Practice SIE Test-Securities Industry
Essentials-Questions with Quality
Solutions.
The computation of dollar prices and accrued interest on municipal bonds is normally on what
calendar basis?
A 30/360
B 30/365
C Actual/360
D Actual/365 - Answer A
A transaction in which a writer covers a position by purchasing an option is called:
A. a closing sale
B. a closing purchase
C. an opening sale
D. an opening purchase - Answer B
At the time of issuance, which of the following securities normally has the longest period to
expiration?
A. rights
B. options
C. warrants
D. repurchase agreements - Answer C
Under Federal Reserve T, a 90-day restriction is imposed when a customer opens and closes
which of the following positions?
A. The same stock on the same day in a margin account
B. The same stock in different accounts on the same day
C. The same stock in different accounts in the same household.
D. The same stock in cash account without paying for the stock - Answer D
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:
A. a qualified investor.
B. an accredited investor
,C. an institutional investor
D. a qualified institutional buyer (QIB) - Answer B
Direct participation programs (DDPs) provide:
A. liquidity and transparency
B. exposure to non-correlated assets with steady returns
C. market-related correlations with higher average returns
D. investors with direct purchases of stock from public companies - Answer B
In which of the following situations is an employee of a public company permitted to trade upon
information without violating insider trading laws?
A. An independent securities analyst explains to the employee why the earnings for the
company next quarter could be markedly poorer than expected.
B. The employee's neighbor works for the government and informs him that the government
will award a major contract to the company next month.
C. The employee's spouse works in the corporate headquarters and shares with him a
conversation overheard at work regarding possible acquisition targets.
D. A coworker informs the employee of a conversation he had with the administrative assistant
to the company's general counsel regarding key developments in an ongoing class action
lawsuit. - Answer A
Blue-sky laws are regulated by which of the following entities?
A. SEC
B. MSRB
C. FINRA
D. State securities regulators - Answer D
The last transaction in XYZ 5.50s was at 102. This bond is selling at:
A. par
B. a premium
C. a discount
D. asset value - Answer B
Which of the following outcomes are possible for the writer of a covered call option?
A. Profit limited and loss limited
B. Profit limited and loss unlimited
C. Profit unlimited and loss limited
, D. Profit unlimited and loss unlimited - Answer A
In a period of low inflation and economic recession, the Federal Reserve is expected to take
which of the following actions?
A. Decrease taxes
B. Raise the federal funds rate
C Buy bonds in the open market
D. Require banks to increase reserves - Answer C
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?
A. $50
B. $100
C. $150
D. $250 - Answer A
Which of the following actions violates FINRA rules regarding selling away?
A. Recommending to a customer the services of another broker-dealer (BD)
B. Sharing commissions with another registered representative in the same BD
C. Advising customers to buy mutual funds at amounts just below a discount level
D. Engaging in private securities transactions without written prior consent of the employing BD
- Answer D
Under normal circumstances, a customer's letter of intent on a mutual fund purchase is valid for
what maximum period of time?
A. 3 months
B. 6 months
C 13 months
D. 24 months - Answer C
Which of the following statements is true regarding a customer account held as tenants in
common?
A. The owners must equally share the assets
B. The ownership of the decedent's assets is governed by their will or state law.
Essentials-Questions with Quality
Solutions.
The computation of dollar prices and accrued interest on municipal bonds is normally on what
calendar basis?
A 30/360
B 30/365
C Actual/360
D Actual/365 - Answer A
A transaction in which a writer covers a position by purchasing an option is called:
A. a closing sale
B. a closing purchase
C. an opening sale
D. an opening purchase - Answer B
At the time of issuance, which of the following securities normally has the longest period to
expiration?
A. rights
B. options
C. warrants
D. repurchase agreements - Answer C
Under Federal Reserve T, a 90-day restriction is imposed when a customer opens and closes
which of the following positions?
A. The same stock on the same day in a margin account
B. The same stock in different accounts on the same day
C. The same stock in different accounts in the same household.
D. The same stock in cash account without paying for the stock - Answer D
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:
A. a qualified investor.
B. an accredited investor
,C. an institutional investor
D. a qualified institutional buyer (QIB) - Answer B
Direct participation programs (DDPs) provide:
A. liquidity and transparency
B. exposure to non-correlated assets with steady returns
C. market-related correlations with higher average returns
D. investors with direct purchases of stock from public companies - Answer B
In which of the following situations is an employee of a public company permitted to trade upon
information without violating insider trading laws?
A. An independent securities analyst explains to the employee why the earnings for the
company next quarter could be markedly poorer than expected.
B. The employee's neighbor works for the government and informs him that the government
will award a major contract to the company next month.
C. The employee's spouse works in the corporate headquarters and shares with him a
conversation overheard at work regarding possible acquisition targets.
D. A coworker informs the employee of a conversation he had with the administrative assistant
to the company's general counsel regarding key developments in an ongoing class action
lawsuit. - Answer A
Blue-sky laws are regulated by which of the following entities?
A. SEC
B. MSRB
C. FINRA
D. State securities regulators - Answer D
The last transaction in XYZ 5.50s was at 102. This bond is selling at:
A. par
B. a premium
C. a discount
D. asset value - Answer B
Which of the following outcomes are possible for the writer of a covered call option?
A. Profit limited and loss limited
B. Profit limited and loss unlimited
C. Profit unlimited and loss limited
, D. Profit unlimited and loss unlimited - Answer A
In a period of low inflation and economic recession, the Federal Reserve is expected to take
which of the following actions?
A. Decrease taxes
B. Raise the federal funds rate
C Buy bonds in the open market
D. Require banks to increase reserves - Answer C
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?
A. $50
B. $100
C. $150
D. $250 - Answer A
Which of the following actions violates FINRA rules regarding selling away?
A. Recommending to a customer the services of another broker-dealer (BD)
B. Sharing commissions with another registered representative in the same BD
C. Advising customers to buy mutual funds at amounts just below a discount level
D. Engaging in private securities transactions without written prior consent of the employing BD
- Answer D
Under normal circumstances, a customer's letter of intent on a mutual fund purchase is valid for
what maximum period of time?
A. 3 months
B. 6 months
C 13 months
D. 24 months - Answer C
Which of the following statements is true regarding a customer account held as tenants in
common?
A. The owners must equally share the assets
B. The ownership of the decedent's assets is governed by their will or state law.
