Accredited Investor Definition - Series 79 Exam Prep
The accredited investor definition is the single most-tested concept in Series 79 Regulation D coverage and sits inside the underwriting and new financing section of the exam outline. In this 9-minute explainer we map every individual qualifying path, every entity category, and the anti-abuse traps that appear in the most common wrong-answer choices, so you can lock the door on these questions before the proctor calls time.
By the end of this video you'll be able to confidently answer Series 79 questions about:
• Why the $1 million net-worth threshold excludes the primary residence but counts vacation homes and rental properties, and how home debt gets treated
• The two-year look-back income test at $200,000 individual or $300,000 joint, and why averaging one high year and one low year fails
• How the professional-license path works for Series 7, Series 65, and Series 82 holders, and why active employment is not required
• Why knowledgeable employees, directors, executive officers, and general partners get automatic accredited status as natural persons
• The $5 million thresholds for entities: total assets, assets under management, or investments, depending on entity type
• Why the anti-abuse rule blocks entities formed for the specific purpose of acquiring securities, and the massive exception when all owners are already accredited
• How the trust triple test combines the $5 million asset floor, the anti-abuse formation rule, and the sophisticated-person investment directive
📚 Free written study guide, flashcards, and adaptive practice quizzes for this section (no signup wall to read):
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▶️ CHAPTERS
0:00 Why accredited investors gate every Reg D safe harbor
1:41 The $1M net-worth path: primary-residence exclusion and debt traps
3:16 Two-year look-back income test and the averaging trap
4:15 Professional licenses, knowledgeable employees, and insider automatic qualification
5:02 Entity thresholds: assets, assets under management, or investments
6:18 Anti-abuse rule and the all-accredited-owners exception
7:11 Trust triple test: assets, formation purpose, sophisticated director
7:45 Rapid-fire exam recap
About this series:
Each Series 79 explainer covers one section of FINRA's Investment Banking Representative Examination. The full Series 79 has 75 scored questions plus 10 unscored pretest items and runs 150 minutes at Prometric, weighted heavily toward underwriting, new financing, and Regulation D exemptions. CertFuel breaks the exam into short units so you can study in focused question blocks and track your readiness to the 75% confidence threshold.
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