Author: The Solomon Exam Prep Team

How to Pass the FINRA Series 79 Exam

What can you do with a Series 79 license? What is the exam like and how should you prepare for it? Solomon answers your top Series 79 questions. Continue reading

What does the Series 79 exam permit me to do?

The Series 79, also known as the Limited Representative Investment Banking Exam, was developed by the Financial Industry Regulatory Authority (FINRA) to assess the skills and competency of entry-level investment bankers. If you work for a FINRA member firm as an investment banker, you must pass the Series 79 exam and register as an Investment Banking Representative. Although the Series 79 is designed for junior-level bankers, it proves to be one of the most difficult exams offered by FINRA, particularly for test-takers who do not have education and work experience in accounting and finance. In addition, the Series 79 exam requires a broad knowledge of the rules, regulations and industry practices that govern US capital markets and investment banking.

Passing the Series 79 exam qualifies you to advise on and/or facilitate the following:  

    • Debt and equity offerings (private placement or public offering)
    • Mergers and acquisitions
    • Tender offers
    • Financial restructurings
    • Asset sales
    • Divestitures or other corporate reorganizations
    • Business combination transactions
Do I need to take any other securities licensing exams?

According to FINRA, the Series 79 does NOT cover sales or marketing of debt or equity securities to investors or potential investors. In order to make investor presentations, an investment banker with the Series 79 registration would also need to be “registered as a General Securities Representative (Series 7), Corporate Securities Representative (Series 62), or Private Securities Offerings Representative (Series 82) depending on the type of offering being made.”

You are also required to take the FINRA Securities Industry Essentials (SIE) exam, unless you have passed certain other licensing exams (such as the Series 7 or Series 82) before October 1st, 2018.

Additionally, in order to comply with state securities regulations, most individuals with the Series 79 registration pass the NASAA Series 63 exam as well. Check with your firm’s compliance officer to determine if this registration applies to you.

About the Exam

The Series 79 exam consists of 75 scored and 10 un-scored multiple-choice questions covering the three main sections of the FINRA Series 79 content outline. The exam itself is not divided into three sections, so questions from each section appear randomly throughout the exam. The 10 additional un-scored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam.

Note: Scores are rounded down to the next lowest whole number (e.g. 72.9% would be a final score of 72% – not a passing score for the Series 79 exam).

Topics Covered on the Exam

The questions on the Series 79 exam cover the major job functions of entry-level investment bankers, as determined by FINRA:

FINRA updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the FINRA Series 79 Content Outline and use it in conjunction with the Solomon Series 79 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

FINRA and SEC Rule Numbers: What Should You Remember?

The Solomon Exam Prep Series 79 Study Guide introduces you to several different rules instituted by both FINRA and the SEC. While learning about these rules is important, the exam will not ask for specific FINRA rules, so you do not need to memorize those rule numbers. Instead, you should learn and understand the content of those rules. FINRA rules are generally distinguished by having four numbers (i.e., Rule 1250 or Rule 2241).

On the other hand, it is essential that you remember the content, and sometimes the names, of the SEC rules and regulations covered in the Solomon Series 79 Study Guide. In general, SEC rule numbers consist of either (1) three numbers (e.g., Rule 144) or (2) two numbers and a letter, followed by another number or a dash (e.g., Rule 10b-9, or Rule 15c1-3). Also, remember the names of regulations with letters associated with them, such as Regulation A.

Math and Accounting on the Series 79 Exam

Questions on the Series 79 exam do require you to use arithmetic, ratios, and basic algebra. Also, because the Series 79 exam requires you to understand and be able to analyze financial statements, a basic understanding of financial accounting is very helpful.

Question Types on the Exam

The Series 79 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

Which type of SEC filing would you look at to determine the holdings of a large investment manager?

    1. Form 13F
    2. Schedule 14A
    3. Form 4
    4. Form 8-K
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

If a company were to liquidate all its assets and pay off all its liabilities, the amount that would be left is:

    1. Shareholders’ equity
    2. Retained earnings
    3. Paid-in capital
    4. Long-term debt
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

All of the following are characteristics of a hedge fund, except:

    1. They often do not need to register with the SEC.
    2. They are a highly liquid form of investment.
    3. They are generally lightly regulated when compared to other types of investments.
    4. Their members or investors are institutions or wealthy individual investors.
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

You are analyzing a public company and your analysis requires you to compile LTM (last 12 months) financial data for the company. Which of the following SEC filings would you typically look to for such data?

    1. Form 10-K
    2. Schedule 13D
    3. Form 10-Q
    4. Form 3
    1. I and II
    2. II and III
    3. III and IV
    4. I and III

This format is also used in items that ask you to rank or order a set of items from highest to lowest (or vice versa), or to place a series of events in the proper sequence.

In marketing a proposed acquisition, a sell-side investment banker typically provides the following materials to prospective buyers in which order?

    1. Confidentiality agreement
    2. Teaser
    3. Bidding procedures letter
    4. Confidential information memorandum
    1. I, II, IV, III
    2. III, II, I, IV
    3. II, III, I, IV
    4. II, I, IV, III

Answers: A, A, B, D, D

For an even better idea of the possible question types you might encounter on the Series 79 exam, try Solomon Exam Prep’s free Series 79 Sample Quiz.

Test-Taking Tips for the Series 79 Exam

If taking the test at a test center, you will be given a dry erase pen and whiteboard or a pencil and scratch paper, a basic electronic calculator, and an Exhibits Book. The Exhibits Book may be presented on your computer or as a physical pamphlet. You cannot bring notes, paper, or your own calculator. Phones and watches are not permitted either. Many of the questions will refer to tables or charts in the Exhibits Book, and some questions will require you to perform calculations.

The exam is administered electronically, but the computer format can be tricky. Before the exam, you will be able to take a tutorial on how the electronic system works. You should take the tutorial, since some people find the system awkward to use at first, and you don’t want to use valuable test time dealing with technical issues. There is no scheduled break during the test; you’re allowed to take an unscheduled break, but the clock doesn’t stop.

Due to COVID-19, the Series 79 exam can also be taken online. Candidates must submit an Online Exam Administration Request Form to FINRA. Be sure to review the online system requirements for online testing before submitting the form.

Pacing

The Series 79 exam has 85 questions to answer in 150 minutes, which is a little under two minutes per question. This means you’ll need to work at an average pace of about 105 seconds per question. Keep in mind that 105 seconds per question is an average speed that you must maintain over two and a half hours. This would be challenging even if every question was short and straightforward. Unfortunately, a number of questions are detailed and time-consuming, and will certainly take more than 105 seconds. You’ll need to work faster on the remaining questions to maintain the necessary pace.

Read and Understand the Question Before You Answer 

Questions on the Series 79 exam can be intentionally confusing. You should carefully read each question before you answer it and understand exactly what the question is asking. While it is important to make a serious effort on each question, avoid spending a large amount of time on any single question. In general, you should dedicate no more than five minutes to any one question. If you find yourself spending more than five minutes, give it your best guess, flag the question, and move on.

Getting to the Point of the Question

As many of the questions on the Series 79 exam are paragraph length, it is often a good idea to read the last line or two of the question before reading the whole question. This technique will allow you to focus on the aspects of the long-form question that are most relevant, thereby saving you time.

Predict an Answer Choice if Possible

Many test-takers quickly read the question and immediately skip to the answer choices. A better technique is to formulate what you believe is the correct answer before going through the answer choices. If your pre-phrased answer is one of the choices, you should be comfortable in selecting that answer. This technique will also help you increase your speed.

Read Every Answer Choice

You should always read every answer choice. The exam is full of attractive but incorrect answers. Also, if you notice several correct answers, you may have missed an “except” or “not” in the question. If you consider every answer choice before making your selection, you are less likely to be tricked into picking a wrong but superficially appealing answer.

Answer Every Question, and Don’t Dawdle

There is no penalty for guessing. If you honestly don’t know an answer, pick an answer choice and move on. Don’t dawdle. Even a random guess has a 25% chance of being right. If you spend too long trying to narrow down answer choices on one question, you’ve lost precious time on later questions.

Mark for Review and Return Later

If you’re struggling with a question or have no idea what the answer is, mark the question and return to answer it later. Not only does this strategy allow you to efficiently answer the ones you know, but it can also help because you may learn something later in the exam that may help you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it is not a good idea to simply skip all of the difficult questions with the intention of answering them later. You should make a serious effort to answer each question before moving on to the next one, as your thoughts are often clearer early on in the exam-taking process than they will be later.

How to Study for the Series 79 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. The Series 79 is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Solomon Series 79 Audiobook, which is a word-for-word reading of the Study Guide.
    • Answer practice questions in the Solomon Exam Simulator. When you’re done with a chapter in the Study Guide, take 4–6 chapter quizzes in the Solomon Series 79 Online Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your Solomon Pass Probability™ score to at least an 80%; when you reach that point, you are probably ready to sit for the Series 79 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning. Solomon also offers digital flashcards for the Series 79 exam.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you are learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions. If you don’t have anyone, explain it to yourself. Studies show that helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Resources folder in your Solomon student account has helpful information, including a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the Series 79: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the FINRA Series 79 Exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a registered investment banking representative.

To explore all Solomon Exam Prep’s Series 79 study materials, including product samples, visit the Solomon website here.

For more helpful securities exam-related content, study tips, industry updates, and promotional offers, join the Solomon email list. Just click the button below:

Join the List

How to Pass the NASAA Series 66 Exam

What can you do with a Series 66 license? What does the exam cover and how should you prepare for it? Keep reading for answers to your Series 66 questions. Continue reading

What does the Series 66 exam allow me to do?

The Series 66, also known as the Uniform Combined State Law Exam, is created by the North American Securities Administrators Association (NASAA), which represents state securities regulators in the United States, Canada, and Mexico. Passing the Series 66 exam is like passing both the Series 63 (Uniform Securities Agent State Law Examination) and the Series 65 (Uniform Investment Adviser Law Examination). However, to register as an investment adviser representative with the Series 66, you must also pass the FINRA Series 7 General Securities Representative exam. In conjunction with the Series 7 license, the Series 66 license qualifies you as both an investment advisor representative and a securities agent.

As an investment adviser representative, an individual can perform the following tasks:  

    • Make recommendations and render general advice regarding securities
    • Manage accounts or portfolios of clients
    • Solicit, offer, or negotiate for the sale of investment advisory services
    • Supervise employees who perform any of the above tasks.

Note that the Series 7 exam is a co-requisite to the Series 66, so you can take the exams in either order. However, Solomon recommends passing the Series 7 before the Series 66 since much of the information tested on the Series 7 is likely to appear on the Series 66 exam.

About the Exam

The Series 66 exam consists of 100 scored and 10 unscored multiple-choice questions covering the four sections of the NASAA Series 66 exam outline. The 10 additional unscored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam. The NASAA updates its exam questions regularly to reflect the most current rules and regulations.

About the Series 66 exam

Note: Scores are rounded down to the next lowest whole number (e.g. 72.9% would be a final score of 72% – not a passing score for the Series 66 exam).

Topics Covered on the Exam

The NASAA divides the Series 66 exam into four sections:

Topics on the Series 66 exam

The Series 66 exam covers many topics including the following:

    • Business Cycles and Economic Factors
    • Fundamental Analysis
    • Types of Risk
    • Equity and Debt Securities
    • Investment Companies
    • Discounted Cash Flow
    • Derivatives
    • Alternatives and Insurance Products
    • Clients and Client Profiles
    • Capital Market Theory, Portfolio Management, and Taxation
    • Taxation of Debt and Equity Securities
    • Retirement Plans, ERISA, Special Accounts
    • Trading and Performance Measures
    • Regulations of Securities Professionals
    • Regulations of Securities and Issuers
    • Remedies and Administrative Provisions
    • Recordkeeping Requirements
    • Net Worth/Net Capital Requirements
    • Business Practices for IAs and IARs
    • Performance-based fees
    • Wrap fees
    • Custody
    • Communication with Clients and Prospects
    • Compensation and Client Funds
    • Conflicts of Interest

Question Types on the Exam

The Series 66 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

Which of the following is not a current asset?

    1. Inventory
    2. Accounts receivable
    3. Cash
    4. Trademarks
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

Callable preferred stock is more likely to be called when:

    1. Interest rates go up.
    2. Interest rates go down.
    3. The price of the common stock rises.
    4. The price of the common stock falls.
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

An investor calculating the investing merits of a payment or payments not yet received might potentially use all of the following except:

    1. Present value
    2. Net present value
    3. Future value
    4. Internal rate of return
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Pick two statements that best represent time-weighted and dollar-weighted returns:

    1. Conceptually, the time-weighted return is the compounded growth rate of the initial investment over a given period of time, and is calculated using the geometric mean rather than the arithmetic mean.
    2. Conceptually, the dollar-weighted return is the compounded growth rate of the initial investment over a given period of time and is calculated using the geometric mean rather than the arithmetic mean.
    3. Conceptually, a time-weighted return is the internal rate of return on an investment.
    4. Conceptually, a dollar-weighted return is the internal rate of return on an investment.
    1. I and III
    2. I and IV
    3. II and III
    4. II and IV

This format is also used in items that ask you to rank or order a set of items from highest to lowest (or vice versa), or to place a series of events in the proper sequence.

Rank the following categories of mutual funds in order of volatility, from highest to lowest.

    1. Growth and income
    2. Balanced
    3. Growth
    4. Equity income
    1. I, III, II, IV
    2. III, II, I, IV
    3. III, I, II, IV
    4. III, I, IV, II

Answers: D, B, C, B, D

For an even better idea of the possible question types you might encounter on the Series 66 exam, try Solomon Exam Prep’s free Series 66 Sample Quiz.

How to Study for the Series 66 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. The Series 66 is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Solomon Series 66 Audiobook, which is a word-for-word reading of the Study Guide.
    • Answer practice questions in the Solomon Exam Simulator. When you’re done with a chapter in the Study Guide, take 4–6 chapter quizzes in the Solomon Series 66 Online Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your Solomon Pass Probability™ score to at least an 80%; when you reach that point, you are probably ready to sit for the Series 66 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning. Solomon also offers digital flashcards for the Series 66 exam.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you are learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions. If you don’t have anyone, explain it to yourself. Studies show that helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Resources folder in your Solomon student account has helpful information, including a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the Series 66: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the NASAA Series 66 Exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a registered securities agent and investment advisor representative.

To explore all Solomon Exam Prep’s Series 66 study materials, including product samples, visit the Solomon website here.

For more helpful securities exam-related content, study tips, and industry updates, join the Solomon email list. Just click the button below:

Join the List

How to Pass the FINRA Securities Industry Essentials (SIE) Exam

Thinking about taking the SIE exam? Keep reading to learn what the SIE is, what topics the exam covers, and how you should prepare for it. Continue reading

Updated June 9, 2022

Should I Take the SIE Exam?

Are you interested in the world of stocks, bonds, and investments? Thinking about a career as a financial advisor? Or perhaps your goal is to become an investment banker or a hedge fund manager? There are many attractive career options in the securities industry, but no matter which path you’re considering, you’ll probably need to take the Securities Industry Essentials (SIE) Exam.

If you’re not sure whether a career as a securities industry professional is right for you, the SIE is a great way to test the waters. For college students, the SIE provides a broad overview of the securities industry and financial knowledge that will be helpful even if you don’t pursue a securities industry career. And passing the SIE will make you more competitive when looking for a financial or investment-related internship.

For job seekers in general, having the SIE under your belt shows potential employers that you are serious about a career in the industry and have mastered industry fundamentals. And because the SIE is a co-requisite to several securities industry qualification exams, passing it allows you to jumpstart your career goals.

What is the SIE Exam?

The SIE exam is an introductory-level exam that covers fundamental securities industry knowledge. The SIE focuses on industry terminology, securities products, the structure and function of the markets, regulatory agencies and their functions, and regulated and prohibited practices.

The SIE is a co-requisite of several qualification exams, including the Series 6, Series 7, Series 22, Series 79, Series 82, and Series 99. Passing the SIE does not qualify you to become a registered securities industry professional, but it is usually the first step. Because the SIE is “co-requisite,” instead of “pre-requisite,” you don’t have to take the SIE before taking other FINRA exams. However, taking the SIE first is highly recommended because what you learn on the SIE is extremely helpful to you when you take any other security exam. The knowledge that you learn on the SIE is wind in your sails when you take any other registered representative level securities qualification exam, such as the Series 6 or Series 7.

Any individual 18 or older may take the SIE exam. Unlike other FINRA securities exams, employment and sponsorship by a FINRA member firm is not required in order to take the SIE, and exam results are valid for four years. Individuals can sign up to take the SIE exam on the FINRA website by creating an account, paying the $80 exam fee, and scheduling the exam. The SIE can be taken at a Prometric test center or online via the ProProctor platform.

About the Exam

The SIE exam consists of 75 scored and 10 unscored multiple-choice questions covering the four sections of the FINRA SIE exam outline. The 10 additional unscored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam. FINRA updates its exam questions regularly to reflect the most current rules and regulations.

About the SIE exam

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69% – not a passing score for the SIE exam).

Topics Covered on the Exam

FINRA divides the SIE exam into four sections:

SIE exam topics

The SIE exam covers many topics including the following:

    • Common Stock
    • Preferred Stock, Warrants, Rights and ADRs
    • Bonds and Yields
    • Types of Bonds
    • Treasury Securities, ABS, CMOs, and Munis
    • Mutual Funds and Other Investment Companies
    • Life Insurance Products and Municipal Fund Securities
    • Options, Partnerships, Hedge Funds, and Private Placements
    • Risks
    • Customer Disclosures & Taxation
    • Underwriting, Issuing, and Registering Securities
    • Exemptions from Registration & Types of Broker-Dealers
    • Markets, Financial Institutions, and Clearance & Settlement
    • Economic Factors and Business Cycles
    • Tools of Government Policy and International Factors
    • Opening an Account & Types of Accounts
    • Cash and Margin Accounts
    • Order Processing
    • Handling Corporate Actions, Account Compliance, and SIPC Rules
    • Prohibited Activities and Trading Rules
    • FINRA Conduct Rules
    • FINRA Membership

Question Types on the SIE Exam

The SIE exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

When interest rates go up, what happens to the price of typical preferred stock?

    1. It rises.
    2. It falls.
    3. It stays the same.
    4. It is unrelated to interest rates, so it is impossible to tell.
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

ADRs trade in:

    1. The foreign currency that underlies the ADR
    2. U.S. dollars
    3. A combination of foreign currency and U.S. dollars
    4. A special exchange rate that takes into consideration how much foreign currency can purchase one U.S. dollar
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

All of the following are advantages to the issuer of debt financing over equity financing except:

    1. No ownership dilution
    2. No loss of control
    3. Interest payments are a deductible business expense
    4. Fixed repayment schedule
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

The prices of which of the following two types of preferred stock are least sensitive to changes in interest rates?

    1. Participating preferred
    2. Cumulative preferred
    3. Adjustable-rate preferred
    4. Convertible preferred
    1. I and II
    2. II and III
    3. I and IV
    4. III and IV

This format is also used in items that ask you to rank or order a set of items from highest to lowest (or vice versa), or to place a series of events in the proper sequence.

Rank the following yields for a premium bond held to maturity from highest to lowest.

    1. Yield to call
    2. Coupon rate
    3. Yield to maturity
    4. Current yield
    1. II, IV, III, I
    2. IV, I, III, II
    3. II, IV, I, III
    4. III, I, IV, II

For an even better idea of the possible question types you might encounter on the SIE exam, try Solomon Exam Prep’s free SIE Sample Quiz and SIE Sample Exam.

How to Study for the SIE Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon SIE Study Guide, carefully. The SIE is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Solomon SIE Audiobook, which is a word-for-word reading of the Study Guide.
    • Answer practice questions in the Solomon Exam Simulator. When you’re done with a chapter in the Study Guide, take 4–6 chapter quizzes in the Solomon Online Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the SIE Exam Simulator. Aim to pass at least six full practice exams and try to get your Solomon Pass Probability™ score to at least an 80%; when you reach that point, you are probably ready to sit for the SIE exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the SIE Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning. Solomon also offers digital flashcards for the SIE exam.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you are learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions. If you don’t have anyone, explain it to yourself. Studies show that helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Resources folder in your Solomon student account has helpful information, including a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon SIE Study Guide. Take notes to help yourself stay focused.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the SIE: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the FINRA SIE Exam! It just takes focus and determination. Earning this certification will provide valuable knowledge and open up rewarding career opportunities. Solomon Exam Prep is here to support you on your first step to entering the securities industry.

To explore all Solomon Exam Prep’s SIE study materials, including product samples, visit the Solomon website here.

For more helpful securities exam-related content, study tips, and industry updates, join the Solomon email list. Just click the button below:

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How to Pass the FINRA Series 6 Exam

Learn what the FINRA Series 6 qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

What does the FINRA Series 6 exam allow me to do?

The Series 6, also known as the Investment Company Products/Variable Contracts Representative Exam, qualifies individuals to solicit, purchase, and/or sell certain investment products. These include mutual funds, initial offerings of closed-end funds, variable life insurance, variable annuities, municipal fund securities, and unit investment trusts (UITs).

The Series 6 does not entitle you to sell all securities products – for that, you’ll need the Series 7. But if you intend to only sell the products listed above, then the Series 6 exam may be an attractive option since it is shorter than the Series 7.

Common jobs in the securities and financial services industries that use the Series 6 are investment advisers, financial advisers, insurance agents, retirement plan specialists, and private bankers. Be aware, though, that some jobs might require other exams or qualifications in addition to the Series 6, depending on the duties required for a particular job. Salary ranges vary among these types of jobs, but the average base salary of people with a Series 6 certification is $56,000 per year (payscale.com).

To take the Series 6 exam, you must be sponsored by a FINRA member firm. The firm files a Form U4 application on your behalf through FINRA’s Central Registration Depository (CRD). Candidates must pass the co-requisite Securities Industry Essentials (SIE) exam in addition to the Series 6 to obtain the Series 6 license. Although you can take the exams in any order, Solomon Exam Prep recommends taking the SIE exam first because it is a foundational exam. Anyone 18 or older can take the SIE exam, and it doesn’t require firm sponsorship.

About the Exam

The Series 6 exam consists of 50 scored and 5 unscored multiple-choice questions covering the four sections of the FINRA Series 6 exam outline. The 5 additional unscored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam. FINRA updates its exam questions regularly to reflect the most current rules and regulations.

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69% – not a passing score for the Series 6 exam).

Topics Covered on the Exam

FINRA divides the Series 6 exam into four sections which represent the four job functions of a Series 6 registered representative:

The Series 6 exam covers many topics including the following:

    • Securities Registration
    • Communications
    • Client Accounts
    • Retirement Plans
    • Equity Securities
    • Debt Securities
    • Taxation
    • Options
    • Investment Companies
    • Annuities
    • Portfolio Management and CAPM
    • Investment Goals
    • Securities Analysis
    • Completing and Confirming Transactions

Question Types on the Series 6

The Series 6 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

In the cooling-off period, which of the following would not be allowed?

    1. Making an offer to sell a security with a preliminary prospectus
    2. Taking orders for the security
    3. Publishing a tombstone ad
    4. Distributing a preliminary prospectus
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

Regulation S-P helps protect customers from:

    1. Recommendations to purchase high-risk securities such as S&P 500 index derivatives
    2. Abusive commissions and sales charges
    3. Having their private information misused
    4. Money laundering
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

All of the following would be considered a security except:

    1. Publicly traded stock
    2. Publicly traded bond
    3. A variable annuity
    4. A commodities future
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Regarding its telemarketing efforts, a firm or its representative must do which of the following?

    1. Identify themselves and the purpose of their call
    2. Compare potential prospects against the FTC’s National Do Not Call Registry
    3. Be licensed by FINRA as a telemarketer
    4. Establish a 900 number for potential complaints
    1. I and IV
    2. I and II
    3. II and III
    4. III and IV

This format is also used in items that ask you to rank or order a set of items from highest to lowest (or vice versa), or to place a series of events in the proper sequence.

Rank the following yields for a premium bond held to maturity from highest to lowest.

    1. Yield to call
    2. Coupon rate
    3. Yield to maturity
    4. Current yield
    1. II, IV, III, I
    2. IV, I, III, II
    3. II, IV, I, III
    4. III, I, IV, II

For an even better idea of the possible question types you might encounter on the Series 6 exam, try Solomon Exam Prep’s free Series 6 Sample Quiz.

How to Study for the Series 6

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. The Series 6 is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Solomon Series 6 Audiobook, which is a word-for-word reading of the Solomon Series 6 Study Guide.
    • Answer practice questions in the Solomon Exam Simulator. When you’re done with a chapter in the Study Guide, take 4–6 chapter quizzes in the Solomon Online Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the Series 6 Exam Simulator. Aim to pass at least six full practice exams and try to get your Solomon Pass Probability™ score to at least an 80%; when you reach that point, you are probably ready to sit for the Series 6 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning. Solomon also offers digital flashcards for the Series 6 exam.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you are learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions. If you don’t have anyone, explain it to yourself. Studies show that helps almost as much as explaining to an actual person (see Solomon’s recent post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Resources folder in your Solomon student account has helpful information, including a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the Series 6: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the FINRA Series 6! It just takes focus and determination. Solomon Exam Prep is here to support you on your journey to becoming a registered Investment Company Products/Variable Life Contracts Representative.

To explore all Solomon Exam Prep Series 6 study materials, including product samples, visit the Solomon website here.

For more helpful securities exam-related content, study tips, and industry updates, join the Solomon email list. Just click the button below:

Join the List

How to Pass the NASAA Series 65 Exam

What is the Series 65 exam and how should you prepare for it? Read Solomon Exam Prep’s guide to the NASAA Series 65 exam. Continue reading

What does the NASAA Series 65 allow me to do?

The Series 65, also known as the Uniform Investment Adviser Law Examination, qualifies individuals to give investment advice for a fee. Investment adviser representatives (IARs) use their knowledge to give financial advice and help clients build investment portfolios. IARs might provide general investment advice or recommend a client to invest in a specific security. IARs can also manage client accounts and supervise other IARs.

The organization that creates the test—the North American Securities Administrators Association, or NASAA—works to protect investors in every state, territory, the District of Columbia, Canada, and Mexico. Requiring investment adviser representative candidates to pass the Series 65 is a key tool in the NASAA’s investor protection arsenal. Regulators want to make sure people who are giving investment advice in their state or jurisdiction are competent and will behave legally and ethically.

About the Exam

The Series 65 exam consists of 130 scored and 10 unscored multiple-choice questions covering the four sections of the NASAA Series 65 exam outline. The 10 additional unscored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam. NASAA updates its exam questions regularly to reflect the most current rules and regulations.

Note: Scores are rounded down to the lowest whole number (e.g. 71.9% would be a final score of 71%–not a passing score for the Series 65 exam).

Topics Covered on the Exam

The NASAA divides the Series 65 exam into four sections:

The Series 65 exam covers many topics including the following:

    • Economics
    • Financial reporting
    • Quantitative methods
    • Risks
    • Cash investments
    • Fixed income
    • Equities
    • Pooled investments, such as mutual funds, ETFs, and REITs
    • Derivatives
    • Alternatives
    • Annuities and other insurance-based investments
    • Client types
    • Client profiles
    • Capital market theory
    • Portfolio management
    • Taxes
    • Retirement plans
    • ERISA
    • Special accounts, such as college savings plans
    • Trading securities
    • Performance measures
    • State and federal securities acts and regulations
    • Ethical practices and fiduciary obligations

Question Types on the Series 65

The Series 65 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

Which of the following actions might the Federal Reserve take if it wishes to stimulate the economy?

    1. Buy Treasuries
    2. Raise the discount rate
    3. Raise the bank reserve requirements
    4. Raise the margin requirements
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

A recession is a protracted period of decline in the national economy, typically defined as:

    1. More than two quarters of decreasing GDP
    2. More than two quarters of decline in the housing market
    3. More than two quarters of shrinking M1
    4. More than two quarters of a falling PPI
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

All of the following are tools that the Federal Reserve uses to implement monetary policy except:

    1. Open market operations
    2. Discount window lending
    3. Altering bank reserve requirements
    4. Altering the value of the dollar
Fill-in-the-Blank Format:

This question type has a missing word or phrase, which you must select from the four options provided.

A situation in which short-term securities pay higher yields than long-term securities is considered a(n) _____ yield curve.

    1. Normal
    2. Inverted
    3. Flat
    4. Barbell
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

A stronger dollar benefits which group?

    1. U.S. exporters
    2. U.S. importers
    3. U.S. investors who want to invest in foreign assets
    4. Overseas investors who want to invest in U.S. assets
    1. I and II
    2. II and III
    3. III and IV
    4. I and IV

This format is also used in items that ask you to rank or order a set of items from highest to lowest (or vice versa), or to place a series of events in the proper sequence.

Order the following from lowest to highest:

    1. Broker call rate
    2. Federal funds rate
    3. Prime rate
    4. Discount rate
    1. I, IV, III, I
    2. III, II, I, IV
    3. IV, III, I, II
    4. II, IV, I, III

How to Study for the Series 65

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. It’s simple: read the Solomon Study Guide, carefully. The Series 65 is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Solomon Audiobook, which is a word-for-word reading of the Solomon Study Guide.
    • Answer practice questions in the Solomon Exam Simulator. When you’re done with a chapter in the Study Guide, take 4 – 6 chapter quizzes in the Solomon Online Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least an 80; when you reach that point, you are probably ready to sit for the Series 65 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning. Solomon also offers digital flashcards for the Series 65 exam.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you are learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions. If you don’t have anyone, explain it to yourself. Studies show that helps almost as much as explaining to an actual person (see Solomon’s recent post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Resources folder in your Solomon student account has helpful information, including a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the Series 65: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the NASAA Series 65! It just takes work and determination. Solomon Exam Prep is here to support you on your journey to becoming a registered Investment Adviser Representative.

For more helpful securities exam-related content, study tips, and industry updates, join the Solomon email list. Just click the button below:

Join the List

What Are the Permitted Activities of a Series 7 General Securities Representative?

Solomon Exam Prep explains what a Series 7 General Securities Representative can and cannot do and how this compares to other rep-level registrations. Continue reading

Of the representative-level FINRA registrations categories, the General Securities Representative (Series 7) registration is considered by many to be the most valuable, due to the range of products it allows you to sell. But how “general” is it? Are there other representative-level registrations that permit you do things a Series 7 representative cannot?

What is a Series 7 representative permitted to do?

FINRA allows a General Securities Representative to solicit the purchase and sales of all securities products, including:

    • Stocks, whether from IPOs, private placements, or secondary market trading
    • Other corporate securities, such as bonds, rights, and warrants
    • Mutual funds
    • Closed-end funds
    • Money market funds
    • Unit investment trusts (UITs)
    • Exchange-traded funds (ETFs)
    • Real estate investment trusts (REITs)
    • Variable contracts (insurance products whose funds are invested in securities)
    • Municipal securities
    • Municipal fund securities, such as 529 plans
    • Options
    • Government securities
    • Direct participation programs (DPPs)
    • Venture capital
    • Hedge funds

This long list of products means that a Series 7 registered rep may perform the functions of an Investment Company and Variable Contracts Representative (Series 6), Direct Participation Programs Representative (Series 22), or Private Securities Offerings Representative (Series 82).

Besides sales, General Securities Representatives may also perform certain activities closely related to sales. They may:

    • recommend investments after performing a suitability analysis for the customer
    • accept unsolicited orders
    • open customer accounts, subject to approval by a principal

What is a Series 7 representative NOT permitted to do?

Though a General Securities Representative may solicit purchases of IPO shares, he may not work on underwriting or structuring an IPO, or any other securities offerings. This means that he is not permitted to advise an issuer on an offering. This work requires registration as an Investment Banking Representative (Series 79). Likewise, working on municipal underwriting requires registration as a Municipal Securities Representative (Series 52).

A Series 7 representative is also not qualified to perform the back-office functions of an Operations Professional (Series 99). Among these functions are maintaining possession or control of the firm’s securities, calculating margin for margin accounts, and sending trade confirmations and account statements.

Of course, every registered representative must also pass the FINRA Securities Industry Essentials (SIE) exam. The SIE doesn’t qualify you to do anything, instead it is a foundational exam that focuses on industry terminology, securities products, the structure and function of the markets, regulatory agencies and their functions, and regulated and prohibited practices. Unlike other FINRA securities exams, you do not need to be employed or sponsored by a broker-dealer in order to take the SIE. The only requirement is that you be 18 years old.

If you’re considering taking the Series 7 exam, Solomon Exam Prep is here to help. Solomon provides a wide variety of study materials, together with resources such as study schedules, the Ask The Professor function, and helpful exam information. Explore Solomon’s Series 7 study materials.

Shop Series 7

For more helpful securities exam-related content, study tips, and industry updates, join the Solomon email list. Click the button below:

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How to Pass the FINRA Series 14 and Become a FINRA-registered Compliance Officer

Looking to become a compliance officer for a broker-dealer? Read Solomon Exam Prep’s guide to effective preparation for the FINRA Series 14 exam. Continue reading

What does the FINRA Series 14 allow me to do?

The FINRA Series 14, also known as the Compliance Officer Exam, is a principal-level exam that qualifies you to serve as a compliance officer for a broker-dealer, including being designated as the Chief Compliance Officer (CCO) of a broker-dealer in its SEC registration. The Series 14 was designed to make sure that individuals who have day-to-day compliance responsibilities or supervise others engaged in compliance activities have the knowledge necessary to carry out their job responsibilities.

There are two ways to achieve the Compliance Officer qualification: pass the SIE, Series 7, and Series 24 exams, or pass just the Series 14 exam. In other words, by taking the Series 14, you get to take one exam instead of three. For this reason, the Series 14 is broader, deeper, and more difficult than most FINRA exams. Passing the Series 14 requires knowledge of compliance issues related to a broad range of broker-dealer activities, from the mechanics of trading to the details of the underwriting process to the publication of research reports.

You must be associated with a FINRA member firm in order to take the Series 14.

About the Exam

The Series 14 exam consists of 110 multiple-choice questions covering the nine sections of the FINRA Series 14 exam outline. FINRA updates its exam questions regularly to reflect the most current rules and regulations.

Note: Scores are rounded down to the lowest whole number (e.g. 69.9% would be a final score of 69%–not a passing score for the Series 14 exam).

Topics Covered on the Exam

FINRA divides the Series 14 exam into nine areas. These areas are organized by the types of knowledge that a compliance officer will need to know to complete various job functions.

The Series 14 exam covers many topics including the following:

    • Components of a satisfactory supervisory system as defined by FINRA
    • Rules and mechanics of the securities markets
    • Margin requirements
    • Sales practices
    • Types of brokerage accounts
    • Separation of research and investment banking
    • Net capital requirements
    • Registration requirements for firms and associated persons
    • Business continuity plans
    • Customer identification and anti–money laundering compliance

Question Types on the Series 14

The Series 14 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

Under Rule 144, what is the holding period for stock purchased in the open market by a control person?

    1. Two years
    2. One year
    3. Six months
    4. No holding period
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

According to NYSE rules, a block of stock is defined as:

    1. 10,000 shares, or a quantity with a market value of $150,000 or more, whichever is less.
    2. 10,000 shares, or a quantity with a market value of $200,000 or more, whichever is less.
    3. 20,000 shares, or a quantity with a market value of $200,000 or more, whichever is less.
    4. 20,000 shares, or a quantity with a market value of $200,000 or more, whichever is more.
“EXCEPT Format”

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

All of the following require the successful completion of one or more exams except a:

    1. specialist
    2. trader
    3. securities lending representative
    4. two-dollar broker
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Which two of the following employees of a member organization must be registered and qualified under NYSE Rule 345?

    1. An employee with authority to bind the firm to a contract involving securities activities
    2. An employee who only trades for the firm’s account and does not transact business with the public
    3. An employee with duties and responsibilities similar to those of a registered representative
    4. A supervisor of an employee who solicits business for the firm from another member firm
    1. I and III
    2. I and IV
    3. II and III
    4. II and IV

This format is also used in items that ask you to rank a set of statements from high to low or to place a series of events in the proper sequence.

In which order, from first to last, are the following actions performed during the underwriting of an issue of corporate securities?

    1. The holding of a due diligence meeting
    2. Investigation and analysis of the issuer
    3. The filing of a registration statement
    4. Distribution of the red herring to customers giving indications of interest
    1. I, II, III, IV
    2. II, III, I, IV
    3. III, I, II, IV
    4. IV, II, III, I

Study Strategies for the Series 14

    • Use all the resources. The Resources folder in your Solomon student account has helpful information, including a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Read and understand. It’s simple: read the Solomon Study Guide, carefully. The Series 14 is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam.
    • Take handwritten notes. As you read the Solomon Series 14 Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing these notes strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Answer practice questions in the Solomon Exam Simulator. When you’re done with a chapter in the Study Guide, take 4 – 6 chapter quizzes in the Solomon Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least an 80; when you reach that point, you are probably ready to sit for the Series 14 exam.
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the Series 14: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the FINRA Series 14! It just takes work and determination. Solomon Exam Prep is here to support you on your journey to becoming a FINRA-registered Compliance Officer.

For more helpful securities exam-related content, study tips, and industry updates, join the Solomon email list. Just click the button below:

Join the List

The Power of Explaining: A Study Strategy Backed by Research

If you’re studying for the SIE, Series 65, Series 7, or another securities licensing exam, try this evidence-based study strategy. Continue reading

Updated June 23, 2022
Solomon Exam Prep’s learning system is built on understanding how people learn. Solomon is always looking for new ways to help our students learn more effectively and pass their securities exams.  

Research from Dr. Tania Lombrozo of UC Berkeley, published in the journal Trends in Cognitive Science, shows that explaining a new concept to another person is an enormously helpful learning technique. When you explain an unfamiliar concept to another person, your brain makes crucial learning connections. However, many people don’t have a person around them that is ready to listen to their new knowledge. Thus, Dr. Lombrozo recommends self-explanation, which is the practice of explaining concepts to yourself in order to better understand them.

Why does explaining work?

Dr. Lombrozo found that the positive effects of self-explanation can be attributed to the generalization process. Explaining requires you to put new information in the context of “prior beliefs,” which makes you generalize the information. In doing so, you’re forced to pick out what is most necessary for understanding the concept. In thinking about how to explain something, you in fact learn more about the thing itself!  

Dr. Lombrozo describes an experiment by psychologists Amsterlaw and Wellman that demonstrates the power of explaining in understanding. In Amsterlaw and Wellman’s experiment, they administered logic tests to children under various conditions. During the course of the experiment, the children were split into groups. One group would answer, and then they would be asked to explain the correct answer once it was revealed. A comparison group did the same, but only for half the problems. The third group was a control group and gave no explanation at all.

According to Amsterlaw and Wellman, “children in the explanation condition significantly outperformed the comparison and control groups….” In other words, explaining increased their understanding.

How to use this strategy for licensing exams:

What does this mean if you’re studying for the Series 65 or the Series 7 or some other securities licensing exam? Solomon Exam Prep suggests finding someone in your life who will listen to you explain topics from your securities exam prep. The person you choose doesn’t need to have any knowledge of securities. The person just needs to be a good listener. Even better, someone who will ask questions.

What if you don’t have anyone who can do that for you? Well, as Dr. Lombrozo showed, the practice of self-explanation is also helpful and will increase your understanding of the material you’re trying to learn.

Other recommended study strategies include:  

    • Listen to the Solomon Audiobook while you read the Solomon Study Guide.
    • As you read the Study Guide and watch the Solomon Video Lectures, take notes by hand.
    • When practicing in the Solomon Exam Simulator, read and re-read the question at least twice. 
    • If you answer a question correctly, explain to yourself why it was correct before reading the question rationale.  
    • If you answer a question incorrectly, read the rationale carefully. Explain to yourself what the right answer is, and why. Write down the explanation in your notes. 
    • Study with a partner. Trade off testing each other on concepts and asking for an explanation.  

Visit the Solomon Exam Prep  website to explore study materials for 21 different securities licensing exams, including the SIE and the Series 3, 6, 7, 14, 22, 24, 26, 27, 28, 50, 51, 52, 53, 54, 63, 65, 66, 79, 82 and 99.

FAQs for the Securities Industry Essentials – SIE Exam

The FINRA SIE exam is required for many careers in the securities industry. We cover all your frequently-asked-questions about the SIE. Continue reading

Updated May 20, 2022

The FINRA SIE Exam is a foundational exam required for many career paths in the finance and securities industries. But you probably have some questions about the SIE, such as what the exam covers and if you need to take it. We compiled answers to the most frequently-asked-questions about the SIE to help.

  • When did the SIE exam begin?

    October 1, 2018

  • What does the SIE exam test?

    The SIE exam tests fundamental securities-related knowledge. This includes knowledge of basic products, such as stocks, bonds and mutual funds. It also tests securities industry rules and regulations.

    FINRA has outlined the SIE exam content and categorized it into four "functions" or categories:

SIE exam topics

  • Do I need to be employed or sponsored to take the SIE exam?

    No, unlike other FINRA licensing exams, you do not need to be employed or sponsored by a broker-dealer to take the SIE exam.

  • Do I need to take the SIE before other licensing exams?

    Not necessarily. The SIE is a corequisite for the representative-level "top off" exams and the MSRB Series 52. You may take your top-off exam before the SIE, but you must pass both in order to become a registered representative. Most municipal and NASAA exams do not require the SIE (with the exception of the Series 52). Finally, if you passed a representative-level exam on or before October 1st, 2018, you do not need to take the SIE exam.

  • What is a Top-off exam? Can I take it with the SIE?

    The SIE covers basic or essential securities industry knowledge. When FINRA introduced the SIE, they also introduced new, shorter versions of their specialized representative-level exams (such as the Series 7, Series 6 or Series 79). These exams “top-off” your knowledge of the industry with more specific information based on which one you take, thus the name “top-off exam."

    You may choose to study for your SIE and top-off exam simultaneously, and even take them on the same day. However, most people take the SIE first and then take a top-off. For those taking the SIE and a top-off exam, see discounted Solomon Exam Prep Top-Off bundles here.

  • Does the SIE make me a "registered representative?"

    No. In order to be a registered representative, in addition to passing the SIE exam, you must get hired by a broker-dealer. Your employer must then sponsor you to take a representative-level qualifying exam, also known as a top-off exam, such as the Series 6, Series 7, or Series 79. Once you pass a top-off exam, you will be registered with FINRA and then be considered a registered representative.

Who Needs to Take the SIE

  • If I was registered before the SIE started to be required, do I have to take it?

    No. If you were a registered representative before October 1, 2018, and you have maintained your registration after October 1, 2018, FINRA has credited you with the SIE automatically.

  • If I was once a registered representative but my registration lapsed, do I have to take the SIE to re-enter the securities industry?

    If your registration lapses, you can be outside the industry for up to four years before you would need to take the SIE. In other words, you will not have to take the SIE, provided you register as a representative within four years from the date of your last registration. After four years pass, you would need to take the SIE before reentering the industry. For example, if you left the industry on October 31, 2018, you have until October 31, 2022, to become registered again before you would need to take the SIE.

    However, a two-year timeline applies to the top-off exams, such as the Series 6 or Series 7. In other words, after two years outside the industry, if you want to become registered again, you will have to retake the top-off exam.

  • What if my registration lapsed or terminated before October 1, 2014?

    In order to get re-registered, you will have to pass the SIE and any relevant top-off exam, such as the Series 6 or Series 7.

  • If I am registered in an exam license that has been retired by FINRA, do I have to take the SIE exam?

    If you are registered in an exam license that FINRA has retired, such as the Series 11, Series 62, Series 42, or Series 72, you will not have to take the SIE. You will only have to take the SIE if you left the industry for more than two years and your license expired.

    If you return to the industry within two years, you will not have to take the SIE. 

  • If I want to become a municipal securities representative, is the SIE required?

    Yes. The MSRB (Municipal Securities Rulemaking Board) has coordinated its licensing exams with the SIE. To become a Municipal Securities Representative, you will need to take both the SIE and the “top-off” Series 52 exam.

  • If I have a representative-level securities license (such as Series 6 or Series 7) and I want to get another one (such as Series 79 or Series 82), do I have to take the SIE?

    No. If your registration has not lapsed, you don't need to take the SIE to get another representative level license.

  • Do I need the SIE to sell variable annuities?

    Yes, you must take the SIE, as well as a representative level exam (such as the Series 6) to sell variable annuities. You must also be employed by a registered broker-dealer.

Preparing for the SIE Exam

  • How long should I prepare for the SIE exam?

    Solomon recommends studying for 60 hours. Depending on your timeframe, you can choose a 4, 6, 8, or 11-week Solomon study schedule.

  • How do I prepare for the SIE exam?

    Solomon offers a complete SIE study program, which includes digital Study Guide, Exam Simulator, Audiobook, Video Lecture, Flashcards, and Live Web Classes. Visit the Solomon SIE page to learn more.

Signing Up for the SIE Exam

  • How do I enroll to take the SIE?

    To enroll for the SIE Exam, follow the instructions on the FINRA website.

  • Where should I go to schedule my exam?

    After you enroll with FINRA to take the SIE exam, you must then schedule a time to sit for the exam with Prometric, FINRA’s testing service. Prometric offers online or in person exam appointments.

  • Does the 120-day "exam window" apply to the SIE?

    Yes. Like other licensing exams, FINRA gives you a 120-day window within which to schedule your SIE exam.

  • If I work at a FINRA broker-dealer, how do I enroll someone to take the SIE exam?

    FINRA member firms have two options for registering an employee:

    1. File Form U4 requesting a registration position. When a person takes the SIE this way, the result will be visible in CRD (Central Registration Depository) just like any other exam.
    2. Request the SIE through CRD via a non-Form U4 enrollment process. The firm will be able to view the SIE result as part of this process if the firm subsequently files a Form U4 requesting a registration position for this person. Once this happens, the SIE result will become viewable in the Exam History section in CRD.

Taking the SIE Exam

  • Who can take the SIE exam?

    Anyone 18 years and older can take the SIE.

  • How is the exam administered?

    The exam is administered by computer, either remotely or in a testing center.

  • How much does it cost to take the SIE?

    The SIE costs $80 at the time of this writing.

  • Do I need any materials on test day?

    You don't need to bring any materials on test day apart from the required forms of identification. A calculator is provided on the testing application, as well as a virtual “notepad” for you to jot things down. If you are testing remotely, this notepad does not carry over from one question to another, and you must input your entries on your keyboard. If you are testing in person, they will provide you with a physical notepad as well.

  • How many questions are there on the SIE exam?

    There are 75 scored questions and 10 unscored questions, for a total of 85 questions.

  • How much time do I have to take the exam?

    You have 105 minutes to take the exam.

  • Can I skip between questions on the exam?

    If you choose to take the exam in a testing center, you can navigate back and forth between questions. That means you can go back to a question if you want to change your answer. If you take the exam remotely, you are unable to go back.

  • What are my options to take the SIE with COVID-19 precautions?

    Prometric launched their service ProProctor in June 2020, which allows exam takers to sit for certain exams online. There are many anti-cheating regulations that FINRA requires, so consult Prometric’s ProProctor Info, or our blog post on the process to see how it works. 

    When taking an exam in person at a Prometric testing center, there may be certain safety precautions in place. Consult this page on Prometric’s website to see their updates.

  • Will there be other students present at the exam?

    If you are testing in a testing center, there may be other individuals taking their exam while you take yours. Prometric has taken steps to assure that COVID-19 regulations are followed in this case.

  • Can I take the SIE and a representative-level exam on the same day?

    Yes, but you must schedule each exam separately.

SIE Exam Results

  • What is a passing score on the SIE exam?

    You must get 70% or higher to pass.

  • When do I receive my score on the SIE exam?

    The Prometric system will immediately notify you after you finish your exam. If you pass, the system will just say "pass." You will only receive your specific score if you don't pass the exam.

    If you take the exam in person at a testing center, you will receive a printed confirmation of your result. If you take the exam remotely using ProProctor, you will receive an encrypted email with your SIE pass results.

  • How long is a passing score on the SIE valid?

    Your SIE exam score is valid for four years from the date you pass.

  • If I fail the SIE, can I take it again?

    Yes. If you fail the SIE, you are permitted to retake it, but you have to wait 30 days. FINRA maintains a 30/30/180-day rule with respect to the SIE, as well as all other exams. This means that you must wait 30 days after the first time you fail, and another 30 days if you fail again. If you fail a third time, you will have to wait 180 days to retake the exam.

  • Am I able to find out whether a job candidate or any individual passed the SIE?

    The SIE alone does not appear on FINRA BrokerCheck or CRD. However, once a firm files a U4, it will be pulled into the individual’s CRD history. Also, once an individual passes a representative-level exam, the SIE will appear in BrokerCheck.

Looking for study materials for the SIE exam? Solomon Exam Prep offers a complete SIE study system. Choose from a variety of materials to help you prepare: Study Guide, Exam Simulator, Audiobook, Video Lecture, digital Flashcards, and Live Web Classes. Visit the Solomon SIE product page to learn more.

View SIE Exam Prep

Personal Finances and Your Registration

Could a poor credit rating or a personal bankruptcy prevent you from getting licensed to work in the securities industry? Here are some things to know. Continue reading

Updated Jun 30, 2022

Are you looking to start a career in the financial or securities industries? Passing securities exams like the Securities Industry Essentials (SIE), the Series 6, or Series 7 isn’t the only criteria for getting registered to work in the industry. Your personal financial history may also factor into whether you can become licensed and land a job.

So could a poor credit rating or a personal bankruptcy negatively impact your ability to get licensed to work in the securities industry? Here’s some information about how your personal financial situation may affect your registration process.

First, an important caveat: this is not legal advice and, as an education company, Solomon Exam Prep provides this information for educational purposes only. Please consult with a compliance professional to identify and address any issues regarding your situation or your state’s regulations. Always check with your compliance department regarding compliance issues.

1. Be sure to disclose relevant information on Form U4.

Form U4 is the registration form for broker-dealer agents and investment adviser representatives. It asks several questions about your history, including some on your finances. Such questions include whether you or a company you controlled have been subject to a bankruptcy within the past ten years. Answer these questions completely and honestly! Failing to disclose this information could jeopardize your ability to work in the securities industry–it could result in a statutory disqualification.

2. You may be denied registration based on insolvency.

If the state securities administrator discovers that you are insolvent (meaning you can’t pay your debts), they may deny your registration if they feel that it’s in the public’s interest.

3. You may be denied registration based on your financial history.

FINRA may deny your registration based on your answers to the questions on Form U4. This means that FINRA could deny your registration if:

    • you or a company you controlled have been subject to a bankruptcy within the past ten years
    • a bonding company denied, paid out on, or revoked a bond for you
    • you have unpaid legal judgments or liens

4. You may be denied registration for having a poor credit history.

Having a poor credit history could result in your registration being denied. Regulators may require applicants to submit balance sheets. The information on such sheets will be factored into the overall decision of whether to approve or deny your application.

5. Your application for registration will not be automatically accepted if you have financial issues that are required to be reported on Form U4.

If you report financial problems on your application, it will not be automatically accepted. Instead, it will be transferred to a manual review process.

6. Once you’re registered, you may lose your registration due to poor credit, bankruptcy, or insolvency.

Even if you’re already registered, you’re still required to report certain events by updating Form U4. Your registration is still subject to review when you do so.

7. You may be able to get registered even if you don’t have a spotless financial history.

Regulators are looking out for your customers. They want to collect all relevant information so they can stop problems before they start. They will only deny your registration if they feel it’s in the public’s interest.

If a checkered financial history fits with other red flags, such as a criminal record or a history of regulatory violations, then a denial would be more likely. However, an isolated financial incident would be less likely to cause regulators to deny a registration. Regulators look at each case individually.

Final Thoughts

Note that regulations vary by state, and that in some states regulators will not look at your credit rating when evaluating your application. Certain regulators may also allow you to send your information before you apply, so you can see whether they would accept your application.

For more information, contact your state securities administrator. Find contact information on NASAA’s website.

Reminder: this is not legal advice and is provided for educational purposes only. Please consult with a compliance professional to identify and address any issues regarding your situation or your state’s regulations. Always check with your compliance department regarding compliance issues.