FINRA Series 82 Practice Test & Mock Exam

Series 82 rewards candidates who can work through private-offering communications, investor qualification, subscription documents, and compliant processing without missing the control or suitability issue. If you are searching for Series 82 sample questions, a practice test, mock exam, or simulator, this is the main Securities Prep page to start on web and continue on iOS or Android with the same account. This page includes 24 sample questions with detailed explanations so you can try the exam style before opening the full app question bank.

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What this Series 82 practice page gives you

• a direct route into the Securities Prep simulator for Series 82
• targeted practice around private placements, investor qualification, communications, and documentation workflow
• detailed explanations that show why the strongest private-offering response is the most defensible
• a clear free-preview path before you subscribe
• the same subscription across web and mobile

Series 82 exam snapshot

• Provider: FINRA
• Exam: Private Securities Offerings Representative Qualification Exam
• Practice reference: 50 practice questions in 90 minutes
• Registration context: generally paired with the SIE

Topic coverage for Series 82 practice

• Offering workflow: communications, solicitation, and private-placement process control
• Investor qualification: suitability-like checks, qualification concepts, and required documentation
• Subscription processing: compliant next steps, recordkeeping, and escalation-aware decision making

How Series 82 differs from similar routes

How to use the Series 82 simulator efficiently

1. Start with investor-qualification and documentation drills so the private-offering workflow becomes automatic.
2. Review every miss until you can explain which qualification, communication, or processing issue changed the answer.
3. Move into mixed sets once you can switch between offering, investor, and document scenarios without losing pace.
4. Finish with timed runs so the 90-minute pace feels controlled.

Free preview vs premium

• Free preview: 24 public sample questions on this page plus the web app entry so you can validate the question style and explanation depth.
• Premium: the full Series 82 practice bank, focused drills, mixed sets, timed mock exams, detailed explanations, and progress tracking across web and mobile.

Free samples and full bank

• Live now: this exact practice route is available in Securities Prep on web, iOS, and Android.
• On-page sample set: this page includes 24 public sample questions from the current practice coverage.
• Full app: open the Securities Prep web app or mobile app for broader timed coverage.

Good next pages after Series 82

• Series 79 if you are comparing private offerings against the broader investment-banking route
• Series 22 if you want the DPP representative route beside private offerings
• Series 24 if the target shifts into principal supervision
• FINRA if you want the broader specialist and representative route map first

Free review resources

Use these free SecuritiesMastery.com resources for concept review, then return to this page when you are ready to practice in Securities Prep.

• Series 82 Cheat Sheet
• Series 82 Study Guide

Focused sample questions

Use these focused Series 82 sample-question pages when you want to isolate one official topic area before returning to the mixed simulator.

• Private Placement Prospecting
• Customer Accounts
• Private Placement Recommendations
• Purchase Processing
• Free Series 82 Full-Length Practice Exam

24 Series 82 sample questions with detailed explanations

These sample questions cover multiple blueprint areas for Series 82. Use them to check your readiness here, then move into the full Securities Prep question bank for broader timed coverage.

Question 1

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A placement agent is conducting a Regulation D private placement on a best-efforts basis. Before an investor sends in a subscription package, the representative wants to email “pricing information.”

Exhibit: Term sheet excerpt

Price: Expected to be $10.00 per share; final price to be set at closing.
No assurance: Investment is speculative; no guarantee of results.

Exhibit: Draft email to investor

The offering is $10.00 per share (locked in). If you invest now, you will earn a guaranteed 12% annual return.

What is the representative’s best next step before sending any pricing communication?

• A. Revise the message to match the term sheet, remove any guarantee language, and submit it for firm approval before use
• B. Send the email as drafted, since the investor has not subscribed yet
• C. Accept the investor’s subscription and funds first, then provide pricing details at closing
• D. Send the email but follow up by phone to explain the price could change

Best answer: A

Explanation: In a private offering, any pricing-related communication must be consistent with the offering documents and be fair and balanced. Stating the price is “locked in” when the term sheet says it is set at closing is inconsistent, and claiming a “guaranteed” return is prohibited. The next step is to correct the content and route it through the firm’s approval process before sending it.

Question 2

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A registered representative is using a private-placement pitch deck that was approved by principal review 4 months ago. The issuer has since updated the PPM and term sheet, but the pitch deck still shows the old use-of-proceeds and fee disclosures, creating inconsistencies with the current offering documents.

Which statement is most accurate?

• A. The deck may be used as long as the issuer, not the broker-dealer, confirms the information is current.
• B. The deck may continue to be used if the representative provides an oral disclaimer that the PPM controls.
• C. The deck should be withdrawn, corrected to match current offering documents, re-approved before further use, and the firm should retain prior and revised versions with evidence of approval.
• D. Once a communication has been approved, it does not need re-approval unless regulators request it.

Best answer: C

Explanation: Private-offering marketing materials must be accurate, not misleading, and consistent with current offering documents. When a previously approved deck becomes outdated or inconsistent, the appropriate corrective action is to stop using it, update it, and obtain new principal approval before redistributing. The firm should also keep high-level records showing what was used and when, and who approved each version.

Question 3

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A customer is an accredited investor with $450,000 in liquid investments and asks about a private credit fund your firm is offering in a Regulation D private placement. The term sheet states: “No public market; transfers restricted; no investor redemption program; expected holding period 7–10 years.”

During the profile update, the customer states they expect to need $200,000 in 18 months for a home down payment.

Which action by the representative best aligns with suitability/best interest and fair, balanced communications standards when discussing this offering?

• A. Recommend it and note the lockup only in the PPM
• B. Explain the illiquidity and recommend a more liquid alternative
• C. Recommend using a margin loan to cover the liquidity need
• D. State the customer can likely resell quickly in a secondary market

Best answer: B

Explanation: Because the customer has a specific $200,000 liquidity need in 18 months, recommending a security with no redemption program and a 7–10 year holding period raises a clear illiquidity-based suitability/best interest concern. The representative should communicate the lack of marketability prominently and consider a more liquid approach rather than implying or relying on an exit that may not exist.

Question 4

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A broker-dealer is placement agent for a Regulation D Rule 506(b) private placement. To deliver the PPM quickly, a registered rep emails prospects a generic data-room link labeled “Confidential PPM.” The link requires no login and allows downloading. The next day, the rep learns one recipient forwarded the link to a coworker not on the firm’s pre-screened list.

What is the best next step in the workflow to address the special compliance risks of electronic distribution?

• A. Proceed to escrow since the PPM was marked confidential
• B. Accept subscriptions from anyone who claims to be accredited
• C. Disable the open link and move materials to a secure, gated portal
• D. Send the forwarded coworker the link with an NDA request

Best answer: C

Explanation: Electronic delivery of private offering materials creates added risks: unintended persons can access the offer, recipients can forward materials, and different versions can circulate. The immediate control is to shut down open access and re-deliver through a controlled system that limits who can view, tracks recipients, and provides a single authorized set of documents.

Question 5

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A registered rep is processing a client’s subscription for a Reg D private offering. The client is already verified as accredited and has completed the firm’s suitability profile. The client emails an executed subscription agreement and a check payable to the escrow agent.

The rep has only sent a term sheet, which discloses that the broker-dealer will receive a selling concession and a dealer manager fee, and the broker-dealer’s affiliate will receive warrants. Before forwarding the package for acceptance/escrow, what is the rep’s best next step in the workflow?

• A. Forward the subscription and check to escrow immediately
• B. Deposit the check to the firm’s operating account pending closing
• C. Deliver the PPM and written compensation/conflict disclosure for acknowledgement
• D. Send a trade confirmation now and disclose compensation at closing

Best answer: C

Explanation: Private offering compensation (selling concession/commission, dealer manager fee, and warrants) creates a conflict because the firm or its affiliate benefits if the investor participates. The rep should ensure the client receives the PPM and clear written disclosure of these compensation elements and acknowledges receipt before moving the subscription forward for acceptance and escrow processing.

Question 6

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

Which statement is most accurate about sharing market, investment, or research data with customers in connection with a private placement?

• A. If a report is from an independent third party, it may be forwarded without review as long as it is not altered.
• B. Because it is a private offering, projected returns may be described as guaranteed if clearly labeled as a projection.
• C. To avoid misleading implications, representatives should not provide any market or research data to customers for private placements.
• D. Communications may include performance or research data if fair and balanced, with material assumptions/limits disclosed and no implication of guaranteed results.

Best answer: D

Explanation: Private placement communications still must be fair and balanced and must not imply that outcomes are certain. Market, investment, and research data can be used, but only with context and disclosure of material assumptions and limitations so customers are not led to believe results are guaranteed.

Question 7

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A broker-dealer is distributing a private placement through an online portal to a limited set of pre-screened investors. A new institutional prospect selects the deal and clicks “Start Subscription.” The portal has only captured the entity’s legal name, address, and an email for the signer.

Before the portal releases the PPM and subscription package for e-signature, what is the best next step to support the investor’s eligibility and authorization?

• A. Release the PPM immediately and collect eligibility documents at funding
• B. Accept the e-signed subscription and then request a QIB letter before closing
• C. Collect a completed investor questionnaire plus QIB documentation and signer authority
• D. Send trade confirmation disclosures and then request an accredited investor form

Best answer: C

Explanation: In an online private placement workflow, the firm should document investor eligibility and the signer’s authority before granting access to offering materials and initiating the subscription process. For an institutional prospect claiming QIB status, that means collecting a completed investor questionnaire and obtaining support for QIB qualification, along with documentation showing the individual is authorized to sign for the entity. This creates a reasonable basis for eligibility and proper authorization early in the sequence.

Question 8

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A broker-dealer is acting as placement agent for a Regulation D private placement sold only to accredited investors. The offering is conducted on a best-efforts basis with a stated minimum of $10 million that must be raised within 60 days; if the minimum is not met, investors must receive their money back. Several investors have delivered checks with signed subscription agreements, but the issuer asks that the checks be deposited into the issuer’s operating account immediately because it has a short-term cash need. What is the single best action the representative should recommend to control the handling of offering proceeds?

• A. Use a written escrow and refund promptly if minimum unmet
• B. Hold checks at the broker-dealer until the minimum is met
• C. Deposit checks into the issuer’s operating account with disclosure
• D. Deposit funds into a broker-dealer customer account until closing

Best answer: A

Explanation: Because the offering has a minimum contingency and deadline, investor funds should not be available to the issuer until the minimum is achieved and closing conditions are met. A written escrow agreement with clear release and refund terms reduces commingling risk and supports prompt refunds if the minimum is not reached. This aligns funds flow with the offering terms investors relied on.

Question 9

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

Which statement is most accurate regarding a firm’s privacy notice and the timing of the initial privacy disclosure to a new private-placement customer?

• A. It is first delivered only after the customer submits a written request for the policy.
• B. It explains information-sharing practices and is typically delivered when the customer relationship is established.
• C. It is only required if the firm shares customer information with affiliates.
• D. It primarily discloses margin rates and loan terms and is delivered after the first trade.

Best answer: B

Explanation: A privacy notice is a high-level disclosure describing a firm’s policies for collecting, safeguarding, and sharing customers’ nonpublic personal information, including any opt-out rights when applicable. The initial notice is typically provided when the customer relationship is established, such as at account opening for a private placement customer.

Question 10

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

Which statement is most accurate about matching an investor’s objective to a broad private-offering risk profile?

• A. An investor seeking long-term growth is generally a better fit for short-duration private notes because principal is scheduled to be returned.
• B. An investor seeking current income is generally a better fit for senior secured private debt than for early-stage private common equity.
• C. An investor with a speculative objective is generally a better fit for investment-grade private debt because price volatility is typically lower.
• D. An investor seeking capital preservation is generally a good fit for early-stage private equity because the company is privately held.

Best answer: B

Explanation: Investment objectives should align with how a private offering is expected to deliver returns and the level of risk involved. Income objectives typically pair best with offerings designed to make periodic payments (such as private debt). Early-stage private equity is generally oriented toward growth and has higher uncertainty and loss risk, making it a poor match for income-focused investors.

Question 11

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

Which statement about due diligence in a private placement is most accurate?

• A. It eliminates liability as long as the firm relies on the issuer’s representations.
• B. It replaces the need for the issuer to provide a private placement memorandum.
• C. It is primarily performed to guarantee investors a minimum return on the offering.
• D. It supports a reasonable basis for communications and helps reduce antifraud liability risk.

Best answer: D

Explanation: Due diligence helps the firm develop a reasonable basis for what it communicates to prospective investors in a private offering. By verifying key facts and identifying red flags, it reduces the likelihood of materially misleading statements or omissions and supports liability risk management under antifraud principles.

Question 12

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A broker-dealer is acting as dealer manager for a Regulation D private placement and has formed a selling group of three firms. The PPM discloses a uniform 6% selling concession and states that no other selling compensation will be paid.

To reduce the risk of undisclosed side deals or inconsistent compensation among selling group members, which action is INCORRECT?

• A. Pay all selling compensation through the dealer manager after subscription reconciliation
• B. Require member certifications of no outside payments and retain related communications
• C. Allow an issuer-paid marketing allowance if the firm invoices after the closing
• D. Use a selling group agreement that bans off-schedule compensation without written approval

Best answer: C

Explanation: A key control in a selling group is ensuring all compensation is disclosed, standardized, and paid only as authorized. Allowing any issuer-paid “marketing allowance” outside the PPM’s stated compensation undermines those controls by creating a side arrangement. Post-closing invoicing does not cure the lack of prior disclosure and approval.

Question 13

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A broker-dealer is acting as placement agent for a Regulation D private placement being sold on a best-efforts, contingency basis. The term sheet states: “Minimum raise $20 million; maximum $40 million. Investor funds will be held in a third-party escrow and will be released to the issuer only after the minimum is met. If the minimum is not met by June 30, 2026, the offering will terminate.”

As of June 30, 2026, the issuer has accepted only $16 million in subscriptions and instructs the placement agent to stop selling the offering. What is the most likely outcome that investors should be told to expect regarding closing and their funds?

• A. A partial closing occurs and $16 million is released to the issuer
• B. The issuer may keep escrowed funds as compensation for expenses
• C. Investors become shareholders but may rescind later on request
• D. Escrowed funds are returned promptly because the minimum was not met

Best answer: D

Explanation: This is a contingency offering with a stated minimum and a hard deadline, with funds held in escrow until the minimum is met. Because the minimum was not reached by the deadline and the issuer terminated the offering, there is no closing and investors should expect their subscription funds to be returned from escrow promptly.

Question 14

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

A broker-dealer acting as placement agent for a Reg D private placement must open an account for each investor before accepting a subscription. A supervisor is comparing two intake packages.

Package 1

• Completed firm new account form (name, address, DOB, taxpayer ID)
• Employment/affiliations, investment objectives, risk tolerance
• Financial profile (income, net worth, liquid net worth)
• Customer signatures/attestations; authorized signers (if applicable)
• CIP completed and identity verified before accepting funds

Package 2

• Signed subscription agreement and accredited investor questionnaire only
• No investment objectives or financial profile collected
• CIP planned “after funding”

Which package best matches the account-opening control objective of collecting complete and accurate customer information?

• A. Either package, if the investor is accredited
• B. Package 1
• C. Package 2
• D. Package 2, if the issuer vouches for the investor

Best answer: B

Explanation: At account opening, the firm’s objective is to obtain and maintain complete, accurate customer identity and profile information that supports CIP/KYC and evaluating the customer’s financial profile and investment objectives. A subscription agreement and accredited investor questionnaire do not replace the firm’s own new account information and verification steps. The package that collects and validates this information before accepting funds best meets the control objective.

Question 15

Topic: Function 2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

A registered representative is preparing to recommend an illiquid private credit fund (sold under Regulation D) to a new investor who has provided only proof of accredited investor status and a completed subscription agreement. Which statement about “essential facts” needed for a recommendation is INCORRECT?

• A. Essential facts include investment objectives and risk tolerance
• B. Accredited status alone is enough to make the recommendation
• C. Essential facts include the customer’s financial situation and needs
• D. Essential facts include relationship details like decision-making authority

Best answer: B

Explanation: Essential facts are the core information about the customer and the customer relationship that a firm uses to evaluate whether a recommendation is appropriate. Verifying that an investor is accredited addresses eligibility for the private offering, but it does not determine whether the investment fits the investor’s objectives, risk tolerance, liquidity needs, and overall financial profile.

Question 16

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A Series 82 rep emails a one-page “teaser” for a Reg D private placement to 45 prospective investors. It states: “Target 18% annual return with downside protection,” shows a back-tested performance chart, and includes only a brief risk line (“Investing involves risk”). Two days later, the firm’s compliance department reviews the email and finds no documentation supporting the chart or the “downside protection” claim and no meaningful discussion of illiquidity or loss of principal.

What is the most likely compliance outcome for the firm?

• A. No remediation needed because it was sent only to prospective investors
• B. Immediate stop-use and corrective follow-up, with revised balanced disclosures
• C. The firm can keep using it if recipients confirm they are accredited
• D. The only required fix is adding a Reg D legend to the existing teaser

Best answer: B

Explanation: The teaser presents a performance target and “downside protection” in a way that is potentially misleading without support, assumptions, and prominent, specific risk disclosure. In private offering communications, firms must ensure claims are fair and balanced and can be substantiated. The typical outcome is stop-use, remediation through rewritten materials, and corrective communication to recipients under supervisory control.

Question 17

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

Your firm is a selling agent for a Regulation A Tier 2 offering of an illiquid real estate fund. A 68-year-old, non-accredited investor with a stated 2-year time horizon calls after seeing the firm’s social media teaser and wants to subscribe today; the investor has not yet completed the firm’s investor eligibility questionnaire. The firm will receive a selling concession on any accepted subscriptions.

To evidence Regulation A communication approvals, investor eligibility processing, and delivery of offering materials, which record set should the representative ensure is retained in the transaction file before accepting the subscription?

• A. Approved teaser, eligibility questionnaire, and offering circular delivery proof
• B. Issuer’s final offering circular, without delivery acknowledgments
• C. Subscription agreement and evidence of funds receipt only
• D. A copy of the teaser as posted, without approval evidence

Best answer: A

Explanation: A Reg A file should support what was communicated, that communications were appropriately approved, that the investor eligibility process was completed, and that the offering circular was delivered before the investor committed. Retaining the approved version of the teaser, the completed eligibility documentation, and verifiable delivery evidence best satisfies these control and recordkeeping needs.

Question 18

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

In a Regulation D private placement, which document is intended to disclose offering expenses and selling compensation so investors understand the issuer’s estimated net proceeds (and are not misled about how much capital the issuer will actually receive)?

• A. Subscription agreement
• B. Indication of interest (IOI)
• C. Dealer manager
• D. Private placement memorandum (PPM)

Best answer: D

Explanation: Offering expenses and compensation reduce the cash the issuer actually receives, so investors need clear disclosure of those items to understand estimated net proceeds. In private offerings, that disclosure is typically made in the offering’s disclosure document. The PPM is designed to present these material terms in a fair, not-misleading way.

Question 19

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A broker-dealer is the dealer manager for a qualified Regulation A Tier 2 offering. Retail investors have received the offering circular, completed investor questionnaires, signed subscription agreements, and wired funds to an escrow agent. Two days before the scheduled closing, the issuer announces a significant acquisition that materially changes its business description and pro forma financial information.

What is the broker-dealer’s best next step before accepting additional subscriptions or proceeding to closing?

• A. Proceed because Regulation A securities can trade freely in the secondary market
• B. Close as scheduled and send an update to investors after confirmations
• C. Pause sales and closing until an updated offering circular is filed and delivered
• D. Continue accepting subscriptions if investors acknowledge the news in writing

Best answer: C

Explanation: Regulation A offerings involve not just initial delivery of the offering circular, but also keeping disclosure current when a material event occurs. A material acquisition triggers the need to update the offering circular before continuing the selling process. Having current filed information matters for what the firm can communicate to investors and for market participants who may rely on public updates for secondary trading decisions.

Question 20

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A first-time accredited investor says, “If I need the money back in 2 years, can I get it then?” You are discussing a private fund that closed on April 10, 2026.

Exhibit: Redemption terms (summary)

• 24-month lockup from closing
• After lockup, redemptions only at quarter-end (March 31, June 30, September 30, December 31)
• Written notice required at least 60 days before the quarter-end redemption date

Which response best tailors the illiquidity risk so the customer can reasonably understand it?

• A. Lockup ends April 10, 2028; earliest quarter-end is June 30, 2028; notice by May 1, 2028.
• B. You can redeem on April 10, 2028, since the lockup ends then.
• C. Your first redemption date is March 31, 2028, with notice by January 31, 2028.
• D. You can redeem June 30, 2028, as long as you notify us by June 1, 2028.

Best answer: A

Explanation: A fair, balanced, and tailored illiquidity explanation should convert the fund’s redemption terms into a simple timeline the investor can understand. From an April 10, 2026 close, a 24-month lockup ends April 10, 2028, and the first available quarter-end afterward is June 30, 2028. Because notice must be at least 60 days in advance, the investor would need to submit notice by May 1, 2028.

Question 21

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A Series 82 representative is helping the firm act as placement agent for a private offering. During due diligence, the rep completes an internal checklist, keeps call notes from management meetings, and receives a third-party background report and industry report under an NDA (each includes some sensitive personal data). The rep wants to “clean up” files before marketing begins.

Which action best aligns with high-level documentation and retention expectations for due diligence work?

• A. Keep only the final due diligence memo and discard notes and third-party reports
• B. Maintain the file on the rep’s encrypted personal drive to reduce firm system access
• C. Return or destroy all third-party reports once summarized so the firm does not have to retain them
• D. Store all due diligence materials in the firm’s approved system with access controls and retain them per the firm’s record schedule

Best answer: D

Explanation: Private placement due diligence must be supported by a defensible record that shows what was reviewed and why conclusions were reached. That generally includes checklists, contemporaneous notes, and third-party reports, kept in the firm’s approved books-and-records environment with controls for confidentiality and record integrity. Retention should follow the firm’s regulatory record schedule, even if the deal later changes or is not marketed.

Question 22

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A representative is reviewing a client’s objectives (income-focused, low tolerance for price volatility) against a private placement term sheet.

Exhibit: Term sheet snippet (Series A Convertible Preferred)

Dividend: 6% cumulative, payable in cash while outstanding.
Conversion (holder): At any time, 1:1 into common stock.
Mandatory conversion: Automatically upon a “Qualified IPO.”
After any conversion: Preferred is cancelled; no further dividend.
Risk note: Common stock price may be volatile.

Which interpretation is best supported by the exhibit?

• A. Mandatory conversion may eliminate dividends and increase equity volatility
• B. Mandatory conversion guarantees liquidity at a fixed redemption value
• C. The investor can decline conversion and keep preferred dividends
• D. Convertibility ensures downside protection equal to par value

Best answer: A

Explanation: Convertibility changes the investment’s risk/return profile by embedding an equity-like outcome into a preferred security. The exhibit states conversion cancels the preferred and stops the dividend, and it also highlights common-stock volatility. That means a forced conversion event can conflict with an income/low-volatility objective.

Question 23

Topic: Function 1 — Seeks Business for the Broker-Dealer from Customers and Potential Customers

A member firm wants to participate in a Regulation D private placement being run by a dealer manager. The firm has received the following excerpt from the proposed selling group agreement:

• Eligibility: Only registered associated persons approved by the dealer manager may solicit.
• Communications: Only dealer-manager-approved offering materials may be used; other communications require prior approval.
• Reporting: Selling group members must provide periodic sales reports and promptly transmit investor documentation as instructed.
• Condition: “No solicitation or acceptance of subscriptions may occur until this agreement is executed and countersigned by the dealer manager.”

A Series 82 representative at the firm has an interested accredited investor and is ready to send the PPM and investor questionnaire. What is the best next step?

• A. Obtain a fully executed selling group agreement before soliciting
• B. Send a customized email summarizing projected returns to the investor
• C. Send the PPM now and execute the agreement after receipt
• D. Accept the signed subscription agreement and forward it to escrow

Best answer: A

Explanation: A selling group is used to coordinate multiple broker-dealers distributing an offering under a dealer manager, and the selling group agreement is the control document that governs how members may participate. Here, the agreement explicitly conditions solicitation on execution and also sets core controls over who may solicit, what communications may be used, and what reporting must be provided. Therefore, solicitation cannot start until the agreement is fully executed.

Question 24

Topic: Function 3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records

A private placement representative attends a broker-dealer–hosted corporate access lunch with the CFO of an issuer that is considering a private financing. During Q&A, the CFO states the issuer’s quarterly revenue will be “materially above guidance” and adds that the results will not be publicly released until next week. After the event, an investor calls asking what the representative learned.

Which option best matches the correct communication boundary and escalation step?

• A. Ask the issuer’s IR team to confirm, then communicate it as due diligence
• B. Share it only with accredited investors who sign a confidentiality agreement
• C. Provide a high-level summary as long as no numbers are mentioned
• D. Do not share the information and immediately escalate to Compliance for restricted-list/controls

Best answer: D

Explanation: The CFO’s comment about materially better-than-guidance results before public release is material nonpublic information. The representative must not communicate it to any customer and should promptly escalate internally so the firm can implement appropriate controls (for example, restricting trading/solicitation and documenting the event). This is the practical Regulation FD/MNPI boundary in corporate access.

Series 82 private securities offerings map

Use this map after the sample questions to connect individual items to private placement structure, investor qualification, suitability, due diligence, communications, and offering exemptions these Securities Prep samples test.

    flowchart LR
	  S1["Private offering or investor scenario"] --> S2
	  S2["Identify exemption investor and issuer facts"] --> S3
	  S3["Review diligence risks and disclosure"] --> S4
	  S4["Assess suitability concentration and liquidity"] --> S5
	  S5["Handle communications compensation and records"] --> S6
	  S6["Escalate red flags and document rationale"]

Quick Cheat Sheet

Mini Glossary

• Private placement: Non-public securities offering subject to suitability, disclosure, and regulatory constraints.
• Suitability: Assessment that a recommendation fits the customer profile and the representative’s obligations.
• Communications: Retail and institutional content subject to approval, recordkeeping, and fair-balanced standards.
• Underwriting: Investment banking process for structuring, pricing, distributing, and settling offerings.
• Product review: Understanding product structure, risks, costs, liquidity, conflicts, and investor outcomes.

In this section

• Series 82: Private Placement Prospecting
  Try 10 focused Series 82 questions on Private Placement Prospecting, with explanations, then continue with the full Securities Prep practice test.
• Series 82: Customer Accounts
  Try 10 focused Series 82 questions on Customer Accounts, with explanations, then continue with the full Securities Prep practice test.
• Series 82: Private Placement Recommendations
  Try 10 focused Series 82 questions on Private Placement Recommendations, with explanations, then continue with the full Securities Prep practice test.
• Series 82: Purchase Processing
  Try 10 focused Series 82 questions on Purchase Processing, with explanations, then continue with the full Securities Prep practice test.
• Free Series 82 Full-Length Practice Exam: 50 Questions
  Try 50 free Series 82 practice questions across the official topic areas, with answers and explanations, then continue with the full Securities Prep question bank.