Social Inequality: The Series 86/87 exams are entry-level tests that determine financial research analyst ability.
Before professionals may acquire the research analyst title, they must pass both exams administered by the Financial Industry Regulatory Authority (FINRA).
What Are the Exams in the 86/87 Series?
Individuals can then utilise this information to create in-depth reports that investors can use to make investment decisions.
To get the certification, candidates must also pass the Securities Industry Essentials (SIE) exam.
Professionals who pass the exam can work for broker-dealers as research analysts.
Anyone who wishes to work as a research analyst must pass the Series 86/87 tests.
FINRA is in charge of administering the tests
Financial measures, earnings modelling tools, and industry dynamics are all tested in Series 86.
Series 87 assesses knowledge of industry ethics and best practises.
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Getting a Glimpse of the Series 86/87 Exams
Investors and other market players have access to a fair market thanks to financial industry regulation.
Professionals are governed by ethics and standards that ensure they are looking out for their clients’ best interests rather than their own or their companies’ financial gain.
That is why it is critical that they take the necessary procedures to become certified in their respective disciplines.
Professionals who want to work as research analysts must pass the Series 86/87 tests.
They produce timely reports on potential investment possibilities for sales personnel, institutional investors, and other broker/dealer clients.
Investors utilise these reports to help them make investing decisions.
Those who pass the Series 86/87 exam can write or send out written or electronic communications that examine equities securities, corporations, and industry sectors.
Test takers must have a good understanding of company and industry analysis methods, as well as management study, to pass the Research Analyst exam.
Candidates must also comprehend the general supply and demand criteria for a specific industry or area.
Candidates must be familiar with financial measurements, earnings modelling methods, and industry trends in order to provide relevant and accurate financial reports.
- Particular Points to Consider
- The exam combines two tests into one:
Series 86 (Part I): This exam consists of 100 multiple-choice questions and 10 pretest questions and is used to assess a candidate’s understanding of the field.
- The Series 86 exam takes four and a half hours to complete. 1 Passing requires a score of 73 percent or above.
- Part II of the Series 87 part: This section examines regulatory administration and best practises in the profession.
It has 50 questions and a five-question pretest, all of which are about norms and ethics. The Series 87 exam takes one hour and 45 minutes to complete.
To pass, you must get a score of 74 percent or above.
The elements of the analysis-focused Series 86 are as follows:
Information and data collection is the first function.
Analysis, modelling, and valuation are functions 2 and 3 respectively.
The following sections make up the regulatory and best-practices-focused Series 87:
Function 3: Research Report Preparation
Dissemination of Information is the fourth function.
Guessing does not result in a loss of points. However, the exams are closed book, which means that test takers are not permitted to carry any reference materials with them.
Prerequisites and Exemptions for Series 86/87
Candidates must additionally pass the Securities Industry Essentials (SIE) exam to earn their research analyst title, as previously stated.
Professionals who want to work in the securities business take this exam.
It assesses their basic understanding of securities, including product kinds, risk, regulation, and forbidden actions.
Those who have passed both Levels I and II of the Chartered Financial Analyst (CFA) Exam, or both Levels I and II of the Chartered Market Technician (CMT) Certification Exam, may request an exemption from the Series 86 section only.
Without a CFA, candidates must first pass one of the following prerequisite exams: Series 7, Series 17, Series 37, or Series 38.
The following are major questions that applicants should expect in the exam, according to the FINRA website:
What are the prerequisites for supervisors of registered research analysts in terms of registration and qualifications?
Is it necessary for sell-side stock analysts to register as research analysts and pass the Series 86/87 examination?
Is NASD 1050 applicable to everyone who works in equity research or simply those who prepare a public-facing research report?
Is a research analyst hired by a FINRA member’s foreign broker/dealer affiliate obliged to register under Rule 1050 if the member utilises or distributes the analyst’s research reports in the United States in accordance with SEC Rule 15a-6?
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