the board has satisfied its fiduciary duties under state law
Show answer & explanation
Answer: C
A fairness opinion speaks only to financial fairness of the consideration and is expressly limited to that question. It is not a legal conclusion about fiduciary duty, not a regulatory prediction and not an audit. Boards obtain one as part of an informed process, but it does not substitute for their own business judgment.17. A bidder acquires beneficial ownership of more than 5 percent of a class of registered equity securities with the intent to seek board representation. Which filing is required and within what general timeframe under the Williams Act framework?
- A. Schedule 13G, only at the end of the calendar year
- B. Schedule 13D, promptly after crossing the threshold
- C. Schedule 14D-9, before acquiring any shares
- D. Form 4, within two business days
Show answer & explanation
Answer: B
Schedule 13D is the activist filing for beneficial owners above 5 percent who do not qualify for the passive short form. Schedule 13G is available to qualified institutions and passive investors with no control intent. Form 4 reports insider transactions by officers, directors and 10 percent holders, and Schedule 14D-9 is the target's response to a tender offer.18. A target company's board receives an unsolicited tender offer. Which schedule must the target file to state its position on the offer?
- A. Schedule TO
- B. Schedule 14D-9
- C. Schedule 13E-3
- D. Form S-4
Show answer & explanation
Answer: B
Schedule 14D-9 is the target's solicitation/recommendation statement, in which the board recommends acceptance, rejection, neutrality or states it is unable to take a position, with reasons. Schedule TO is the bidder's own tender offer statement. Schedule 13E-3 applies to going-private transactions, and Form S-4 registers securities offered in a business combination.19. An issuer files a registration statement that allows it to offer securities from time to time over a period without a separate filing for each offering. What is this called?
- A. Regulation A tier 2 offering
- B. Shelf registration under Rule 415
- C. Rule 144A resale to qualified institutional buyers
- D. Intrastate exemption under Rule 147
Show answer & explanation
Answer: B
Rule 415 shelf registration lets an eligible issuer register an amount of securities and take them off the shelf when market conditions are favorable, which is central to how seasoned issuers time offerings. Rule 147 is the intrastate exemption, Regulation A is a scaled exempt offering, and Rule 144A governs resales of restricted securities to QIBs.20. During the period between filing a registration statement and its effectiveness, an underwriter distributes a preliminary prospectus. What is it commonly called, and what may it not contain?
- A. A tombstone; it omits the issuer's audited financials
- B. A comfort letter; it omits management's discussion and analysis
- C. A red herring; it omits the final offering price and may not be used to accept orders
- D. A final prospectus; it omits only the underwriting syndicate list
Show answer & explanation
Answer: C
The preliminary prospectus, known as a red herring for the legend printed in red, may be used to gauge interest during the waiting period but cannot be used to accept binding orders, and it omits the final price. A tombstone is a limited advertisement identifying the offering, and a comfort letter is an auditor's letter to underwriters on unaudited financial data.21. Regulation M restricts the activities of underwriters and other distribution participants. What is its principal purpose?
- A. To require equal allocation of shares among all retail investors
- B. To prevent manipulation of the market price of a security during its distribution
- C. To require research coverage for a stated period after an offering
- D. To set the maximum underwriting spread on a public offering
Show answer & explanation
Answer: B
Regulation M prohibits distribution participants from bidding for or purchasing the subject security during a restricted period, so the offering price reflects genuine demand rather than support buying. Stabilizing bids are a narrow, disclosed exception. Regulation M does not govern allocation fairness, underwriting economics or research obligations.22. An underwriting syndicate agrees to purchase an entire issue from the issuer and resell it to the public, bearing the risk of unsold shares. What type of commitment is this?
- A. A firm commitment underwriting
- B. A best efforts underwriting
- C. A mini-maxi offering
- D. An all-or-none offering
Show answer & explanation
Answer: A
In a firm commitment the underwriters act as principal, buying the issue outright and taking inventory risk if the deal does not sell. In a best efforts arrangement the underwriter acts as agent and bears no such risk. All-or-none and mini-maxi are contingency variants of best efforts, where the offering is cancelled unless a stated amount is sold.23. An underwriting agreement includes an over-allotment option permitting the syndicate to purchase additional shares from the issuer. What is this option commonly called and what is its typical maximum size?
- A. A greenshoe, typically up to 50 percent of the base offering
- B. A poison pill, typically up to 15 percent of shares outstanding
- C. A greenshoe, typically up to 15 percent of the base offering
- D. A lock-up, typically covering 15 percent of insider holdings
Show answer & explanation
Answer: C
The over-allotment or greenshoe option lets underwriters cover a short position created by selling more than the base deal, usually capped at 15 percent, and it supports aftermarket stabilization. A poison pill is a takeover defense that dilutes a hostile acquirer, and a lock-up restricts insider selling for a period after the offering.24. A company completes an initial public offering. Insiders sign agreements restricting sales of their shares for a period after pricing. What is this restriction called and what is its usual purpose?
- A. A market-out clause, which lets underwriters terminate the offering
- B. A lock-up agreement, which limits aftermarket supply while the stock establishes trading
- C. A no-shop provision, which prevents the issuer from soliciting other underwriters
- D. A standstill agreement, which prevents insiders from voting their shares
Show answer & explanation
Answer: B
A lock-up prevents insiders and pre-IPO holders from selling for a stated period, commonly 180 days, so newly public shares are not overwhelmed by supply. A standstill restricts an acquirer from increasing its stake, a no-shop restricts the target's solicitation of alternative bidders, and a market-out lets underwriters walk away in defined adverse circumstances.25. FINRA rules address conflicts when a member firm participates in a public offering of its own securities or those of an affiliate. What is the general requirement in such a conflicted offering?
- A. Prominent disclosure of the conflict, and in defined cases a qualified independent underwriter must participate
- B. The SEC must set the offering price
- C. The offering may proceed with no disclosure if the affiliate owns less than 50 percent
- D. The offering must be abandoned entirely
Show answer & explanation
Answer: A
FINRA's conflicts of interest rule requires prominent disclosure in the prospectus and, where the conflict is significant, participation of a qualified independent underwriter that performs due diligence and helps establish pricing. The rule manages the conflict through independence and disclosure rather than prohibiting the offering.26. Rules governing research analysts restrict the relationship between research and investment banking. Which practice is prohibited?
- A. Disclosing the firm's ownership position in a covered issuer
- B. Having analysts attend meetings with issuer management
- C. Publishing a research report that recommends selling a banking client's stock
- D. Tying an analyst's compensation to specific investment banking transactions
Show answer & explanation
Answer: D
Research rules bar compensating analysts based on specific banking transactions and bar banking personnel from supervising analysts or pre-approving ratings, so coverage is not effectively purchased. Analysts remain free to publish negative opinions, and disclosure of firm positions and banking relationships is required rather than forbidden.27. An issuer sells securities to accredited investors without registration under Regulation D. What restriction generally applies to the securities the purchasers receive?
- A. They may be resold only to the issuer
- B. They are freely tradable immediately upon issuance
- C. They convert automatically into registered shares after 30 days
- D. They are restricted securities that cannot be freely resold absent registration or an exemption such as Rule 144
Show answer & explanation
Answer: D
Securities sold in a private placement are restricted, meaning resale requires registration or an exemption. Rule 144 provides a safe harbor with conditions on holding period, current public information, volume and manner of sale, with more demanding conditions for affiliates. Rule 144A permits resales to qualified institutional buyers.28. A banker receives material nonpublic information about a pending acquisition and mentions it to a friend, who trades on it. Under insider trading law, how is the banker best described?
- A. A temporary insider with no liability because he did not trade himself
- B. A market maker exempt under an affirmative defense
- C. A tipper, who may be liable along with the tippee who traded
- D. A constructive insider immune from liability absent a personal benefit to the tippee
Show answer & explanation
Answer: C
A tipper who discloses material nonpublic information in breach of a duty can be liable even without trading, and the tippee who trades knowing of the breach can be liable as well. Not trading personally is no defense. Information barriers, restricted lists and watch lists exist precisely to prevent this flow within a firm.29. A firm maintains a list of issuers about which it possesses material nonpublic information, and monitors employee and proprietary trading in those names without publishing the list internally. What is this list called?
- A. A restricted list
- B. A selling group list
- C. A watch list
- D. A grey market list
Show answer & explanation
Answer: C
A watch list is confidential and narrowly circulated, used by compliance to surveil trading without signaling that a deal exists. A restricted list is distributed firm-wide and actively bars proprietary and employee trading and sometimes research publication. Publishing a watch list would itself leak the existence of the engagement.30. Two companies of comparable size combine, with neither treated as clearly acquiring the other and shareholders of both retaining substantial ownership. How is this transaction typically described?
- A. A merger of equals, though accounting rules still require identification of an acquirer
- B. A leveraged recapitalization
- C. A spin-off, because two entities result
- D. A tender offer, because both sets of shareholders tender shares
Show answer & explanation
Answer: A
A merger of equals describes the governance and economics of the deal, but accounting standards still require an acquirer to be identified for purchase accounting purposes, based on factors such as relative voting rights and board composition. A spin-off separates a business into a new entity, and a leveraged recapitalization changes capital structure without a combination.31. A parent company distributes shares of a subsidiary to its own shareholders pro rata, creating a separately traded public company without receiving cash. What is this transaction?
- A. A leveraged buyout
- B. A reverse merger
- C. A spin-off
- D. A carve-out
Show answer & explanation
Answer: C
In a spin-off, the parent distributes subsidiary shares to existing shareholders and receives no proceeds; it can be structured to be tax-free. An equity carve-out sells a minority stake in the subsidiary to the public for cash while the parent retains control. A reverse merger takes a private company public by merging into an existing public shell.32. A target adopts a shareholder rights plan permitting existing holders other than a hostile bidder to buy shares at a discount once the bidder crosses an ownership threshold. What is this defense called?
- A. A Pac-Man defense
- B. A crown jewel defense
- C. A white knight
- D. A poison pill
Show answer & explanation
Answer: D
A poison pill, formally a shareholder rights plan, massively dilutes a hostile acquirer that crosses the trigger, making an unnegotiated purchase prohibitively expensive and forcing the bidder to the board. A white knight is a friendly alternative acquirer, a crown jewel defense sells the most attractive assets, and Pac-Man is a counter-bid for the acquirer.33. A merger agreement contains a provision requiring the target to pay the bidder a fee if the target's board terminates to accept a superior proposal. What is this provision called?
- A. An earn-out
- B. A collar
- C. A break-up fee
- D. A reverse termination fee
Show answer & explanation
Answer: C
A break-up fee compensates the bidder for its costs and deal risk when the target walks, and it also modestly deters competing bids. A reverse termination fee runs the other direction, payable by the buyer, often when financing or antitrust clearance fails. An earn-out defers part of the price contingent on performance, and a collar limits exchange ratio movement.34. In a stock-for-stock merger, the agreement fixes the exchange ratio but provides that the ratio adjusts if the acquirer's share price moves outside a defined band. What is this mechanism called?
- A. A standstill
- B. A collar
- C. A go-shop
- D. A greenshoe
Show answer & explanation
Answer: B
A collar protects both sides from extreme movement in the acquirer's stock between signing and closing by adjusting the exchange ratio or the consideration once the price leaves a specified range. A go-shop is a post-signing window in which the target may actively solicit better offers, and a standstill restricts an investor from accumulating shares.35. Parties to a proposed acquisition exceeding statutory size thresholds must notify US antitrust agencies and observe a waiting period before closing. Under which statute?
- A. The Investment Company Act of 1940
- B. The Sarbanes-Oxley Act
- C. The Hart-Scott-Rodino Antitrust Improvements Act
- D. The Trust Indenture Act of 1939
Show answer & explanation
Answer: C
Hart-Scott-Rodino requires premerger notification to the Federal Trade Commission and the Department of Justice for transactions above adjusted size thresholds, with a waiting period during which the agencies may issue a second request. Sarbanes-Oxley addresses corporate governance and disclosure, and the Trust Indenture Act governs debt indentures.36. A company's income statement shows revenue of 500 million dollars, cost of goods sold of 300 million, operating expenses of 80 million excluding depreciation, depreciation and amortization of 40 million, and interest expense of 20 million. What is EBITDA?
- A. 80 million dollars
- B. 60 million dollars
- C. 160 million dollars
- D. 120 million dollars
Show answer & explanation
Answer: D
Work down to EBIT, then add back the non-cash charges. Revenue of 500 less cost of goods sold of 300 gives gross profit of 200; less operating expenses of 80 gives 120; less depreciation and amortization of 40 gives EBIT of 80 million. EBITDA adds the 40 million of depreciation and amortization back, returning 120 million. Interest is never deducted in reaching EBITDA, so the 20 million is a distractor; stopping at EBIT gives 80 million, the most common error.37. An issuer's underwriters conduct due diligence before an offering. What is the principal legal significance of that process for the underwriters?
- A. It guarantees SEC declaration of effectiveness
- B. It transfers all liability for the registration statement to the issuer
- C. It supports a due diligence defense against Securities Act liability for material misstatements or omissions
- D. It substitutes for the independent audit of the financial statements
Show answer & explanation
Answer: C
Section 11 of the Securities Act imposes liability on underwriters for material misstatements or omissions in a registration statement, and a reasonable investigation is the statutory defense for non-expertised portions. Diligence therefore protects the underwriter as well as investors. It does not shift liability to the issuer and is not a substitute for the audit.38. A company reports net income of 60 million dollars, depreciation of 25 million, an increase in working capital of 15 million, and capital expenditures of 30 million. What is unlevered free cash flow, ignoring tax adjustments to interest?
- A. 100 million dollars
- B. 40 million dollars
- C. 70 million dollars
- D. 25 million dollars
Show answer & explanation
Answer: B
Start with 60 million of net income, add back 25 million of non-cash depreciation to get 85 million, subtract the 15 million increase in working capital to get 70 million, then subtract 30 million of capital expenditures, leaving 40 million. An increase in working capital consumes cash, which is why it is subtracted rather than added.39. An investment bank agrees to sell a client's business through a process in which multiple potential buyers receive a confidential information memorandum and submit bids by a deadline. What is this process called?
- A. A private investment in public equity
- B. A Dutch auction tender offer
- C. A rights offering
- D. A controlled auction
Show answer & explanation
Answer: D
A controlled or broad auction runs a structured competitive process, typically with a teaser, a confidential information memorandum under NDA, indications of interest, management presentations, a data room and final bids, to maximize price and terms. A Dutch auction tender offer is a share repurchase mechanism, and a PIPE is a private placement into an already public company.40. A banker prepares a document sent to prospective buyers before any confidentiality agreement is signed, describing the opportunity without naming the client. What is this document called?
- A. A teaser
- B. A definitive proxy statement
- C. A confidential information memorandum
- D. A comfort letter
Show answer & explanation
Answer: A
A teaser is a brief anonymous summary used to gauge interest before a non-disclosure agreement is executed, deliberately omitting identifying details. The confidential information memorandum follows the NDA and contains detailed financial and operational information. A definitive proxy statement is a public SEC filing soliciting shareholder votes.41. A company issues securities convertible into common stock. When computing diluted earnings per share, how are in-the-money convertible instruments treated?
- A. They are assumed converted, increasing the share count and adjusting the numerator for foregone interest or dividends
- B. They are added to the numerator as additional net income
- C. They reduce the share count because conversion retires debt
- D. They are ignored until actual conversion occurs
Show answer & explanation
Answer: A
Diluted EPS reflects the potential dilution from convertible securities, options and warrants. Under the if-converted method, convertible debt is assumed converted, shares increase and after-tax interest expense is added back to the numerator. Anti-dilutive instruments, those that would raise EPS, are excluded from the calculation.42. An issuer's offering is exempt under Rule 506(b) of Regulation D. Which restriction applies?
- A. The offering is capped at 5 million dollars in any twelve-month period
- B. All purchasers must be non-accredited investors
- C. No general solicitation or general advertising is permitted
- D. The securities become freely tradable immediately
Show answer & explanation
Answer: C
Rule 506(b) permits an unlimited offering amount to unlimited accredited investors and up to 35 sophisticated non-accredited investors, but prohibits general solicitation and advertising. Rule 506(c) permits general solicitation on the condition that all purchasers are accredited and the issuer takes reasonable steps to verify status. Securities under either remain restricted.43. A bank is advising on a sale where the buyer will pay part of the price only if the acquired business hits defined performance targets after closing. What is this structure called?
- A. An earn-out
- B. A recapitalization
- C. A stock swap
- D. A tender offer
Show answer & explanation
Answer: A
An earn-out defers part of the consideration and conditions it on post-closing performance, bridging a valuation gap when buyer and seller disagree about the outlook. It shifts risk to the seller and commonly generates disputes over how the business is run during the measurement period, which is why the metrics and operating covenants are negotiated carefully.44. Under FINRA rules, a registered representative wishes to open a securities account at another member firm. What is generally required?
- A. Prior written notice to the employing member, and notice to the executing member of the association
- B. Approval from the SEC before the account is opened
- C. No notice, because outside accounts are the representative's private affair
- D. The account may only be opened at the employing firm
Show answer & explanation
Answer: A
Rules on accounts at other broker-dealers require the associated person to notify the employer in writing and to inform the executing firm of the association, so both firms can supervise and duplicate confirmations can be provided. The requirement exists to make personal trading visible to compliance, which matters especially where the person may access deal information.45. A company with 40 million shares outstanding trading at 25 dollars announces a two-for-one stock split. Ignoring market reaction, what are the shares outstanding and price immediately after?
- A. 40 million shares at 12.50 dollars
- B. 80 million shares at 25 dollars
- C. 80 million shares at 12.50 dollars
- D. 20 million shares at 50 dollars
Show answer & explanation
Answer: C
A two-for-one forward split doubles the share count and halves the price, leaving market capitalization unchanged at 1 billion dollars. A reverse split does the opposite, reducing share count and raising price, and is often used to regain exchange listing compliance. Neither changes the economic value of a holder's position by itself.46. An investment bank commits to purchase a block of a client's shares at a negotiated price and then resell them into the market, taking the resale risk. What is this transaction called?
- A. A rights offering
- B. An at-the-market program
- C. An agency cross
- D. A bought deal or block trade
Show answer & explanation
Answer: D
In a bought deal the bank acts as principal, guaranteeing the seller a price and assuming the risk that the market moves before the block is placed. An agency cross matches buyer and seller without principal risk. A rights offering gives existing shareholders the right to buy new shares, and an at-the-market program dribbles stock into the market over time.47. A firm's investment banking department must be separated from its sales and trading desk to prevent the flow of material nonpublic information. What is this separation commonly called?
- A. An information barrier, historically called a Chinese wall
- B. A safe harbor under Rule 10b5-1
- C. A firewall exemption under Regulation S-P
- D. A prudent man standard
Show answer & explanation
Answer: A
Information barriers are policies, physical separation, system access controls and supervisory procedures that stop deal information from reaching trading and research. Rule 10b5-1 provides an affirmative defense through pre-established trading plans, and Regulation S-P concerns customer privacy, neither of which addresses internal segregation of deal information.48. A public company wants to repurchase shares in the open market with a safe harbor against manipulation claims. Which rule provides conditions on manner, timing, price and volume?
- A. Rule 415
- B. Rule 10b5-1
- C. Rule 10b-18
- D. Rule 144A
Show answer & explanation
Answer: C
Rule 10b-18 is a non-exclusive safe harbor for issuer repurchases, conditioned on using a single broker per day, timing restrictions, price limits and a daily volume cap. Rule 10b5-1 addresses trading while aware of material nonpublic information through pre-set plans. Rule 144A governs institutional resales and Rule 415 governs shelf registration.49. A company files a Form 8-K. What does this filing generally report?
- A. Beneficial ownership by a 5 percent holder
- B. Unaudited quarterly financial statements
- C. Audited annual financial statements
- D. A material current event occurring between periodic reports
Show answer & explanation
Answer: D
Form 8-K is the current report for material events such as entry into a definitive material agreement, completion of an acquisition, departure of directors or officers, or results of operations announcements. Form 10-K carries audited annual statements, Form 10-Q carries quarterly statements, and Schedule 13D or 13G reports 5 percent beneficial ownership.50. In a leveraged buyout model, a sponsor invests 400 million dollars of equity and exits five years later with equity proceeds of 1,200 million dollars. What is the multiple of invested capital?
- A. 8.0 times
- B. 3.0 times
- C. 0.33 times
- D. 2.0 times
Show answer & explanation
Answer: B
Multiple of invested capital is exit equity proceeds divided by equity invested: 1,200 divided by 400 equals 3.0 times. MOIC ignores the holding period, which is why sponsors also compute an internal rate of return; a 3.0 times return over five years is a materially better IRR than the same multiple over ten.51. A banker is asked whether a proposed acquisition should be paid for in cash or stock, all else equal. Which consideration favors stock from the acquirer's perspective?
- A. The acquirer believes its own shares are richly valued
- B. The acquirer wants to avoid diluting existing shareholders
- C. The acquirer has substantial idle cash earning little
- D. The acquirer wants to avoid a shareholder vote
Show answer & explanation
Answer: A
Issuing stock is cheapest when the acquirer's shares are expensive, because it is effectively selling equity at a high price to fund the purchase. Cash avoids dilution, deploys idle balances, and typically avoids the acquirer shareholder vote and registration that a large stock issuance can trigger, so each of the other considerations points toward cash.52. Which document in an M&A transaction is a non-binding outline of principal terms signed before definitive documentation, typically with a few binding provisions such as exclusivity and confidentiality?
- A. The definitive merger agreement
- B. The disclosure schedules
- C. The proxy statement
- D. A letter of intent or term sheet
Show answer & explanation
Answer: D
A letter of intent sets out price, structure and timetable without binding the parties to complete, while carving out binding exclusivity, confidentiality and expense provisions. The definitive agreement contains the binding obligations, representations and covenants; disclosure schedules qualify those representations, and the proxy statement solicits the shareholder vote.53. A merger agreement permits the target's board to change its recommendation if required by fiduciary duty in light of a superior proposal. What is this provision called?
- A. A material adverse change condition
- B. A no-shop covenant
- C. A fiduciary out
- D. A tail provision
Show answer & explanation
Answer: C
A fiduciary out preserves the board's ability to respond to a genuinely superior proposal despite a no-shop covenant, usually paired with matching rights and a break-up fee. A material adverse change condition allows a buyer to walk if the target's business deteriorates severely, and a tail provision entitles a banker to a fee if a deal closes shortly after the engagement ends.54. A bank's engagement letter provides for a fee if the client completes a sale to any party contacted during the engagement, even if closing occurs within twelve months after termination. What is this provision?
- A. A right of first refusal
- B. A retainer credit
- C. An indemnity
- D. A tail provision
Show answer & explanation
Answer: D
A tail protects the banker from being terminated shortly before a deal it sourced closes, typically running six to twenty-four months and limited to identified counterparties. A retainer credit offsets a periodic fee against the success fee, and the indemnity shifts certain litigation costs to the client. None of the others addresses post-termination compensation.55. An analyst compares two firms and finds Company A has a beta of 1.4 while Company B has a beta of 0.7. Holding other inputs constant, what does this imply for the cost of equity under the capital asset pricing model?
- A. Company A has the higher cost of equity because its returns are more sensitive to market moves
- B. Neither cost of equity can be estimated without the dividend payout ratio
- C. Both have identical costs of equity because beta affects only the debt component
- D. Company B has the higher cost of equity because lower beta signals distress
Show answer & explanation
Answer: A
CAPM sets cost of equity equal to the risk-free rate plus beta times the equity risk premium, so a higher beta directly produces a higher required return. Beta measures systematic risk, the portion that cannot be diversified away. The dividend payout ratio is an input to the dividend discount model, not to CAPM.56. A company has a cost of equity of 12 percent, a pre-tax cost of debt of 6 percent, a 25 percent tax rate, and a capital structure of 60 percent equity and 40 percent debt. What is its weighted average cost of capital?
- A. 10.8 percent
- B. 9.6 percent
- C. 7.2 percent
- D. 9.0 percent
Show answer & explanation
Answer: D
The equity component is 0.60 times 12 percent, or 7.2 percent. The debt component uses the after-tax cost: 6 percent times one minus 0.25 equals 4.5 percent, and 0.40 times 4.5 percent is 1.8 percent. Adding the two gives 9.0 percent. Forgetting the tax shield on debt yields 9.6 percent, the most common error.57. Which of the following is generally the least reliable indicator of value when analyzing a mature manufacturing business?
- A. Book value of equity, because it reflects historical cost rather than economic value
- B. Precedent transaction multiples
- C. Discounted cash flow, because it is based on projected cash generation
- D. Comparable company trading multiples
Show answer & explanation
Answer: A
Book value records assets at depreciated historical cost and omits internally generated intangibles, so it rarely approximates what a buyer would pay for an operating business. It remains relevant for asset-heavy financial institutions and in liquidation analysis. The three market and cash-flow based methods are the standard triangulation for an operating company.58. A registered representative of a member firm wants to participate in a private securities transaction outside the scope of employment. What must the representative do?
- A. Provide prior written notice to the member and, if compensated, obtain written approval before participating
- B. Resign from the member firm before participating
- C. Nothing, provided the transaction involves only accredited investors
- D. Notify the SEC directly within thirty days after the transaction
Show answer & explanation
Answer: A
Rules on private securities transactions require prior written notice describing the proposed transaction and the person's role. Where the person will receive selling compensation, the firm must approve or disapprove in writing, and an approved transaction is recorded on the firm's books and supervised. Participating without notice is selling away, a serious violation.59. An issuer conducts a rights offering. What are existing shareholders receiving?
- A. The right to sell shares back to the issuer at a premium
- B. An obligation to purchase additional shares at market price
- C. A cash distribution equal to the offering proceeds
- D. The right to purchase additional shares, usually below market price, in proportion to current holdings
Show answer & explanation
Answer: D
A rights offering gives existing holders a short-dated, usually transferable right to subscribe for new shares at a discount pro rata, which lets them avoid dilution. The rights themselves have value and can typically be sold if the holder does not wish to subscribe. Nothing obligates a shareholder to participate.60. A customer verbally tells his registered representative to 'use your judgment' on timing and price for trades in his account going forward, without specifying particular securities or amounts in advance. What must be in place before the representative may exercise this discretion?
- A. Nothing further, since the customer's verbal statement itself grants full discretion
- B. Approval from a second registered representative on the same desk
- C. Written authorization from the customer and the firm's prior acceptance of the account as discretionary
- D. A one-time email confirmation sent after each trade is placed
Show answer & explanation
Answer: C
Exercising discretion over the time and price of trades, even without discretion over the specific security or amount, still requires written authorization from the customer along with the firm's acceptance of the account as discretionary before the representative may act on that authority; a verbal instruction alone, a post-trade email, or a peer's approval do not satisfy the documentation requirement.61. A firm places an issuer on its restricted list while the firm is engaged to underwrite the issuer's public offering. Which activity is generally curtailed for the firm during this period?
- A. Processing routine account transfers for unrelated customers
- B. Opening new brokerage accounts for existing retail customers
- C. Publishing new research coverage or recommendations on the restricted issuer
- D. Executing unsolicited customer orders in unrelated securities
Show answer & explanation
Answer: C
A restricted list identifies issuers for which the firm has a current investment banking relationship or material nonpublic information, and the firm curtails activities like issuing new research or proprietary trading recommendations on that issuer to avoid conflicts and the appearance of using confidential information; unrelated customer account activity is unaffected.62. A branch supervisor discovers that a customer's spouse, who has no trading authorization on file, has been entering orders in the customer's account for several months. What should the firm require before permitting the spouse to continue placing orders?
- A. Conversion of the account to a joint account without further documentation
- B. Nothing further, since a spousal relationship implies authority to trade the account
- C. Written trading authorization from the customer naming the spouse, filed before further orders are accepted
- D. A verbal acknowledgment from the customer during the next phone call
Show answer & explanation
Answer: C
Allowing a person without documented authority to enter orders exposes the firm to unauthorized trading liability regardless of the person's relationship to the account holder; firms must obtain written authorization identifying who may act on the account before permitting continued third-party order entry, since verbal consent or an assumed relationship does not satisfy that requirement.63. An internal review finds that a customer's account has generated commissions far exceeding what the customer's stated investment objectives and account size would justify, driven by a pattern of frequent, unnecessary trades. This pattern most closely describes which prohibited practice?
- A. Parking securities to conceal ownership
- B. Marking the close to influence a security's closing price
- C. Churning the account to generate commissions
- D. Front running a large institutional order
Show answer & explanation
Answer: C
Excessive trading in a customer's account, driven primarily by generating commissions rather than serving the customer's investment objectives, is the hallmark of churning; the other choices involve concealing ownership, manipulating a closing price, or trading ahead of a known pending order, none of which match a pattern of unsuitable overtrading for commission generation.64. A sales trader learns that the firm's institutional desk is about to execute a large block order expected to move the market price of a stock. Before the block is placed, the trader executes a personal trade in the same stock to profit from the anticipated price move. What is this conduct called?
- A. Front running
- B. Permissible pre-hedging disclosed to the client
- C. Riskless principal trading
- D. Legitimate proprietary hedging
Show answer & explanation
Answer: A
Trading ahead of a known, imminent order using advance knowledge of its market impact for personal gain is front running, a prohibited practice distinct from riskless principal trading, which simply offsets a customer trade at cost, or disclosed hedging arrangements agreed with the client in advance; here the trade is undisclosed and self-interested.65. Two bonds carry the same coupon rate and credit quality, but Bond X matures in three years and Bond Y matures in twenty years. If market interest rates rise by the same amount for both, which statement about their price change is most accurate?
- A. Bond Y will fall in price by a larger percentage because its longer maturity gives it greater duration and interest-rate sensitivity
- B. Both bonds will fall by exactly the same percentage because their coupon rate is identical
- C. Bond X will fall in price by a larger percentage because it has less time to maturity
- D. Neither bond's price will change because their credit quality is identical
Show answer & explanation
Answer: A
Duration increases with time to maturity, and bonds with higher duration experience larger percentage price changes for a given change in interest rates; since Bond Y has the longer maturity, it will experience the larger price decline, while identical coupon and credit quality do not offset the maturity-driven duration difference.66. A company sells newly issued common shares directly to investors through an underwritten public offering, with the sale proceeds credited to the company's balance sheet. In which market does this initial sale of shares occur?
- A. The secondary market
- B. The dealer-only over-the-counter market
- C. The dark pool market
- D. The primary market
Show answer & explanation
Answer: D
The primary market is where issuers sell newly created securities directly to investors and receive the proceeds; subsequent trading among investors, which does not generate proceeds for the issuer, occurs in the secondary market, and neither the dealer-only OTC market nor dark pools describe an issuer's initial sale of new shares.67. In a large underwritten securities offering with multiple syndicate members, one firm is responsible for maintaining the order book, allocating shares among syndicate members, and coordinating aftermarket stabilization activities. What is this firm's role commonly called?
- A. Prime broker
- B. Selling group member
- C. Lead bookrunner
- D. Transfer agent
Show answer & explanation
Answer: C
The lead bookrunner runs the books for an offering, deciding share allocations among syndicate members and coordinating stabilization in the aftermarket; a selling group member has a more limited distribution role without managing the book, and a transfer agent or prime broker perform unrelated administrative or financing functions.68. A corporation issues a bond that it may redeem prior to maturity once market interest rates decline enough to make refinancing attractive. From the perspective of an investor holding this callable bond, which risk is most directly increased by the call feature?
- A. Default risk, because callable bonds inherently carry weaker credit protections
- B. Currency risk, because early redemption changes the currency of the cash flows
- C. Reinvestment risk, because the bond is more likely to be redeemed early when rates have fallen, forcing the investor to reinvest proceeds at lower yields
- D. Liquidity risk exclusively, with no effect on interest rate exposure
Show answer & explanation
Answer: C
Issuers call bonds when rates have fallen far enough that refinancing at a lower rate is attractive, which is precisely when reinvesting the returned principal at a comparable yield becomes hardest for the investor; the call feature does not itself alter currency exposure or credit quality, and its effect is on reinvestment risk rather than being purely a liquidity concern.69. An investor purchases convertible preferred stock issued by a growth company. Which combination of features generally describes this security?
- A. A senior secured claim with mandatory principal redemption and no equity feature
- B. A variable dividend tied to the issuer's common stock price with no conversion right
- C. A fixed dividend payment with the ability to convert into common stock and participate in equity upside
- D. A pure equity instrument carrying voting control with no fixed payment
Show answer & explanation
Answer: C
Convertible preferred stock combines a fixed preferred dividend with an option to convert into common shares, giving the holder downside protection relative to common stock along with participation in equity appreciation if the common stock performs well; it is not a secured debt instrument, does not carry mandatory redemption by default, and its dividend is fixed rather than variable.70. A leveraged buyout is financed with a senior secured term loan, senior unsecured notes, and subordinated mezzanine debt. Relative to the senior secured term loan, which statement about the mezzanine tranche is generally true?
- A. It has no interest cost because it is treated as equity for all purposes
- B. It carries a lower interest rate because it is repaid first in a default
- C. It carries a higher interest rate to compensate for its lower priority of claim in a default
- D. It has identical priority of claim and identical collateral protection
Show answer & explanation
Answer: C
Mezzanine debt sits below senior secured and senior unsecured debt in priority of repayment, so it bears greater risk of loss in a default and commands a higher interest rate as compensation, often paired with equity-like features; it is not repaid ahead of senior secured debt, does not share identical collateral protection, and typically does carry a stated interest cost even though it may include equity kickers.71. A floating-rate note pays a coupon that resets periodically to a reference rate plus a fixed spread. Compared with a fixed-rate note of the same maturity and credit quality, how does the floating-rate note's price generally react to a rise in market interest rates?
- A. It falls by a larger percentage than the fixed-rate note
- B. It is unaffected by changes in the reference rate
- C. It falls by roughly the same percentage as the fixed-rate note
- D. It fluctuates much less than the fixed-rate note, because periodic coupon resets keep the note's yield close to current market rates
Show answer & explanation
Answer: D
Because a floating-rate note's coupon resets periodically to track the reference rate, its price stays close to par as market rates change, unlike a fixed-rate note whose unchanging coupon causes its price to move more significantly when rates shift; the note is not immune to rate changes altogether, and its price sensitivity is materially lower, not equal to or greater than, that of a comparable fixed-rate note.72. A special purpose acquisition company raises capital in an IPO and places the proceeds in a trust account to fund a future business combination. If the company fails to complete an acquisition within its specified deadline, what generally happens to the trust proceeds attributable to public shareholders?
- A. They are returned to public shareholders on a pro rata basis as the company liquidates
- B. They are forfeited entirely to the sponsor
- C. They are donated to a charitable foundation designated by the sponsor
- D. They automatically convert into equity of a shell successor company
Show answer & explanation
Answer: A
A special purpose acquisition company's trust structure is designed so that if no qualifying acquisition closes within the deadline, the company liquidates and returns the trust proceeds to public shareholders on a pro rata basis, which is the core investor protection of the structure; the proceeds are not forfeited to the sponsor, converted into shell equity, or diverted to charity under this scenario.73. An investor is deciding between purchasing an American depositary receipt representing shares of a foreign company or purchasing the underlying foreign ordinary shares directly on the foreign exchange. Which consideration is reduced, though not eliminated, by choosing the depositary receipt?
- A. The settlement, custody and cross-border trading complexity of holding the foreign shares directly
- B. The issuer's underlying business and credit risk
- C. Currency risk from the underlying shares being denominated in a foreign currency
- D. General market risk affecting the underlying company's stock price
Show answer & explanation
Answer: A
A depositary receipt is a domestically traded instrument backed by foreign shares held by a depositary, so it simplifies settlement, custody, and trading logistics compared with holding the foreign shares directly on a foreign exchange; it does not eliminate currency exposure, issuer credit risk, or general market risk associated with the underlying company, since the receipt's value still moves with the underlying shares and currency.74. A distressed debt investor buys bonds of a financially troubled company at a steep discount to par, expecting recovery through a restructuring. Which factor most directly determines the investor's ultimate recovery on those bonds?
- A. The original purchase price the investor paid relative to par value
- B. The enterprise value available for distribution in the restructuring relative to the bonds' priority of claim in the capital structure
- C. The stated coupon rate printed on the bonds at issuance
- D. The length of time the investor holds the bonds before restructuring concludes
Show answer & explanation
Answer: B
Recovery in a restructuring is driven by how much enterprise value exists to distribute and where the investor's claim ranks against other creditors, since value is allocated according to priority until it is exhausted; the coupon rate, holding period, and the investor's own purchase price affect the investor's return but do not determine how much the underlying claim actually recovers in the restructuring.75. During the period before a registration statement for an IPO becomes effective, the underwriters avoid issuing research reports or making public statements about the issuer beyond the information contained in the filed registration statement. What regulatory concern does this practice primarily address?
- A. Complying with withholding tax requirements on offering proceeds
- B. Avoiding antitrust concerns among competing underwriters
- C. Avoiding 'gun jumping' by conditioning the market with information outside the registration statement before it is effective
- D. Preventing insider trading by underwriter employees ahead of the offering
Show answer & explanation
Answer: C
Publicity about an issuer before or during the registration process that goes beyond the filed registration statement risks improperly conditioning the market for the securities ahead of effectiveness, commonly called gun jumping; the practice is not primarily aimed at preventing employee insider trading, resolving antitrust issues among underwriters, or satisfying tax withholding rules.76. A public company's investor relations officer privately tells a group of favored research analysts about a significant unannounced change in expected quarterly earnings, without making the same disclosure to the public. Which regulatory principle does this conduct most directly implicate?
- A. Regulation M's restrictions on trading during a distribution
- B. The Williams Act's tender offer disclosure requirements
- C. Regulation D's exemption conditions for private placements
- D. Regulation FD's prohibition on selectively disclosing material nonpublic information without simultaneous public disclosure
Show answer & explanation
Answer: D
Regulation FD is designed to prevent issuers from selectively disclosing material nonpublic information to select analysts or investors without making broad public disclosure at the same time; this scenario does not involve a securities distribution subject to Regulation M, a tender offer under the Williams Act, or a private placement exemption under Regulation D.77. Under Regulation AC, a research analyst who publishes a research report on a covered company must generally include a certification addressing what?
- A. That the SEC has reviewed and approved the substance of the report
- B. That the analyst has no prior relationship of any kind with the company covered
- C. That the views expressed reflect the analyst's own personal views and whether the analyst's compensation was tied to specific recommendations in the report
- D. That the recommendations in the report are guaranteed to be accurate
Show answer & explanation
Answer: C
Regulation AC requires research analysts to certify that the views expressed in a report reflect their own personal views and to disclose whether their compensation was related to the specific recommendations or views in the report; it does not require SEC pre-approval of report content, an absolute absence of any relationship with the covered company, or a guarantee of accuracy.
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Key facts: Series 79 exam
The Series 79 is administered by FINRA, with 75 scored questions, a 2 hours 30 minutes time limit and a passing score of 73%.
This free Series 79 practice test has 77 original questions written to FINRA's official content outline, last checked against it on August 6, 2026. Every question shows a worked explanation, and nothing here requires a signup.
As of 2026, the Series 79 exam fee is $395.
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Official sources
Primary documents used to verify the exam details shown on this page.
- Occupational Employment and Wage Statistics, May 2025 — Securities, Commodities, and Financial Services Sales Agents (SOC 41-3031)U.S. Bureau of Labor Statisticsbls.goveffective May 31, 2025
- Series 79 Exam OverviewFINRAfinra.org
- Securities Industry Essentials (SIE) ExamFINRAfinra.org
- Series 79 Investment Banking Representative Qualification Exam Content OutlineFINRAfinra.org
- FINRA Continuing Education — Regulatory ElementFINRAfinra.org
- FINRA Rule 1220 — Registration Categories (Investment Banking Representative)FINRAfinra.org
Last verified against the official exam content outline:
Frequently asked questions
Do these free Series 79 practice questions match the real exam?
They are written to mirror the style and topic coverage of the actual Series 79: scenario-based questions on valuation, M&A, registration rules, and deal mechanics in the same multiple-choice format FINRA uses. No practice set duplicates the real exam word for word, but drilling questions in the same format trains the pattern recognition the test rewards. Treat them as a diagnostic and a rehearsal, not a memorization target.
How many Series 79 practice questions should I do, and how often?
Aim for a steady daily habit, such as 20 to 30 questions a day, rather than occasional marathon sessions. As your exam date approaches, add full timed sets of 75 questions so your stamina and pacing match the real test's length. Consistent daily reps beat cramming for retention on a rules-heavy exam like this.
How should I use the answer explanations?
Read the explanation for every question, including the ones you got right, because a lucky guess is a hidden weakness. For each miss, identify whether you lacked the rule, misread the scenario, or fell for a distractor, and note the topic for review. The explanations are where the actual learning happens; the question itself is just the trigger.
How do I know when I'm ready to sit the Series 79?
A common readiness signal is consistently scoring comfortably above the passing score of 73 on full-length timed practice sets, across multiple attempts on fresh questions. If your scores only clear that bar on questions you've seen before, keep studying with new material. Also check that no single topic area is dragging far below the others, since a weak section can sink an otherwise solid attempt.
Are these Series 79 practice questions really free, with no signup?
Yes, the practice questions on this page are completely free and you don't need to create an account or enter an email to use them. You can start answering immediately and see explanations right away. Use them as often as you like while you prepare.
Should I practice under timed conditions?
Yes, at least some of the time, because pacing is part of the skill the exam tests. With 2 hours and 30 minutes for the scored portion, you have about two minutes per question, and timed practice teaches you when to flag a hard question and move on. Mix untimed learning sessions early in your prep with timed simulations closer to test day.