SIE Practice Exam
Which of the following statements is true regarding the concept of an annuity
contract?
a) Payouts of an investment in a nonqualified annuity are all income tax-free
b) The kind of annuity selected partly determines the payment amounts to the
annuitant
c) In the case of life annuity contracts, the age and sex of the annuitant do not
affect the payment amounts
d) The amounts of the periodic payments to the annuitant are determined by the
performance of the insurance company's investment returns
(ANS - b) The kind of annuity selected partly determines the payment amounts to
the annuitant
Which of the following Form U4 reportable events results in a statutory
disqualification?
a) A personal bankruptcy filing
b) A written customer complaint alleging misappropriation of assets
c) A felony theft charge
d) A felony conviction for a driving under the influence (DUI) charge
(ANS - d) A felony conviction for a driving under the influence (DUI) charge
Under SEC Regulation S-P (Consumer Privacy), which of the following
information must a firm include in its customer privacy and opt-out notices?
a) The addresses of the firm's website
b) The fee and opt out from the privacy program
c) The deadline by which to out from the privacy program
d) The policies to protect the security of nonpublic information
(ANS - d) The policies to protect the security of nonpublic information
,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
(ANS - c) 13 months
No-load mutual funds may have lower expense than load mutual funds for which
of the following reasons?
a) No-load funds do not charge 12b-1 fees
b) No-load funds are not permitted to charge a 12b-1 fee greater than 25 basis
points
c) Sales charges for load mutual funds increase their annual expense ratios
d) Fund management fees for no-load funds are always lower than load funds
(ANS - b) No-load funds are not permitted to charge a 12b-1 fee greater than 25
basis points
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:
a) pending transactions
b) declared stock dividend
c) top management changes
d) imminent financial liquidity problems
(ANS - b) declared stock dividends
To offer its shareholders a privilege to obtain its shares at a fixed price, which of
the following products does a corporation issue?
a) Puts
, b) Rights
c) Futures
d) Preferred stock
(ANS - b) Rights
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?
a) DTC
b) Issuer
c) Custodian
d) Transfer agent
(ANS - d) Transfer agent
Under FINRA rules, which of the following activities by a registered
representative requires written notification to her firm?
a) Volunteering as a youth soccer league coach
b) Gambling resulting in winnings in excess of $10,000
c) Driving part time for a transportation network company on weekends
d) Selling nonproprietary investment company securities products through her firm
(ANS - c) Driving part time for a transportation network company on weekends
Which of the following responses describes an advantage of index funds?
a) The protection of principal during bearish markets
b) High turnover to take advantage of market opportunities
c) Higher management fees due to active management of fund
d) Lower management fees due to passive management of the fund
(ANS - d) Lower management fees due to passive management of the fund
Upon expiration, all in-the-money S&P 100 index call options are settled by the
delivery of which of the following?
a) Cash
Which of the following statements is true regarding the concept of an annuity
contract?
a) Payouts of an investment in a nonqualified annuity are all income tax-free
b) The kind of annuity selected partly determines the payment amounts to the
annuitant
c) In the case of life annuity contracts, the age and sex of the annuitant do not
affect the payment amounts
d) The amounts of the periodic payments to the annuitant are determined by the
performance of the insurance company's investment returns
(ANS - b) The kind of annuity selected partly determines the payment amounts to
the annuitant
Which of the following Form U4 reportable events results in a statutory
disqualification?
a) A personal bankruptcy filing
b) A written customer complaint alleging misappropriation of assets
c) A felony theft charge
d) A felony conviction for a driving under the influence (DUI) charge
(ANS - d) A felony conviction for a driving under the influence (DUI) charge
Under SEC Regulation S-P (Consumer Privacy), which of the following
information must a firm include in its customer privacy and opt-out notices?
a) The addresses of the firm's website
b) The fee and opt out from the privacy program
c) The deadline by which to out from the privacy program
d) The policies to protect the security of nonpublic information
(ANS - d) The policies to protect the security of nonpublic information
,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
(ANS - c) 13 months
No-load mutual funds may have lower expense than load mutual funds for which
of the following reasons?
a) No-load funds do not charge 12b-1 fees
b) No-load funds are not permitted to charge a 12b-1 fee greater than 25 basis
points
c) Sales charges for load mutual funds increase their annual expense ratios
d) Fund management fees for no-load funds are always lower than load funds
(ANS - b) No-load funds are not permitted to charge a 12b-1 fee greater than 25
basis points
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:
a) pending transactions
b) declared stock dividend
c) top management changes
d) imminent financial liquidity problems
(ANS - b) declared stock dividends
To offer its shareholders a privilege to obtain its shares at a fixed price, which of
the following products does a corporation issue?
a) Puts
, b) Rights
c) Futures
d) Preferred stock
(ANS - b) Rights
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?
a) DTC
b) Issuer
c) Custodian
d) Transfer agent
(ANS - d) Transfer agent
Under FINRA rules, which of the following activities by a registered
representative requires written notification to her firm?
a) Volunteering as a youth soccer league coach
b) Gambling resulting in winnings in excess of $10,000
c) Driving part time for a transportation network company on weekends
d) Selling nonproprietary investment company securities products through her firm
(ANS - c) Driving part time for a transportation network company on weekends
Which of the following responses describes an advantage of index funds?
a) The protection of principal during bearish markets
b) High turnover to take advantage of market opportunities
c) Higher management fees due to active management of fund
d) Lower management fees due to passive management of the fund
(ANS - d) Lower management fees due to passive management of the fund
Upon expiration, all in-the-money S&P 100 index call options are settled by the
delivery of which of the following?
a) Cash
