Download SIE Exam Practice Questions: Comprehensive Multiple Choice Review and more Exams Advanced Education in PDF only on Docsity!
Comprehensive SIE Practice Exam multiple choice The primary purpose of a syndicate desk in the context of an equity offering is to: build an order book and allocate the stock 3 multiple choice options Which of the following responses describes an advantage of index funds? Lower management fees due to passive management of the fund 3 multiple choice options Which of the following comparisons best describes the essential difference between a primary distribution and a secondary distribution? A primary distribution involves a sale of newly issued shares by the issuer while a secondary distribution involves the sale of already issued and outstanding shares. 3 multiple choice options The computation of dollar prices and accrued interest on municipal bonds is normally on what calendar basis? 30/ 3 multiple choice options Direct participation programs (DPPs) provide: exposure to non-correlated assets 3 multiple choice options Call protection is most valuable to a bond owner when bond prices are generally: rising 3 multiple choice options Which of the following represents the effect of a stock split? The price per share of common stock decreases 3 multiple choice options Stability in the value of a debt portfolio is greatest when: maturities of the debt securities are short.
3 multiple choice options Which of the following actions is required of a broker-dealer's anti-money laundering (AML) program? Designating an AML compliance officer 3 multiple choice options Which of the following actions violates FINRA rules regarding selling away? Engaging in private securities transactions without written prior consent of the employing BD 3 multiple choice options Company ABC announces a 20% stock dividend for its common shareholders. If a customer holds 1,000 shares at $50.00, what is the new price and number of shares following the payment of the stock dividend? 1,200 shares at $41. 3 multiple choice options We have an expert-written solution to this problem! Roth 401(k) and Roth individual retirement account (IRA) plans share which of the following features? Qualified distributions are excluded from federal income tax 3 multiple choice options An associated person who is not a registered representative is permitted to engage in which of the following activities? Provide account opening forms to a new customer 3 multiple choice options The last transaction in XYZ 5.50s 2030 was at 102. This bond is selling at: a premium 3 multiple choice options A registered representative (RR) who wants to place a mutual fund advertisement must obtain written approval from which of the following parties? A registered principal of the RR's firm
3 multiple choice options In the event of a stock split, which of the following parties is required to maintain a record of the shareholders eligible to receive the additional shares? Transfer agent 3 multiple choice options UTMA accounts are opened under the tax ID of the: minor 3 multiple choice options Under industry regulations, an initial purchase of $3,000 of common stock in a margin account requires a cash deposit of: $2, 3 multiple choice options We have an expert-written solution to this problem! At issue, which of the following debt securities mature in one year or less? Money market instruments 3 multiple choice options Which of the following considerations should a registered representative explain to a customer when recommending a 529 savings plan? The potential deductibility of contributions from state taxes 3 multiple choice options A transaction in which a writer covers a position by purchasing an option is called: a closing purchase 3 multiple choice options Broker-dealer ABC seeks to underwrite a municipal securities offering by a local town in which the mayor is currently seeking re-election. A municipal finance professional who resides in the town and works for ABC contributed $200 to the mayor's re-election campaign 13 months ago. If the employee wants to support the campaign further without impacting
the municipal securities business of the firm, he is permitted to make an additional contribution of up to what amount? $ 3 multiple choice options In which of the following situations is an employee of a public company permitted to trade upon information without violating insider trading laws? An independent securities analyst explains to the employee why the earnings for the company next quarter could be markedly poorer than expected. 3 multiple choice options Which of the following stakeholders has first claim priority in a Chapter 11 proceeding? Secured debt holders 3 multiple choice options An investor owns 100 shares of XYZ common stock at the current market price of $50 per share. If XYZ conducts a 1-for-2 reverse stock split, the investor's post-split stock position will be: 50 shares at $100 per share 3 multiple choice options A registered representative is reviewing the following portfolio:
- 30% ABC Energy Company
- 30% XYZ Health Care Company
- 30% Exchange-traded fund (tracks the S&P 500)
- 10% Money market funds Which of the following risks is inherent in this portfolio? Nonsystematic 3 multiple choice options Which of the following communications with the public is considered misleading? Literature providing 10-year performance information to support predictions of future performance 3 multiple choice options
Which of the following statements is true regarding the concept of an annuity contract? The kind of annuity selected partly determines the payment amounts to the annuitant 3 multiple choice options When selling a fixed amount of a base currency to purchase a counter currency, which of the following factors is primarily used to determine how much of the counter currency the customer will receive? The spot exchange rate 3 multiple choice options If a market maker posts a quote of 10.00 - 10.10 [25×10], which of the following actions is the market maker willing to take? Buy 2,500 shares at $10.00 and sell 1,000 shares at $10. 3 multiple choice options No-load mutual funds may have lower expense ratios than load mutual funds for which of the following reasons? No-load funds are not permitted to charge a 12b-1 fee greater than 25 basis points 3 multiple choice options Under FINRA rules, noncash compensation connected with the sale of variable contracts includes all of the following items except: commissions 3 multiple choice options A customer has a cash balance in her account together with long positions in several securities. She has made no securities transactions in the account during the past 18 months. How often must the firm send her an account statement? Quarterly 3 multiple choice options Under Rule 144A, an issuer of restricted stock is permitted to sell to which of the following investors? Qualified institutional buyers (QIBs) 3 multiple choice options
Under FINRA rules, which of the following activities by a registered representative requires written notification to her firm? Driving part time for a transportation network company on weekends 3 multiple choice options Which of the following security types provides investors with a stated maturity date, a floating interest rate, and an option to put the security back to a financial intermediary on a daily or weekly basis? Variable rate demand note 3 multiple choice options Which of the following investments are generally traded according to their average life rather than their stated maturity dates? Asset-backed securities 3 multiple choice options Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes which of the following positions? The same stock in a cash account without paying for the stock in full 3 multiple choice options Blue-sky laws are regulated by which of the following entities? State securities regulators 3 multiple choice options A company announces a tender offer to its shareholders with the intent to buy a maximum of 1 million shares of its outstanding stock at $10 per share and sets no minimum number of shares to be purchased. An investor wants to participate in this offer and tenders his 1,000 share position. At the close of the offer period, only 900,000 shares have been tendered. How many, if any, of the investor's shares will the company purchase? 1, 3 multiple choice options Which of the following statements is true about all U.S. government agency issues? They are exempt from registration under the Securities Act of 1933 3 multiple choice options
Which of the following products is adversely impacted if the issuer's credit rating is downgraded? Exchange-traded notes (ETNS) 3 multiple choice options Which of the following Form U4 reportable events results in a statutory disqualification? A felony conviction for a driving under the influence (DUI) charge 3 multiple choice options A customer is an officer of a company that is involved in some significant changes. All of the following items are examples of corporate affairs that could be considered insider information if the customer shares them with his registered representative except: declared stock dividends 3 multiple choice options Under SEC Regulation S-P (Consumer Privacy), which of the following information must a firm include in its customer privacy and opt-out notices? The policies to protect the security of nonpublic information 3 multiple choice options A broker-dealer is permitted to accept payment for a new issue from a new customer when the: registration is effective 3 multiple choice options When a broker-dealer charges a commission on a securities transaction, it has acted as: an agent 3 multiple choice options A firm is a participant in a public offering. To sell a substantial amount of the securities to its customers, the firm agrees to repurchase the shares at no less than the original sales price. Such agreements are: prohibited as fraudulent and manipulative 3 multiple choice options
Upon expiration, all in-the-money S&P 100 Index call options are settled by the delivery of which of the following? Cash 3 multiple choice options A married couple who earned income that exceeded $300,000 in each of the prior two years and reasonably expects the same for the current year is: an accredited investor 3 multiple choice options Under a system of statutory voting, a common stockholder has as many votes for each vacancy on the board of directors as the number of: shares owned by the stockholder 3 multiple choice options Which of the following outcomes are possible for the writer of a covered call option? Profit limited and loss limited 3 multiple choice options Which of the following products is considered a cheaper alternative to a mutual fund? ETF 3 multiple choice options Which of the following would be considered the broadest market index? Wilshire 5000 3 multiple choice options Which of the following is a banking product rather than a security? Certificate of deposit 3 multiple choice options All of the following investment companies carry investment risk to the holder EXCEPT: Fixed UIT 3 multiple choice options
An individual would be barred from association with a FINRA member firm for which of the following? Conviction of a securities-related misdemeanor 9 years ago 3 multiple choice options How long are shelf registrations with the SEC good for? Three years 3 multiple choice options When a stop order is triggered, what does it become? Market order 3 multiple choice options Which of the following securities is issued below the CMP of the stock and has intrinsic value at issuance? Rights 3 multiple choice options When market interest rates go up, a bond's: CY goes up 3 multiple choice options What risk do DPPs have that makes it harder for the investor to retrieve their funds? Liquidity risk 3 multiple choice options Which law covers the registration of mutual funds? Investment Company Act of 1940 3 multiple choice options What document is given to an investor who purchases a municipal bond? Official statement 3 multiple choice options Which of the following securities is a form of T-bond where the coupon and principal payments are detached from the bond itself and sold separately? STRIPS
3 multiple choice options Failing to make a customer aware of an upcoming quantity discount available through a mutual fund is: A breakpoint sale and is prohibited 3 multiple choice options The computation of dollar prices and accrued interest on corporate bonds is normally on what calendar basis? 30/ 3 multiple choice options The main function of a market maker in the context of an equity offering is to: Buy and sell the shares at quoted bid and ask prices. 3 multiple choice options A bond owner benefits from a sinking fund provision when bond prices are generally: falling. 3 multiple choice options The sensitivity of a debt portfolio to changes in interest rates is measured by: duration. 3 multiple choice options Which of the following actions violates FINRA rules regarding outside business activities? Receiving compensation from another entity without notifying the employing BD 3 multiple choice options Company DEF announces a 10% stock dividend for its common shareholders. If a customer holds 500 shares at $40.00, what is the new price and number of shares following the payment of the stock dividend? 550 shares at $36. 3 multiple choice options The last transaction in ABC 6s 2030 was at 98. This bond is selling at:
ADRs 3 multiple choice options When a corporation goes public, it is issuing: Common stock 3 multiple choice options Every publicly-traded corporation is required to have a transfer agent and a registrar. The primary distinction between the two is: The transfer agent ensures that dividend payments go out to all registered owners of record on the payable date. 3 multiple choice options Boards of Directors in the publicly-traded sphere are elected by corporate stockholders, using which of the following methods? any of the above are possible voting procedures 3 multiple choice options Call option contracts are considered to have intrinsic value: when CMV exceeds exercise price 3 multiple choice options Reinvestment risk is least present in: Zero coupon Treasury Bond 3 multiple choice options Accumulation units are most often associated with: annuities 3 multiple choice options One of the most frequently issued money market instruments is commercial paper. Typically, this investment has a maximum maturity: of 270 days 3 multiple choice options Certain securities are marginable under Regulation T of the Securities & Exchange Act of 1934 except: options 3 multiple choice options
A customer wishes to liquidate 100 shares of ABC common at the market. If the current inside market is 904.78 - 905.57, the client's transaction will occur disregarding commissions and other charges at
3 multiple choice options A market maker is obligated to maintain and honor firm quotes during trading hours 3 multiple choice options The spread between bid and offer typically gets narrower as the volume increases 3 multiple choice options The so-called 5% policy pertains to mark ups on retail OTC transactions excepting new issues 3 multiple choice options The principal difference between a selling syndicate and a selling group would be: commitment 3 multiple choice options Stabilizing is a term generally used in Wall Street to refer to the practice of: maintaining a market price at or near the POP of a new issue for the sole purpose of protecting the stock from decline during a new offering. 3 multiple choice options Regulation SHO severely restricts short selling during the cooling offer period of a follow-on offering. Which of the below is true? an investor may buy the new issue shares on the offering so long as any short sale has been covered at least one business day prior to the effective date. 3 multiple choice options The maximum coverage offered per separate customer under SIPC insurance was set by Congress at: $500,000 for securities and cash combined
Pre-emptive Rights and Stock Warrants have a number of similarities. Which of the below represent characteristics these products have in common? I. Each has a fixed price at which the holder may purchase shares of the issuer's common stock. II. The fixed exercise price for both products is initially set at a level below the current market value of the common stock. III. These products are tradable on securities exchanges IV. Both have relatively short-term expiration dates I and III 3 multiple choice options When reviewing the definitions of broker-dealers and investment advisers, one would find that: All of these 3 multiple choice options Keynesian economic theory deals with: Controlling the economy through budget/government spending and taxation policies 3 multiple choice options A significant number of public investors do not have a solid understanding of how common stock is offered to the public. Two methods are the secondary offering and the follow-on offering. Which of the below are true statements regarding these methods? A follow-on is an offering of new shares other than the initial public offering (IPO). 3 multiple choice options FINRA has promulgated various rules and procedures pertaining to the operation of broker-dealers and departments within member firms. The M&A Department: Creates the firm's procedures pertaining to Merger and Acquisition activity 3 multiple choice options Mitigation of the risk of loss in a bearish market can be achieved by customers with vulnerable long stock positions placing: Sell stop orders
3 multiple choice options All investors with short option positions: Have a contractual obligation to perform in accordance with the contract terms if the option is exercised. 3 multiple choice options All of the following are full disclosure documents used in the sale of securities with the exception of: Notice of Sale 3 multiple choice options Each member broker-dealer is required to have a principal executive monitoring the firm's adherence to SRO as well as State and Federal laws and regulations, known as the firm's CCO 3 multiple choice options In the industry, the term 'Blue Chip' most often is associated with: stocks that consistently produce income and modest growth over long periods of time 3 multiple choice options When a customer places a purchase order for an NYSE stock and the trade is reported at a price which is different than the actual transaction price, the client pays the price at which the trade was executed 3 multiple choice options Under what conditions, if any, may an agent of a broker-dealer share in the profits and losses of a customer's account? only if the sharing is in direct proportion to the financial contribution made by the agent to the account 3 multiple choice options Under the Internal Revenue Code as it pertains to traditional individual retirement accounts (IRA), required minimum distributions must begin upon reaching age 72 years of age. 3 multiple choice options
