What the Course Entails and Exam Details

This examination does not "cover rules," but rather focuses intensely on the technical skills required to analyze a company's financial health and valuation.

The syllabus is structured around two primary critical functions that define the job of a research analyst:

• Information Gathering and Synthesis (Function 1): You must demonstrate your ability to source relevant data from SEC filings, financial statements (Income Statement, Balance Sheet, Cash Flow), macroeconomic reports, and press releases. This section tests how well you can organize this data to build foundational financial models.

• Analysis and Valuation (Function 2): This is the core of the exam. You will be expected to perform sophisticated equity valuation using multiple methodologies, including Discounted Cash Flow (DCF), Dividend Discount Models (DDM), and relative valuation techniques (P/E, EV/EBITDA, P/B ratios).

• Core Concepts: In-depth knowledge of financial accounting principles (GAAP and IFRS differences), basic statistical analysis, and capital structure is essential.

What to Expect in the Final Exam

The Series 86 is a rigorous, technical challenge. It differs from many FINRA exams in that it requires significant calculation and data interpretation rather than just rule recall.

• Format: The exam consists of 100 multiple-choice questions.

• Time Limit: Candidates are given 4 hours and 30 minutes (270 minutes) to complete the test. This generous time allotment reflects the complex, multi-step nature of the analytical problems presented.

• Passing Score: The passing score is 73%.

• Specific Rules: A basic electronic calculator is provided by the testing center, and only the provided calculator may be used. Scratch paper is also provided for calculations.

The exam often features "case study" style questions, where a single scenario or financial statement vignette is used for a block of five or more calculation questions, meaning accuracy in your initial calculations is paramount.

How to Study and Exam Centers

Given the quantitative intensity of the Series 86, passive reading is insufficient. You must do the analysis.

• Actionable Strategies: Prioritize comprehensive practice exams that require you to build simple DCF models or solve multi-step valuation problems. Focus heavily on mastering accounting fundamentals and the formulas for all key financial ratios and valuation models.

• Practice Methods: Use simulated question banks that provide detailed explanations of how the correct answer is derived from the financial statements provided. If you do not have an accounting background, dedicate extra time to understanding how changes in the balance sheet ripple through the cash flow statement.

• Where to Take the Exam: The Series 86 exam is administered via computer at Prometric testing centers nationwide. When you are ready, your employing firm will file a Form U4 and schedule the exam appointment on your behalf. There are currently no permanent options for online proctoring for this specific, high-stakes qualification.

Job Opportunities from the Course

Successfully passing the Series 86 and its co-requisite (Series 87) unlocks prestigious career paths within the financial services industry. It is the gold standard for professionals aiming for roles involving equity research and valuation.

The specific job titles this qualification unlocks include:

• Equity Research Analyst (Sell-Side)

• Associate Research Analyst

• Equity Research Analyst (Buy-Side, depending on firm structure)

• Industry Specialist Analyst (e.g., Biotech, Energy)

• Financial Analyst (specifically in roles requiring public communication on equities)

• Investment Banking Analyst (where research publication is involved)