From the equity research associates that we work with, we get a consistent flow of common Series 86 Exam questions. Some show up again, and again, and again. It is a surprisingly very specific group of questions that tends to trip up our students.
In this post, we identify those questions. We will also shed some light on how frequently we hear whether or not these are likely to show up.
Common Series 86 Exam Questions
The top seven areas where common Series 86 Exam questions come up are:
- Understanding the impacts on the balance sheet and income statement for operating leases and finance leases.
- Understanding how goodwill is calculated using book value and/or fair value.
- Calculating diluted EPS with convertible bonds, or convertible preferred stock.
- Understanding foreign currency impact on companies that manufacture or sell goods overseas.
- Understanding the discounted cash flow model, and its associated terminal value, and terminal multiple.
- How asset impairments impact the income statement and balance sheet.
- How changes to balance sheet ratios such as DSO, and turnover ratios impact cash flow.
While all these topics have their own complications, they are all very core subjects that one should expect to show up on the exam.
General feedback from our students at Professional Exam Tutoring indicates that there is a very high probability that all of these sub-topics are highly likely to show up in one form or another.
In some instances, a calculation may be required, while in other instances understanding conceptually the theory behind them can be tested. Either way, you may take some comfort in knowing that almost every student we work with brings up every one of these topics.
How to Approach Each
In order to provide an explanation for each topic, this post would become tediously long. However, a broad recommendation is to thoroughly examine STC’s answers for the best explanation on how to answer each. That said, these questions are generally so confusing, and brought to us for a reason, such that we have one more recommendation.
Often, STC’s answers are insufficient at fully explaining certain problems, so talking to a live person with knowledge in this area can help.
While we tend to avoid shameless promotion, calling STC’s customer service can be helpful, or of course, a tutoring company like us. This is likely to be the most time efficient way to get these answers. While it has a cost, you can spend hours down an Investopedia rabbit hole trying to solve it yourself – and unfortunately there is no alternative resource out there other than STC.
All of that said, if you need any help, we are here with plenty of experience on the Series 86 Exam too! In the meantime, good luck studying!