FINRA Practice SIE Exam practice exam questions and answers 2024, Exams of Economics

Download FINRA Practice SIE Exam practice exam questions and answers 2024 and more Exams Economics in PDF only on Docsity! FINRA Practice SIE Exam practice exam questions and answers 2024 FINRA Practice SIE Exam practice exam questions and answers 2024 The redemption value of an open-end investment company's shares is based on the: previous offering price previous closing NAV NAV computed after the order is received offering price computed after the order is received - CORRECT ANSWER NAV computed after the order is received The computation of dollar prices and accrued interest on municipal bonds is normal on what calendar basis? 30/360 30/365 Actual/360 Actual/365 - CORRECT ANSWER 30/360 Blue-sky laws are regulated by which of the following entities? SEC MSRB FINRA state securities regulators - CORRECT ANSWER State securities regulators At the time of issuance, which of the following securities normally has the longest period to expiration? Rights Options Warrants interest rate - CORRECT ANSWER exchange A married couple who earned income that exceeded $300k in each of the prior two years and reasonably expects the same for this current year is: a qualified investor an accredited investor an institutional investor a qualified institutional buyer - CORRECT ANSWER an accredited investor The owner of which of the following products is MOST exposed to inflationary risks? utility stocks treasury bills treasury bonds blue chip industrials - CORRECT ANSWER treasury bonds What is the concept of an annuity contract? - CORRECT ANSWER the kind of annuity selected partly determines the payment amounts to the annuitant Which of the following statement is true about all US Gov agency issues? they are exempt from federal taxes they are exempt from registration under the Securities Act of 1933 they are issued in bearer form only they are general obligations of the fed gov - CORRECT ANSWER they are exempt from registration under the Securities Act of 1933 Direct participation programs (DPP's) provide: liquidity and transparency exposure to non-correlated assets with steady returns market-related correlations with higher average returns investors with direct purchases of stock from public companies - CORRECT ANSWER exposure to non- correlated assets with steady returns Which of the following outcomes are possible for the writer of a covered call option? profit limited and loss limited profit limited and loss unlimited profit unlimited and loss limited profit unlimited and loss unlimited - CORRECT ANSWER profit limited and loss limited when is interest on treasury notes paid? quarterly semiannually annually at maturity - CORRECT ANSWER semiannually an associated person who is not a registered representative is permitted to engage in which of the following activities? accept an unsolicited customer order provide account opening forms to a new customer discuss the attributes of a particular investment product prequalify prospective customers as to investment objectives - CORRECT ANSWER provide account opening forms to a new customer a transaction in which a writer covers a position by purchasing an option is called: closing sale closing purchase opening sale opening purchase - CORRECT ANSWER closing purchase which of the following actions is required of a broker-dealer's anti-money laundering program? designating an AML compliance officer filing of the firm's AML program with FINRA conducting background checks of all employees identifying to regulators the employees responsible for Currency Transaction Reports - CORRECT ANSWER designating an AML compliance officer Under the Securities Act of 1933, registration is required for which of the following securities? Eurodollar bonds municipal securities American depository receipts (ADR's) securities issued by the federal government - CORRECT ANSWER ADR's Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes which of the following positions? same stock on the same day in a margin account same stock in different accounts on the same day the same stock in different account in the same household the same stock in a cash account without paying for the stock in full - CORRECT ANSWER the same stock in a cash account without paying for the stock in full the last transaction in XYZ 5.50s 2030 was at 102. this bond is selling at par a savings account at a bank is guaranteed by which of the following entities? FDIC SIPC Federal Reserve Department of the Treasury - CORRECT ANSWER FDIC No-load mutual funds may have lower expense ratios than load mutual funds for which of the following reasons? no-load funds do not charge 12-b1 fees no-load funds are not permitted to charge a 12b-1 fee greater than 25 basis points sales charges for load mutual funds increase their annual expense ratios fund management fees for no-load funds are always lower than load funds - CORRECT ANSWER no- load funds are not permitted to charge a 12b-1 fee greater than 25 basis points a decline in the GDP must last for at least how many quarters to be considered a recession? 1 2 3 4 - CORRECT ANSWER 2 quarters when a broker-dealer charges a commission on a securities transaction, it has acted as: an agent a principal underwriter a market maker - CORRECT ANSWER agent at issue, which of the following debt securities mature in one year or less? FNMA bonds GNMA bonds treasury notes money market instruments - CORRECT ANSWER money market instruments FinCEN accomplishes its mission to safeguard the financial system from the abuses of financial crime, including terrorist financing and money laundering, by enforcing: SEC regulations the Bank Secrecy Act the Securities Act of 1933 the Investment Company Act of 1940 - CORRECT ANSWER the Bank Secrecy Act Stability in the value of a debt portfolio is greatest when: interest rates are rising interest rates are falling maturities of the debt securities are long maturities of the debt securities are short - CORRECT ANSWER maturities of the debt securities are short which of the following investment risks is the greatest risk in a variable life insurance policy? credit risk market risk inflation risk interest rate risk - CORRECT ANSWER market risk under Rule 144A, an issuer of restricted stock is permitted to sell to which of the following investors? financial institutions accredited investors qualified institutional buyers non accredited investors who have previously purchased restricted stock - CORRECT ANSWER qualified institutional buyers (QIBs) A registered representative who wants to place a mutual fund advertisement must obtain written approval from which of the following parties? FINRA each state's securities administrator a register principal of the RR's firm the investment management division of the appropriate regional SEC office - CORRECT ANSWER a registered principal of the RR's firm which of the following stakeholders has first claim priority in a chapter 11 proceeding? equity holders secured debt holders unsecured debt holders administrative claim holders - CORRECT ANSWER secured debt holders a registered representative wants to participate in a private securities transaction. which of the following actions must the RR take? request a meeting with his supervisor to lay out the structure of the deal call his supervisor and inform her of the deal and the RR's potential involvement send written notice to his supervisor outlining the activity and compensation structure 200 shares at $25 per share 200 shares at $100 per share - CORRECT ANSWER 50 shares at $100 per share a member of a stock exchange responsible for providing liquidity in a security by being willing to buy and sell at all times is known as a: broker underwriter market maker transfer agent - CORRECT ANSWER market maker under industry regulations, an initial purchase of $3k of common stock in a margin account requires a cash deposit of: $750 $1,500 $2,000 $3,000 - CORRECT ANSWER $2,000 which of the following communications with the public is considered misleading? historical illustrations based on factual performance product comparisons that illustrate material differences a research report that includes a buy recommendation for a specific security literature providing a 10-year performance information to support predictions of future performance - CORRECT ANSWER literature providing 10-year performance information to support predictions of future performance the primary purpose of a syndicate desk in the context of an equity offering is to: determine the list of selling shareholders build an order book and allocate the stock solicit interest from investors in the stock offering chaperone company management during the road show - CORRECT ANSWER build an order book and allocate the stock which of the following represents the effect of a stock split? the price per share of common stock increases the price per share of common stock decreases each stockholder's proportionate ownership decreases each stockholder's proportionate ownership increases - CORRECT ANSWER the price per share of common stock decreases 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? monthly quarterly semiannually annually - CORRECT ANSWER quarterly 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 inside information if the customer shares them with his registered representative EXCEPT: pending transactions declared stock dividend top management changes imminent financial liquidity problems - CORRECT ANSWER declared stock dividend 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 the counter currency's inflation rate the trade balance between the two countries the credit rating of the counter currency's government - CORRECT ANSWER the spot exchange rate to offer its shareholders a privilege to obtain its shares at a fixed price, which of the following products does a corporation issue? puts rights futures preferred stock - CORRECT ANSWER rights Company ABC announces a 20% stock dividend for its common shareholders. if a customer holds 1,000 shares at $50, what is the new price and number of shares following the payment of the stock dividend? 800 shares at $62.50 1,000 shares at $41.67 1,200 shares at $41.67 1,200 shares at $50 - CORRECT ANSWER 1,200 shares at $41.67 which of the following actions violates FINRA rules regarding selling away? recommending to a customer the services of another broker-dealer sharing commissions with another registered representative in the same BD advising customers to buy mutual funds at amounts just below a discount level