Free FINRA Series 79 Investment Banking Representative Exam Practice Questions

Sample Practice Questions

Try these 10 sample questions from the FINRA Series 79 Investment Banking Representative Exam practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1An analyst needs a domestic public company's audited annual financial statements and discussion of its business risks. Which filing is the direct source?

   1. A. Form 8-K current report
   2. B. Form 10-K annual report
   3. C. Form 10-Q quarterly report
   4. D. Schedule 13G ownership report

   Answer: B

   Explanation: The SEC describes the 10-K as an "Annual report – Provides audited annual financial statements, a discussion of material risk factors for the company and its business". That matches the annual audited statements and risk discussion sought.

   Reference: Using EDGAR to Research Investments — Financial Information and Results of Operations, Form 10-K

2. 2Before a company may offer securities for sale in a registered public offering, what must it file with the SEC?

   1. A. A registration statement.
   2. B. A completed proxy vote.
   3. C. A Form 13F holdings report.
   4. D. A final syndicate account.

   Answer: A

   Explanation: The SEC says a company must "file a registration statement with the SEC before it may offer its securities for sale." This is the pre-offer filing.

   Reference: Going Public — How can my company raise capital through a registered public offering?

3. 3At the setup of a sell side M&A process, which agreement does the banker prepare, negotiate, and finalize with the seller?

   1. A. The engagement letter
   2. B. The buyer's credit agreement
   3. C. The final purchase agreement between buyers
   4. D. The bidder's debt commitment letter

   Answer: A

   Explanation: The outline identifies "Preparation, negotiation and finalization of the engagement letter with the seller" as a sell side setup task. The other agreements serve financing or execution between different parties.

   Reference: FINRA Series 79 Content Outline — Function 3.1, Setup of the process, page 12

4. 4Which filing provides a domestic public company's unaudited quarterly financial statements and management's discussion of the prior fiscal quarter?

   1. A. Form 10-Q quarterly report
   2. B. Form 10-K annual report
   3. C. Form 8-K current report
   4. D. Form 13F-HR manager report

   Answer: A

   Explanation: The SEC calls the 10-Q a "Quarterly report – Provides unaudited quarterly financial statements" and says it includes management's discussion of results for the prior fiscal quarter.

   Reference: Using EDGAR to Research Investments — Financial Information and Results of Operations, Form 10-Q

5. 5A registration statement has been filed but has not been declared effective. May the issuer sell the covered securities under that statement?

   1. A. Yes, immediately after filing.
   2. B. Yes, once a road show begins.
   3. C. No, not until effectiveness.
   4. D. No, until the next annual report.

   Answer: C

   Explanation: The SEC says the company "may not actually sell the securities covered by the registration statement until the SEC staff declares the registration statement" effective. Filing or beginning a road show is not enough to sell the covered securities.

   Reference: Going Public — How can my company raise capital through a registered public offering?

6. 6A seller is choosing how to transfer its business in an M&A process. Which structural comparison is specifically part of the sell side review?

   1. A. Stock sale versus asset sale
   2. B. Debt coupon versus dividend yield
   3. C. Fixed fee versus selling concession
   4. D. Operating margin versus net margin

   Answer: A

   Explanation: The outline includes "Identification and assessment of potential transaction structures (e.g., stock versus asset sale," as a sell side task. The other comparisons are financing or financial metrics, rather than transaction structures for selling a business.

   Reference: FINRA Series 79 Content Outline — Function 3.1, Setup of the process, page 12

7. 7An analyst wants a company's disclosure of a material event before its next scheduled annual or quarterly report. Which filing should the analyst check?

   1. A. Form 10-K annual report
   2. B. Form 10-Q quarterly report
   3. C. Form 8-K current report
   4. D. Schedule 13D beneficial ownership report

   Answer: C

   Explanation: The SEC describes the 8-K as a "Current report – Discloses material events or information" made public before the next scheduled quarterly or annual report.

   Reference: Using EDGAR to Research Investments — Financial Information and Results of Operations, Form 8-K

8. 8Which principal part of a registration statement is the legal offering document delivered to those offered or buying the securities?

   1. A. Part I, the prospectus.
   2. B. Part II, the exhibits.
   3. C. The issuer's annual report.
   4. D. The underwriter's deal file.

   Answer: A

   Explanation: The SEC says "Part I is the prospectus" and identifies it as the legal offering or selling document delivered to investors.

   Reference: What is a Registration Statement? — Registration statements, Part I

9. 9In evaluating a proposed sell side transaction, with which advisers does the banker coordinate to identify potential tax issues and their financial implications?

   1. A. The seller's tax advisers
   2. B. The buyer's transfer agent
   3. C. The syndicate's stabilization desk
   4. D. The issuer's public relations staff

   Answer: A

   Explanation: The outline calls for "Coordination with the seller’s tax advisors to identify potential tax issues and their financial" implications. Transfer and syndicate roles do not replace those advisers for tax analysis.

   Reference: FINRA Series 79 Content Outline — Function 3.1, Setup of the process, page 12

10. 10For a public company's shareholder meeting, which filing is the final proxy statement sent to shareholders?

    1. A. PRE 14A preliminary statement
    2. B. DEF 14A definitive statement
    3. C. SC 13D ownership statement
    4. D. 13F-HR manager statement

    Answer: B

    Explanation: The SEC defines DEF 14A as the "Definitive proxy statement – The final proxy statement sent to the company’s shareholders" in connection with the meeting.

    Reference: Using EDGAR to Research Investments — Shareholder Meetings, Form DEF 14A