SIE Practice Exam 75 Questions

1. Which of the following is true regarding rumors related to an investment?

2. Under Rule 144A, an issuer of restricted stock is permitted to sell to which of the following investors?

3. UTMA accounts are opened under the tax ID of the:

4. What must a broker-dealer’s customer, who keeps her shares in street name with the firm, do to receive corporate communications like annual reports and proxy materials?

5. Under industry regulations, an initial purchase of $3,000 of common stock in a margin account requires a cash deposit of:

6. Under FINRA rules, which of the following activities by a registered representative requires written notification to her firm?

7. Diversification is a very effective way for an investor to mitigate:

8. No-load mutual funds may have lower expense ratios than load mutual funds for which of the following reasons?

9. A registered representative (RR) wants to participate in a private securities transaction. Which of the following actions must the RR take?

10. Treasury stock is:

11. An associated person who is not a registered representative is permitted to engage in which of the following activities?

12. Your client wishes to make a substantial investment in a mutual fund your firm is offering. In order to qualify for a reduced sales load, they sign a letter of intent which gives them:

13. A broker-dealer is permitted to accept payment for a new issue from a new customer when the:

14. The last transaction in XYZ 5.50s 2030 was at 102. This bond is selling at:

15. A registered representative (RR) who wants to place a mutual fund advertisement must obtain written approval from which of the following parties?

16. FinCEN accomplishes its mission to safeguard the financial system from the abuses of financial crime, including terrorist financing and money laundering, by enforcing:

17. The regular way settlement on Treasury bonds is:

18. John, a Virginia resident, buys shares in a Rule 147 offering on June 1. When is he allowed to sell these shares to someone living in Maryland?

19. Blue-sky laws are regulated by which of the following entities?

20. Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes which of the following positions?

21. Which of the following features do Roth 401(k) and Roth individual retirement account (IRA) plans share?

22. The primary purpose of a syndicate desk in the context of an equity offering is to:

23. 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:

24. A market maker is quoting a stock at 23.15 – 23.30. If the firm fails to honor its quote for at least one round lot on both sides of the market:

25. Front-running refers to the practice of:

26. Direct participation programs (DPPs) provide:

27. Which of the following statements is true regarding a customer account held as tenants in common?

28. 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?

29. A customer wants their firm to manage their assets and wants a simplified fee structure. What should the registered representative recommend?

30. The computation of dollar prices and accrued interest on municipal bonds is normally on what calendar basis?

31. What is the cost basis of an inherited mutual fund?

32. Todd has invested solely in a DPP and earns income only from his job. If the DPP incurs a loss, is Todd able to deduct this loss from his tax return? Why or why not?

33. Which of the following actions violates FINRA rules regarding selling away?

34. The owner of which of the following products is most exposed to inflationary risk?

35. In which form are most shares of common stock held today?

36. As interest rates rise, which of the following will change the least in price?

37. Which of the following outcomes are possible for the writer of a covered call option?

38. A decline in the gross domestic product (GDP) must last for at least how many quarters to be considered a recession?

39. Which of the following is NOT a type of equity security?

40. Which of the following techniques can help protect against systematic risk?

41. Which of the following products is adversely impacted if the issuer’s credit rating is downgraded?

42. Which of the following investment risks is the greatest risk in a variable life insurance policy?

43. 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?

44. Which of the following factors stipulates the call provision of a bond?

45. In the over-the-counter market, the term “spread” refers to the difference between the:

46. Which organization oversees all securities firms that transact with the public?

47. Which of the following investments are generally traded according to their average life rather than their stated maturity dates?

48. Call protection is most valuable to a bond owner when bond prices are generally:

49. Which market is occasionally referred to as the ECN market?

50. Each of the below business enterprises exhibits flow-through of tax and related consequences except:

51. NASDAQ market makers wishing to increase the ADTV (average daily trading volume) they handle in those stocks:

52. Under FINRA rules, noncash compensation connected with the sale of variable contracts includes all of the following items except:

53. Single stock, or single sector, risk is more generally in the category described as:

54. 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:

55. Absent exceptional circumstances, NASDAQ trades during business hours are reported within:

56. Which of the following orders are placed above the current market price?

57. Which of the following actions is required when a firm receives cash in excess of $10,000 from one customer in one business day?

58. A transaction in which a writer covers a position by purchasing an option is called:

59. 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 stock dividend payment?

60. When is interest on Treasury notes paid?

61. Stability in the value of a debt portfolio is greatest when:

62. Which of the following entities guarantees a savings account at a bank?

63. Which of the following responses describes an advantage of index funds?

64. Many folks living across the country choose to participate in their state’s 529 college savings plan. These investment programs are generally referred to by FINRA as:

65. Which of the following statements about treasury stock is true?

66. Mercy, aged 60, started investing in a Roth IRA three years ago and has contributed $20,000. Her account has accrued $5,000 in earnings. Facing an emergency, she plans to withdraw $10,000 from her contributions to cover the expenses. What is true about this withdrawal?

67. Under SEC Regulation S-P (Consumer Privacy), which of the following information must a firm include in its customer privacy and opt-out notices?

68. A customer buys 700 shares of ABC stock at $81 on February 11, 2023. The following year, the customer sold 700 shares of ABC stock at $97 on February 14, 2024. What is the tax consequence?

69. Which of the following stakeholders has first claim priority in a Chapter 11 proceeding?

70. A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling at what price per share at expiration?

71. In which of the following situations is an employee of a public company permitted to trade upon information without violating insider trading laws?

72. 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?

73. An accredited investor could be defined by any of the following characteristics except:

74. Sarah goes short 4 TSLA Feb 315 calls at $8 when TSLA’s market price is $311. What is Sarah’s breakeven price?

75. The lowest investment grade bond rating is which of the following choices?