SIE Mastery Exam Practice Questions With Accurate Answers.

SIE Mastery Exam Practice Questions With Accurate Answers. Which of the following investments typically carries significant liquidity risk? A) T-bills B) Limited partnership C) Listed equities D) Mutual funds - answerB) Limited partnership Limited partnerships are not freely transferable and have no established secondary market. With an LP, assume you will own it through the life of the program. All the others listed have active secondary markets and are very liquid. Diversifying a portfolio may help mitigate which of these types of risk? A) Market risk B) Systematic risk C) Legislative risk D) Interest rate risk - answerC) Legislative risk Diversification does little to mitigate systematic risks like market and interest rate risk. It can be helpful in lowering the risk from nonsystematic risks like business and legislative risk. For an owner to be paid a dividend, his name should be recorded on the stock record book of the issuer's transfer agent by A) the ex-date. B) the record date. C) the payable date. D) the next business day. - answerB) the record date. All of the following accounts would be fully covered by the Securities Investor Protection Corporation (SIPC) in the event of a broker-dealer's failure except A) $250,000 in cash and $100,000 in Jim's favorites technology fund. B) $200,000 in an index ETF in an account with 100 30-year T-bonds. C) $200,000 of Windmill Advisors Growth Fund and $300,000 in steel futures. D) $200,000 in Seabird Coffee Company stock and $300,000 in the Alfs Money Market Fund. - answerC) $200,000 of Windmill Advisors Growth Fund and $300,000 in steel futures. Futures are not a security and not covered by SIPC. None of the choices exceed $500,000 in value or hold more than $250,000 in cash. You quote ABC stock to a customer 72 bid for 1,000 shares, 700 offered at 72.10. Which of the following is true? A) The quote's inside spread is $0.10. B) 72 is currently the lowest price any seller is willing to accept. C) 72.10 is currently the highest price any buyer is willing to pay. D) 72 is the ask price. - answerA) The quote's inside spread is $0.10. 72 bid for, offered at 72.10 is the quote. The spread is the difference between the bid and offer, 0.10. The bid (72) is the highest price any buyer is willing to pay, and the offer (72.10) is the lowest price any seller is willing to accept. The offer = ask Rob takes a job with Seacoast Securities, a FINRA member broker-dealer firm, as a receptionist in a branch. Which of the following activities may violate the rules concerning activities of registered persons? A) Directing a customer to the restroom B) Directing a customer to a deli Rob really likes C) Directing a customer to a flyer for a specific mutual fund that Rob really likes D) Providing a prospectus in response to the customer request - answerC) Directing a customer to a flyer for a specific mutual fund that Rob really likes The Securities Exchange Act of 1934 covers all of the following except A) broker-dealers and associated persons. B) issuance of corporate securities. C) trading of corporate securities. D) manipulative, deceptive devices. - answerB) issuance of corporate securities. The Securities Exchange Act of 1934 (the People and Places Act) regulates the secondary market, including strict prohibitions from using manipulative, deceptive, or other fraudulent tactics. Your customer receives a 10% stock dividend on 1,000 shares owned. Regarding this dividend, you correctly explain that the position will do what? A) Remain unchanged, but the price per share will increase by 10% B) Increase by 10%, as will the price per share C) Increase by 10 shares, but the price per share will be adjusted downward D) Increase by 100 shares, but the price per share will be adjusted downward - answerD) Increase by 100 shares, but the price per share will be adjusted downward When a stock dividend is received, the investor's number of shares increases by the appropriate percentage, but the price per share is adjusted downward. In this case, a 10% dividend on 1,000 shares would increase the position by 100 shares to 1,100 total shares owned For tax purposes, which of the following is not associated with being reportable as ordinary income? A) Interest received from debt securities B) Wages earned C) Gains from securities transactions D) Rent or lease payments received - answerC) Gains from securities transactions