SIE EXAMS WITH CORRECT -SOLUTIONS
GRADED A+ /PRACTICE TEST
1. How does the Fed influence the federal funds rate? - -ANS☑️☑️--Through
open market operations and setting a target rate
2. How is a mutual fund's NAV per share calculated? - -ANS☑️☑️--By dividing
total assets minus liabilities by the number of shares outstanding
3. How often is NAV calculated for a mutual fund? - -ANS☑️☑️--Once per
business day, typically at market close
4. How often is NAV calculated for mutual funds? - -ANS☑️☑️--At the end of
each trading day
5. What are coincident economic indicators? - -ANS☑️☑️--Statistics that reflect
the current state of the economy, like GDP and employment levels
6. What are corporate bonds? - -ANS☑️☑️--Bonds issued by corporations to raise
capital
7. What are junk bonds? - -ANS☑️☑️--High-yield, high-risk bonds with low
credit ratings
8. What are lagging economic indicators? - -ANS☑️☑️--Statistics that follow
economic trends, like unemployment rates and corporate profits
,9. What are leading economic indicators? - -ANS☑️☑️--Statistics that signal
future economic activity, such as stock prices and new orders
10. What are municipal bonds? - -ANS☑️☑️--Bonds issued by states, cities, or
local governments
11. What are open market operations? - -ANS☑️☑️--The Fed's buying or selling
of government securities to control the money supply
12. What are the Fed's three primary tools of monetary policy? - -ANS☑️☑️--Open
market operations, discount rate, and reserve requirements
13. What are the two primary tools of fiscal policy? - -ANS☑️☑️--Government
spending and taxes
14. What are Treasury bonds? - -ANS☑️☑️--U.S. government bonds with a
maturity of more than 10 years
15. What does "easy money" policy entail? - -ANS☑️☑️--Increasing the money
supply and lowering interest rates to encourage borrowing and spending
16. What does a "tight money" policy entail? - -ANS☑️☑️--Reducing the money
supply and raising interest rates to control inflation
17. What does a high expense ratio indicate about a mutual fund? - -ANS☑️☑️--It
has higher operating expenses
, 18. What does a trade deficit indicate? - -ANS☑️☑️--A country imports more than
it exports
19. What does a trade surplus indicate? - -ANS☑️☑️--A country exports more than
it imports
20. Are municipal bond funds suitable for retirement accounts? - -ANS☑️☑️--No,
because their tax-exempt status is irrelevant in tax-deferred accounts
21. Can mutual funds charge both a front-end and back-end load? - -ANS☑️☑️--
No, they typically charge one or the other, not both
22. Can REITs pass losses through to investors like a DPP? - -ANS☑️☑️--No, only
income is passed through
23. Do UITs trade on the secondary market? - -ANS☑️☑️--No, they are
redeemable securities
24. How are capital gain distributions from a mutual fund taxed? - -ANS☑️☑️--As
capital gains, depending on the holding period of the fund's assets
25. How are REITs typically taxed? - -ANS☑️☑️--They must distribute at least
90% of income to avoid corporate tax
26. How does an ETF differ from a mutual fund? - -ANS☑️☑️--ETFs trade on
exchanges throughout the day, while mutual funds are traded at NAV once
daily
GRADED A+ /PRACTICE TEST
1. How does the Fed influence the federal funds rate? - -ANS☑️☑️--Through
open market operations and setting a target rate
2. How is a mutual fund's NAV per share calculated? - -ANS☑️☑️--By dividing
total assets minus liabilities by the number of shares outstanding
3. How often is NAV calculated for a mutual fund? - -ANS☑️☑️--Once per
business day, typically at market close
4. How often is NAV calculated for mutual funds? - -ANS☑️☑️--At the end of
each trading day
5. What are coincident economic indicators? - -ANS☑️☑️--Statistics that reflect
the current state of the economy, like GDP and employment levels
6. What are corporate bonds? - -ANS☑️☑️--Bonds issued by corporations to raise
capital
7. What are junk bonds? - -ANS☑️☑️--High-yield, high-risk bonds with low
credit ratings
8. What are lagging economic indicators? - -ANS☑️☑️--Statistics that follow
economic trends, like unemployment rates and corporate profits
,9. What are leading economic indicators? - -ANS☑️☑️--Statistics that signal
future economic activity, such as stock prices and new orders
10. What are municipal bonds? - -ANS☑️☑️--Bonds issued by states, cities, or
local governments
11. What are open market operations? - -ANS☑️☑️--The Fed's buying or selling
of government securities to control the money supply
12. What are the Fed's three primary tools of monetary policy? - -ANS☑️☑️--Open
market operations, discount rate, and reserve requirements
13. What are the two primary tools of fiscal policy? - -ANS☑️☑️--Government
spending and taxes
14. What are Treasury bonds? - -ANS☑️☑️--U.S. government bonds with a
maturity of more than 10 years
15. What does "easy money" policy entail? - -ANS☑️☑️--Increasing the money
supply and lowering interest rates to encourage borrowing and spending
16. What does a "tight money" policy entail? - -ANS☑️☑️--Reducing the money
supply and raising interest rates to control inflation
17. What does a high expense ratio indicate about a mutual fund? - -ANS☑️☑️--It
has higher operating expenses
, 18. What does a trade deficit indicate? - -ANS☑️☑️--A country imports more than
it exports
19. What does a trade surplus indicate? - -ANS☑️☑️--A country exports more than
it imports
20. Are municipal bond funds suitable for retirement accounts? - -ANS☑️☑️--No,
because their tax-exempt status is irrelevant in tax-deferred accounts
21. Can mutual funds charge both a front-end and back-end load? - -ANS☑️☑️--
No, they typically charge one or the other, not both
22. Can REITs pass losses through to investors like a DPP? - -ANS☑️☑️--No, only
income is passed through
23. Do UITs trade on the secondary market? - -ANS☑️☑️--No, they are
redeemable securities
24. How are capital gain distributions from a mutual fund taxed? - -ANS☑️☑️--As
capital gains, depending on the holding period of the fund's assets
25. How are REITs typically taxed? - -ANS☑️☑️--They must distribute at least
90% of income to avoid corporate tax
26. How does an ETF differ from a mutual fund? - -ANS☑️☑️--ETFs trade on
exchanges throughout the day, while mutual funds are traded at NAV once
daily
