Series 79 — Investment Banking Representative Exam Blueprint

How to Use This Exam Blueprint

Use this checklist as a practical study map for the FINRA Series 79 — Investment Banking Representative Exam, official code Series 79. It is designed to help you decide whether you are ready to practice exam-style questions, not to replace the official FINRA content outline or your firm’s compliance materials.

Work through each section in three passes:

1. Recognition pass: Can you identify the topic, document, party, rule concept, or calculation?
2. Application pass: Can you choose the correct action in a transaction scenario?
3. Exam-readiness pass: Can you explain why the wrong choices are wrong?

Because exact official weights are not provided here, the sections below are organized as readiness areas, not as a representation of exam weighting.

Series 79 readiness areas at a glance

Core transaction lifecycle checklist

Use this as a high-level map for investment banking scenarios.

Can you do this? High-value skills checklist

Check each item only if you can answer a scenario without relying on recognition alone.

Data collection and due diligence

• Identify which party needs which information: issuer, seller, buyer, investor, lender, underwriter, placement agent, counsel, accountant.
• Distinguish public information, confidential information, and material nonpublic information.
• Recognize when an investment banker must escalate a discrepancy, conflict, complaint, or suspected violation.
• Determine whether a document is used for internal analysis, external marketing, regulatory disclosure, or transaction execution.
• Spot missing diligence items in a prompt, such as debt terms, customer concentration, litigation, related-party transactions, or contingent liabilities.
• Explain why projections, management adjustments, and non-GAAP metrics require support and context.
• Match common diligence areas to their purpose.

Valuation and financial analysis

• Calculate enterprise value and equity value when given a capital structure.
• Select the appropriate valuation metric for a company type or transaction context.
• Interpret trading comparables versus precedent transaction comparables.
• Explain why control premiums, synergies, liquidity, growth, margin profile, and risk affect valuation.
• Normalize EBITDA or earnings when given one-time, nonrecurring, or unusual items.
• Recognize when a multiple is not meaningful because the denominator is negative, distorted, or not comparable.
• Build a basic sources and uses view for an acquisition or financing.
• Explain accretion and dilution at a conceptual level.
• Interpret leverage and coverage ratios from a lender or bond investor perspective.
• Distinguish market value, book value, face value, liquidation value, and intrinsic value.

Underwriting and new financing

• Distinguish common stock, preferred stock, debt, convertible securities, warrants, and units.
• Recognize differences between registered offerings and exempt/private offerings at a concept level.
• Identify offering documents and their purpose: registration statement, prospectus, preliminary prospectus, offering memorandum, term sheet.
• Understand syndicate roles such as bookrunner, lead manager, co-manager, underwriter, selling group, and placement agent.
• Recognize when offering communications, research, roadshows, or marketing materials create regulatory risk.
• Distinguish best efforts, firm commitment, bought deal, standby, and placement-agent concepts.
• Interpret underwriting spread, gross proceeds, net proceeds, discount, and use of proceeds.
• Identify conflicts involving compensation, distribution, research, affiliated parties, and issuer relationships.
• Recognize stabilization, allocation, aftermarket, and restricted-period concepts without assuming unstated facts.
• Know when the safest answer is to stop, disclose, supervise, or escalate rather than proceed.

M&A, tender offers, and restructuring

• Distinguish merger, stock purchase, asset purchase, tender offer, exchange offer, spin-off, divestiture, recapitalization, and leveraged buyout.
• Identify the purpose of an NDA, teaser, CIM, management presentation, process letter, LOI, and definitive agreement.
• Compare auction process versus negotiated sale.
• Recognize fiduciary, fairness, conflict, and disclosure concepts in board-level transaction questions.
• Explain why purchase price, form of consideration, working capital adjustment, escrow, earnout, and indemnity affect deal economics.
• Identify tender offer and exchange offer artifacts at a high level, including offer documents and target-company responses.
• Distinguish friendly and hostile transaction dynamics.
• Recognize restructuring alternatives: amend-and-extend, exchange offer, asset sale, recapitalization, bankruptcy process, liquidation.
• Apply priority-of-claims logic in a distressed capital structure.
• Explain why valuation in a restructuring may focus on enterprise value, recovery, collateral, cash flow, and feasibility.

Regulatory and ethics judgment

• Identify possible antifraud issues in statements, omissions, projections, and marketing materials.
• Recognize insider trading and tipping concerns.
• Distinguish permissible internal information sharing from improper dissemination of MNPI.
• Identify when a communication should be reviewed, approved, retained, or corrected.
• Recognize conflicts involving compensation, allocation, research, proprietary positions, affiliates, and personal interests.
• Understand why gifts, entertainment, outside business activities, private securities transactions, political contributions, and customer complaints may require firm procedures.
• Choose escalation when a scenario involves suspected fraud, inaccurate disclosure, unauthorized communication, or regulatory inquiry.
• Avoid assuming client sophistication eliminates disclosure, fairness, or antifraud obligations.

Financial calculation and interpretation checks

You do not need to turn every question into a model. For Series 79 readiness, focus on whether you can calculate the common metric, interpret it, and avoid using the wrong numerator or denominator.

Core formulas to know conceptually

\[ \text{Enterprise Value} = \text{Equity Value} + \text{Debt} + \text{Preferred Stock} + \text{Noncontrolling Interest} - \text{Cash and Cash Equivalents} \]\[ \text{Equity Value} = \text{Share Price} \times \text{Diluted Shares Outstanding} \]\[ \text{Net Debt} = \text{Debt} - \text{Cash and Cash Equivalents} \]\[ \text{Free Cash Flow} = \text{Operating Cash Flow} - \text{Capital Expenditures} \]\[ \text{Accretion / Dilution} = \frac{\text{Pro Forma EPS} - \text{Standalone EPS}}{\text{Standalone EPS}} \]

Calculation readiness table

Metric interpretation prompts

Data, documents, and artifact checklist

Series 79 questions often test whether you know what a document is used for and what risk it creates.

Scenario decision-point checks

Transaction communication workflow

When a question asks whether a banker may send, say, use, or discuss information, slow down and classify the information first.

    flowchart TD
	    A[Proposed communication] --> B{Is it public, confidential, or MNPI?}
	    B -->|Public| C{Is it fair, balanced, accurate, and approved if required?}
	    B -->|Confidential| D{Is recipient authorized and covered by agreement or firm procedure?}
	    B -->|MNPI| E{Is sharing permitted under information barriers and need-to-know rules?}
	    C -->|Yes| F[May be usable subject to firm procedures]
	    C -->|No| G[Correct, escalate, or obtain review]
	    D -->|Yes| H[Limit use and retain records as required]
	    D -->|No| I[Do not send; escalate]
	    E -->|Yes| J[Restrict use; follow wall-crossing and firm controls]
	    E -->|No| K[Do not share or trade; escalate]

Underwriting and offering scenarios

M&A and tender offer scenarios

Restructuring scenarios

Topic-area deep review checklist

1. Collection, analysis, and evaluation of data

2. Underwriting and new financing transactions

3. Mergers, acquisitions, tender offers, and financial restructuring

4. General securities industry regulations

Common weak areas and traps

“Ready or not?” self-assessment table

Final-week checklist

Seven-day review plan

Final 48-hour readiness checks

• I can explain enterprise value, equity value, net debt, EBITDA multiple, P/E, leverage, and coverage without notes.
• I can identify whether a question is testing valuation, transaction process, offering rules, communication rules, or ethics.
• I can spot when a prompt gives too little information to proceed and the correct answer is review or escalation.
• I can distinguish a prospectus, offering memorandum, CIM, teaser, pitch book, and fairness opinion.
• I can recognize MNPI and confidential information before deciding whether communication is allowed.
• I can explain the difference between public offering, private placement, secondary sale, and exempt resale concepts at a practical level.
• I can map M&A documents in approximate transaction order.
• I can identify conflicts of interest in banker compensation, research, allocation, board advice, and affiliated-party scenarios.
• I can walk through a distressed capital structure from senior claims to junior equity.
• I have reviewed every missed practice question and know whether I missed it because of knowledge, reading, calculation, or judgment.

Practical next step

Use this Exam Blueprint to choose your next practice set. Start with the weakest readiness area, complete a timed block, and update an error log with three columns: topic, missed decision point, and rule or calculation to review. Continue rotating through valuation, offerings, M&A, restructuring, and regulatory judgment until your misses are no longer concentrated in one area.