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Question 1

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Which SEC filing must be submitted by public companies within 60 days after the end of their fiscal year?

Form 10-Q

Form 10-K

Form 8-K

Form 13F

to track

2026 Statistics

Key Facts: Series 86 Exam

70-75%

First-Time Pass Rate

Industry estimate

73%

Passing Score

FINRA

80-100 hrs

Study Time

Recommended

46%

Valuation

Largest section

$295

Exam Fee

FINRA

4h 30m

Exam Duration

FINRA

The Series 86 exam has an estimated 70-75% first-time pass rate. It requires 73% to pass in 4 hours 30 minutes. The exam covers three major areas: Information and Data Collection (21%), Analysis and Financial Modeling (33%), and Valuation (46%). Prerequisites: SIE + firm sponsorship. Plan for 80-100 hours of study focusing on DCF, comparable analysis, and financial modeling.

Sample Series 86 Practice Questions

Try these sample questions to test your Series 86 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 198+ question experience with AI tutoring.

1Which SEC filing must be submitted by public companies within 60 days after the end of their fiscal year?

A.Form 10-Q

B.Form 10-K

C.Form 8-K

D.Form 13F

Explanation: Form 10-K is the annual report that public companies must file with the SEC within 60 days after their fiscal year end. It provides a comprehensive overview of the company's financial condition, including audited financial statements, MD&A, and risk factors. Form 10-Q is filed quarterly, Form 8-K is for material events, and Form 13F is for institutional investment managers.

2A research analyst is gathering data directly from company management through one-on-one interviews. This type of research is best classified as:

A.Secondary research

B.Primary research

C.Tertiary research

D.Desk research

Explanation: Primary research involves collecting data directly from original sources, such as management interviews, site visits, and company surveys. Secondary research uses data that has already been collected and published by others, such as industry reports, financial databases, and SEC filings. Tertiary research involves synthesizing information from primary and secondary sources.

3Which of the following financial information providers offers real-time market data, news, and analytics through its terminal-based platform?

A.Morningstar

B.Bloomberg

C.Standard & Poor's

D.Value Line

Explanation: Bloomberg is a leading provider of real-time market data, news, and analytics through its proprietary Bloomberg Terminal platform. While Morningstar, S&P, and Value Line all provide valuable research and data, Bloomberg is specifically known for its terminal-based real-time data service widely used by investment professionals.

4A company must file a Form 8-K with the SEC within four business days after which of the following events?

A.Quarterly earnings release

B.Change in control of the company

C.Annual dividend declaration

D.Routine board meeting

Explanation: Form 8-K must be filed within four business days of a material event, including changes in control of the company, bankruptcy, completion of significant acquisitions, departure of key executives, or changes in the company's certifying accountant. Quarterly earnings are reported in Form 10-Q, while routine board meetings do not trigger 8-K filing requirements.

5During a site visit, a research analyst observes that a manufacturing facility is operating at significantly below stated capacity. This observation is most relevant for assessing:

A.The company's liquidity position

B.The accuracy of management's production forecasts

C.The company's debt covenant compliance

D.The effectiveness of the company's hedging strategy

Explanation: Site visits allow analysts to verify management's claims about operations. Observing underutilized capacity directly impacts the assessment of production forecasts and operational efficiency. This qualitative data helps validate or question the quantitative projections provided by management in their financial guidance and SEC filings.

6Which of the following economic indicators is considered a leading indicator that may predict future economic activity?

A.Gross Domestic Product (GDP)

B.Consumer Price Index (CPI)

C.Purchasing Managers' Index (PMI)

D.Unemployment rate

Explanation: The Purchasing Managers' Index (PMI) is a leading indicator based on surveys of purchasing managers in manufacturing and services sectors. It tends to change before the overall economy changes. GDP, CPI, and unemployment are lagging indicators that reflect economic conditions that have already occurred rather than predicting future trends.

7A research analyst is reviewing a company's proxy statement (DEF 14A). Which of the following information would NOT typically be found in this filing?

A.Executive compensation details

B.Related party transactions

C.Quarterly revenue breakdown by segment

D.Proposals to be voted on at the annual meeting

Explanation: A proxy statement (DEF 14A) contains information about executive compensation, related party transactions, board nominations, and shareholder proposals. Quarterly revenue breakdowns by segment are typically found in Form 10-Q or 10-K filings, not in proxy statements. The proxy statement focuses on governance matters requiring shareholder votes.

8When conducting due diligence on a company's supply chain, which source would provide the most direct information about supplier concentration risk?

A.Company's 10-K risk factors section

B.Industry trade publications

C.Management's earnings call transcripts

D.Supplier contracts and purchase orders

Explanation: While all sources provide valuable information, the 10-K risk factors section is where public companies must disclose material risks including supplier concentration risk. This SEC-mandated disclosure requires companies to identify significant dependencies on single or limited suppliers that could materially impact operations.

9A research analyst discovers that a company's management has been selectively disclosing material non-public information to certain analysts ahead of earnings calls. Under Regulation Fair Disclosure (Reg FD), the analyst should:

A.Use the information to adjust financial models before public disclosure

B.Immediately file a complaint with FINRA

C.Notify the company that selective disclosure violates Reg FD

D.Disregard the information and wait for public disclosure

Explanation: Under Reg FD, when material non-public information is selectively disclosed, the company must promptly make public disclosure. The analyst who receives selective disclosure should not trade on or act upon this information until it becomes public. The analyst's ethical obligation is to disregard the information and wait for public dissemination to maintain fair and equitable information access.

10Which financial statement provides information about a company's cash inflows and outflows from operating, investing, and financing activities?

A.Income statement

B.Balance sheet

C.Statement of cash flows

D.Statement of stockholders' equity

Explanation: The statement of cash flows reports cash inflows and outflows categorized into operating activities (core business operations), investing activities (capital expenditures and acquisitions), and financing activities (debt and equity transactions). The income statement shows profitability, the balance sheet shows financial position, and the equity statement shows changes in ownership interests.

About the Series 86 Exam

The Series 86 is Part I of the Research Analyst qualification, covering analysis and valuation. It focuses on information and data collection (21%), analysis and financial modeling (33%), and valuation methodologies (46%) including DCF analysis, comparable company analysis, and precedent transactions.

Questions

85 scored questions

Time Limit

4 hours 30 minutes

Passing Score

73%

Exam Fee

$295 (FINRA)

Series 86 Exam Content Outline

21%

Information and Data Collection

SEC filings (10-K, 10-Q, 8-K), primary/secondary research, data sources, due diligence, and MNPI handling

33%

Analysis and Financial Modeling

Financial statement analysis, ratio analysis, revenue/expense modeling, working capital, and three-statement models

46%

Valuation

DCF analysis, WACC, terminal value, comparable company analysis, precedent transactions, multiples (P/E, EV/EBITDA, P/B), and sensitivity analysis

How to Pass the Series 86 Exam

What You Need to Know

Passing score: 73%
Exam length: 85 questions
Time limit: 4 hours 30 minutes
Exam fee: $295

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

Series 86 Study Tips from Top Performers

1Master DCF analysis including WACC calculation, terminal value methods (perpetuity growth and exit multiple), and sensitivity analysis

2Study comparable company analysis - know how to select comps, calculate multiples (P/E, EV/EBITDA, P/B), and apply them

3Understand precedent transaction analysis - control premiums, deal multiples, and selection criteria

4Practice financial statement analysis and ratio calculations - liquidity, profitability, leverage, and efficiency ratios

5Study SEC filings thoroughly - know the differences between 10-K, 10-Q, 8-K, and proxy statements

6Build comfort with three-statement financial models - income statement, balance sheet, and cash flow connections

7Learn revenue and expense modeling techniques including top-down and bottom-up approaches

8Understand MNPI handling requirements and information barrier procedures

Frequently Asked Questions

What is the Series 86 exam?

The Series 86 is Part I of FINRA's Research Analyst Qualification Examination. It covers analysis and valuation skills required to work as a research analyst, including information gathering from SEC filings, financial statement analysis, financial modeling, and valuation methodologies such as DCF, comparable company analysis, and precedent transactions. You must pass both Series 86 and Series 87 to be registered as a Research Analyst.

What is the Series 86 pass rate?

The Series 86 exam has an estimated pass rate of 70-75% for first-time test-takers. The exam has 85 scored questions plus unscored pretest items with a 73% passing score, taken over 4 hours 30 minutes. The technical nature of financial modeling and valuation calculations contributes to the difficulty.

What are the prerequisites for the Series 86?

You must pass the SIE (Securities Industry Essentials) exam and have firm sponsorship before taking the Series 86. A finance or accounting background is strongly recommended given the technical analytical content. After passing Series 86, you must also pass Series 87 (Part II) to complete the Research Analyst registration.

How long should I study for Series 86?

Plan for 80-100 hours of study over 8-12 weeks. Focus heavily on Valuation (46% of exam) including DCF analysis, WACC calculation, terminal value, comparable company analysis, and precedent transactions. Practice financial modeling and ratio analysis extensively. Complete at least 200 practice questions and score 80%+ consistently before scheduling.

What are the main topics on the Series 86?

The main topics are: Valuation (46%) covering DCF analysis, WACC, terminal value, comparable company analysis, precedent transactions, and multiples; Analysis and Financial Modeling (33%) covering financial statement analysis, ratio analysis, and three-statement models; and Information and Data Collection (21%) covering SEC filings, research sources, and MNPI handling.

What is the difference between Series 86 and Series 87?

Series 86 (Part I) covers analysis and valuation skills including financial modeling, DCF analysis, comparable company analysis, and data collection. Series 87 (Part II) covers regulatory administration and best practices including research report preparation, required disclosures, supervisory approval, and information dissemination. You must pass both exams to be registered as a Research Analyst.