SIE Exam Practice Questions
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1. Which of the following market participants have a fiduciary responsibility to their customers?
a. Municipal Advisors
b. Broker Dealers
d. Market Makers
2. Which of the following takes money out of the money supply?
a. Fed’s purchase of securities
b. Moral suasion
c. Increasing the reserve requirements
d. Decreasing the discount rate
3. Which type of securities offering allows existing shareholders to purchase additional shares in the company, typically in proportion to their current holdings?
a. Private placement
b. Initial public offering
c. Secondary offering
d. Stock rights offering
4. A warrant gives the holder a right to purchase equity shares
a. in the secondary market
b. in the IPO
c. at a set price from the issuer
d. whenever new shares are issued
5. Which of the following is considered zero-coupon securities?
a. Municipal bonds
b. Treasury bills
c. Treasury bonds
d. Preferred stock
6. Which of the following is considered a Government Sponsored Enterprise?
a. Ginnie Mae (GNMA)
b. Tennessee Valley Authority (TVA)
c. Federal National Mortgage Association (Fannie Mae)
d. Sallie Mae (SLMA)
7. In an options transaction, the premium must be paid to the _________ by ___________.
a. option writer, settlement date
b. option writer, trade date
c. option purchaser, settlement date
d. option purchaser, trade date
8. Which of the following best describes Letter of Intent:
a. A written acknowledgement signed by an investor, with the investor promising to follow all industry rules.
b. A document informing an investor about how NAV works.
c. A written indication provided by the investor to purchase a set number of mutual fund shares in the future.
d. A signed authorization by the investor promising to repay borrowed funds.
9. To avoid penalties, assets held inside a Coverdell ESA must be used by the beneficiary’s:
a. 18th birthday
b. 25th birthday
c. 29th birthday
d. 30th birthday
10. A hybrid REIT combines which of the following two types of REITs?
a. Retail and Apartment
b. Mortgage and Healthcare
c. Commercial and Healthcare
d. Retail and Healthcare
11. The risk that the issuer will require the bond owner to sell the bond back to the issuer at a specific date and price is referred to as:
a. Default risk
b. Call risk
c. Price risk
d. Bond risk
12. ABC equity security recently traded as follows:
100 shares @ $50.00
100 shares @ $50.04
200 shares @ $50.10
The current NBBO is $50.09 – $50.12. What is the bid-ask spread?
13. Jane Investor has decided to sell short ABC stock. She sells 100 shares short at $78. The price of the stock decreases the next day to $75 when she buys the stock. Jane Investor has a(n) __________.
a. realized loss
b. realized gain
c. unrealized loss
d. unrealized gain
14. ABC Company has declared a 1-3 reverse stock split. You currently own 300 shares before the split, and the stock is worth $5. After the reverse stock split, what is your total position in ABC worth?
15. Under Reg T, the amount of margin that must be in the account when the account is first established is:
16. Which of the following is an example of the Integration stage of money laundering?
a. Creating complex financial transactions
b. Sending cash outside the country
c. Buying a business
d. Exchanging small dominated cash bills for large denominated cash bills
17. Which of the following is required on a customer confirmation?
a. Amount of taxable gain or loss
b. Trade capacity
c. Capital gain
d. Dividend date
18. When is a market maker permitted to receive compensation from an issuer?
a. Under no circumstances.
b. If the compensation is less than $1,000 per year.
c. If the compensation is connected to an investment banking transaction.
d. If the compensation is related to an issuer that is listed on a U.S. Exchange.
19. Which of the following would NOT make an individual be considered statutorily disqualified?
a. Findings by the CFTC that a person willfully violated commodity laws
b. Any misdemeanor conviction
c. Bar from membership in an SRO
d. State order barring association with a firm engaging in insurance or banking activities
20. Tony Smith, an MFP, would like to make a political contribution to a mayoral candidate in his local town. What is the maximum amount Tony can contribute in both the primary election and general election combined?
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SIE Practice Exam Answers: 1-a, 2-c, 3-d, 4-c, 5-b, 6-c, 7-a, 8-c, 9-d, 10-b, 11-b, 12-a, 13-b, 14-c, 15-c, 16-c, 17-b, 18-c, 19-b, 20-d
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FINRA SIE Exam Information
FINRA’s publicly published SIE Exam Outline is available here. Page 2 of the SIE Exam outline reviews what FINRA expects out of SIE Exam candidates, but the entire outline also provides some good information on question depth and focus. FINRA’s main SIE Exam page is located here. This main SIE Exam page provides broad information about the SIE Exam that students may find useful in their SIE Exam prep.
SIE Professor training videos are available on our YouTube Channel.
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Primary Securities Industry Regulator Websites
Financial Industry Regulatory Authority (FINRA) – www.finra.org
Securities and Exchange Commission (SEC) – www.sec.gov
BATS Exchange – www.batstrading.com
New York Stock Exchange – www.nyse.com
NASDAQ – www.NASDAQ.com
Chicago Board Options Exchange – www.cboe.com
Municipal Securities Rulemaking Board – www.msrb.org
Other Securities Industry Regulator Websites
Internal Revenue Service – www.irs.gov
Federal Reserve – www.federalreserve.gov
North American Securities Administrators Association – www.nasaa.org
Securities Investor Protection Corporation (SIPC) – www.sipc.org
Federal Deposit Insurance Corporation – www.fdic.gov
MSRB’s EMMA Portal – emma.msrb.org