Series 82 due diligence questions
These eight free questions are a small sample of the 4,000+ practice questions in the full Series 82 course. Look for the unresolved fact in each scenario. Collecting a report is only useful if the investigation evaluates what the evidence supports and what it contradicts.
An attractive memorandum, an audit, or an experienced management team can supply evidence. None is automatic permission to ignore a material discrepancy discovered during the firm’s own review.
Read the related topic guide for worked examples, or open the matching app lesson before answering. The questions below are original practice scenarios, not recalled FINRA exam items.
0 of 8 answered
Management says offering proceeds will fund new equipment, but a payment schedule directs most proceeds to an affiliate. What should the investigation address?
Use of proceeds is material to understanding the offering. The affiliate payments call for investigation of the discrepancy and potential conflicts. Printing, banking history alone, and a subscription do not resolve it.
An outside report gives a favorable assessment, while the firm’s own review finds inconsistent asset records. What is the appropriate response?
A report can inform due diligence, but contrary evidence requires attention. Investor wealth does not remove the firm’s obligation, and favorable conclusions do not guarantee the underlying facts.
Which investigation question best addresses business prospects?
Business prospects require examination of the economic assumptions and supporting evidence. Administrative organization and branding cannot establish that forecasts have a reasonable basis.
A firm previously reviewed an issuer’s successful offering. The issuer launches a different project. What should the firm avoid?
Prior experience can be useful context but does not replace review of the current offering. The new project may have different risks, facts, and use of proceeds.
Why document the steps and findings of an offering investigation?
Documentation allows the firm to understand and review its investigation. It is not a guarantee against complaints, a replacement for supervision, or an offering exemption.
A representative says sophisticated investors can do their own research, so the recommending broker-dealer need not investigate. What is wrong?
An investor’s ability to research does not discharge the recommending firm’s obligations. The firm needs an adequate basis for its activity rather than transferring the entire investigation to customers.
An issuer’s audited financial statements are part of the file. What conclusion is justified?
An audit can contribute evidence, but it does not establish future returns or validate every claim. Other facts and red flags remain relevant.
A salesperson wants to begin recommendations while an important management-background discrepancy is unresolved. What should the firm do?
A deadline does not remove a material concern. The firm should address the discrepancy and its significance through its review rather than accept convenient assurances.
This score describes one small, fixed practice set. It does not predict an official result. Review the explanation and the topic guide for each question you missed or guessed.
Choose another topic set, review the free flashcards, or return to the Series 82 course hub. The mixed practice test covers all four functions.