EXAMFX SIE PRACTICE Exam
EXAMFX SIE PRACTICE TEST QUESTIONS AND
ANSWERS GRADED A 2024
What is the maximum amount of SIPC coverage available to each separate customer? -
Correct Answer ✔$500,000 including up to $250,000 in cash
If a customer purchases securities and does not settle the account 4 business days,
what should the brokerage firm do first? -Correct Answer ✔Ask for an extension of time
from the SRO or cancel the trade and sell off the purchased securities
When must a customer who purchases securities in a cash or margin account pay for
the securities? -Correct Answer ✔4 business days
What is the maximum insurance the SIPC provides customer accounts for unreturned
cash? -Correct Answer ✔$250,000
If a customer purchases securities and does not settle the account in 4 business days,
what is the brokerage firm's first order of business? -Correct Answer ✔To sell off the
purchased securities and freeze the account for 90 days
What act covers the trading of securities after they have been issued, the regulation of
exchanges, and the regulation of broker/dealers? -Correct Answer ✔The Securities
Exchange Act of 1934
What term describes the legislation that regulates the sale of securities at the state
level? -Correct Answer ✔Blue Sky laws
What entity is responsible for the safekeeping of an investment company's cash and
securities? -Correct Answer ✔The custodian
Between what two parties does the underwriting agreement exist? -Correct Answer
✔The issuer and the managing underwriter
What FINRA bylaw regulates to dealings between member firms? -Correct Answer
✔Uniform Practice Code
What FINRA bylaw defines the proper methods for handling violations of trade practice
rules? -Correct Answer ✔Code of Procedure
An underwriter is also known as what? -Correct Answer ✔Investment Banker
What act of legislation created The Securities and Exchange Commission? -Correct
Answer ✔The Securities Exchange Act of 1934
EXAMFX SIE PRACTICE Exam
,EXAMFX SIE PRACTICE Exam
What FINRA bylaw is concerned with the settlement of disputes? -Correct Answer
✔Code of Arbitration
What is the maximum insurance the SIPC provides customer accounts for unreturned
securities? -Correct Answer ✔$500,000
When a firm effects trades for its own account, it is known as the principal. In what
capacity is it considered to act? -Correct Answer ✔Dealer
What SRO enforces MSRB rules? -Correct Answer ✔FINRA
An investment adviser receives a fee for his services. What is this fee classified as? -
Correct Answer ✔An operating expense of the fund
Under Reg. T, what can a customer do if his account is frozen for 90 days? -Correct
Answer ✔Purchase securities on a cash basis
Whether the broker/dealer acted as an agent or a principal in a transaction must be
disclosed on what document? -Correct Answer ✔Trade confirmation
If an investor wanted to purchase an unlisted security, where would the order be
entered? -Correct Answer ✔In the over-the-counter market
What are the NYSE trading hours? -Correct Answer ✔9:30 AM - 4:00 PM Eastern Time
After a security is issued in the primary market, it trades in what market? -Correct
Answer ✔Secondary market
When is a "red herring" prospectus distributed? -Correct Answer ✔During the cooling-off
period
What is the term for the date when the SEC receives a registration statement from an
issuer? -Correct Answer ✔Filing date
What type of securities offering cannot be advertised to the public? -Correct Answer
✔Regulation D
A listed security trading OTC is trading in what market? -Correct Answer ✔Third market
A publicly traded company issues more shares in order to finance a new factory. What
type of offering is this? -Correct Answer ✔Additional Public Offering (APO)
EXAMFX SIE PRACTICE Exam
, EXAMFX SIE PRACTICE Exam
A formal offer to existing shareholders to purchase their stock above the current market
price is what kind of offer? -Correct Answer ✔Tender offer
Under Reg. A of the Securities Exchange Act of 1933, new issues valued at what
amount may be exempt from registration? -Correct Answer ✔5,000,000 or less
What rule sets down the requirements for the resale of restricted stock to the public? -
Correct Answer ✔Rule 144
The proceeds from a sale of a security went directly to the issuer of the security. In what
market did this transaction occur? -Correct Answer ✔Primary market
What is the term for securities that are not required to register with the SEC or meet the
prospectus requirements of the Securities Exchange Act of 1933? -Correct Answer
✔Exempt securities
A prospectus is the disclosure document for the public offering of new issues. What is
the disclosure document for private placements called? -Correct Answer ✔Offering
memorandum
Who represents orders from the public on the trading floor of the NYSE? -Correct
Answer ✔Floor broker
What is the only form of advertisement permitted by the Securities and Exchange Act of
1933 during the cooling-off of a new issue? -Correct Answer ✔Tombstone
A trade between two institutions executed without an intervening broker/dealer would
take place in what market? -Correct Answer ✔The Forth Market
What type of prospectus may be distributed during the cooling-off period of a primary
offering? -Correct Answer ✔Red Herring
In what type of offering the security sale proceeds go to a party other than the issuer,
such as a major shareholder or another corporation? -Correct Answer ✔Secondary
offering
When a security is listed, it means that it trades on what? -Correct Answer ✔An
exchange
Which Act was designed to prevent fraud in the issuing of securities? -Correct Answer
✔The Securities Act of 1933
How long is the time period granted to an unseasoned issuer to complete a shelf
offering? -Correct Answer ✔Two years
EXAMFX SIE PRACTICE Exam
EXAMFX SIE PRACTICE TEST QUESTIONS AND
ANSWERS GRADED A 2024
What is the maximum amount of SIPC coverage available to each separate customer? -
Correct Answer ✔$500,000 including up to $250,000 in cash
If a customer purchases securities and does not settle the account 4 business days,
what should the brokerage firm do first? -Correct Answer ✔Ask for an extension of time
from the SRO or cancel the trade and sell off the purchased securities
When must a customer who purchases securities in a cash or margin account pay for
the securities? -Correct Answer ✔4 business days
What is the maximum insurance the SIPC provides customer accounts for unreturned
cash? -Correct Answer ✔$250,000
If a customer purchases securities and does not settle the account in 4 business days,
what is the brokerage firm's first order of business? -Correct Answer ✔To sell off the
purchased securities and freeze the account for 90 days
What act covers the trading of securities after they have been issued, the regulation of
exchanges, and the regulation of broker/dealers? -Correct Answer ✔The Securities
Exchange Act of 1934
What term describes the legislation that regulates the sale of securities at the state
level? -Correct Answer ✔Blue Sky laws
What entity is responsible for the safekeeping of an investment company's cash and
securities? -Correct Answer ✔The custodian
Between what two parties does the underwriting agreement exist? -Correct Answer
✔The issuer and the managing underwriter
What FINRA bylaw regulates to dealings between member firms? -Correct Answer
✔Uniform Practice Code
What FINRA bylaw defines the proper methods for handling violations of trade practice
rules? -Correct Answer ✔Code of Procedure
An underwriter is also known as what? -Correct Answer ✔Investment Banker
What act of legislation created The Securities and Exchange Commission? -Correct
Answer ✔The Securities Exchange Act of 1934
EXAMFX SIE PRACTICE Exam
,EXAMFX SIE PRACTICE Exam
What FINRA bylaw is concerned with the settlement of disputes? -Correct Answer
✔Code of Arbitration
What is the maximum insurance the SIPC provides customer accounts for unreturned
securities? -Correct Answer ✔$500,000
When a firm effects trades for its own account, it is known as the principal. In what
capacity is it considered to act? -Correct Answer ✔Dealer
What SRO enforces MSRB rules? -Correct Answer ✔FINRA
An investment adviser receives a fee for his services. What is this fee classified as? -
Correct Answer ✔An operating expense of the fund
Under Reg. T, what can a customer do if his account is frozen for 90 days? -Correct
Answer ✔Purchase securities on a cash basis
Whether the broker/dealer acted as an agent or a principal in a transaction must be
disclosed on what document? -Correct Answer ✔Trade confirmation
If an investor wanted to purchase an unlisted security, where would the order be
entered? -Correct Answer ✔In the over-the-counter market
What are the NYSE trading hours? -Correct Answer ✔9:30 AM - 4:00 PM Eastern Time
After a security is issued in the primary market, it trades in what market? -Correct
Answer ✔Secondary market
When is a "red herring" prospectus distributed? -Correct Answer ✔During the cooling-off
period
What is the term for the date when the SEC receives a registration statement from an
issuer? -Correct Answer ✔Filing date
What type of securities offering cannot be advertised to the public? -Correct Answer
✔Regulation D
A listed security trading OTC is trading in what market? -Correct Answer ✔Third market
A publicly traded company issues more shares in order to finance a new factory. What
type of offering is this? -Correct Answer ✔Additional Public Offering (APO)
EXAMFX SIE PRACTICE Exam
, EXAMFX SIE PRACTICE Exam
A formal offer to existing shareholders to purchase their stock above the current market
price is what kind of offer? -Correct Answer ✔Tender offer
Under Reg. A of the Securities Exchange Act of 1933, new issues valued at what
amount may be exempt from registration? -Correct Answer ✔5,000,000 or less
What rule sets down the requirements for the resale of restricted stock to the public? -
Correct Answer ✔Rule 144
The proceeds from a sale of a security went directly to the issuer of the security. In what
market did this transaction occur? -Correct Answer ✔Primary market
What is the term for securities that are not required to register with the SEC or meet the
prospectus requirements of the Securities Exchange Act of 1933? -Correct Answer
✔Exempt securities
A prospectus is the disclosure document for the public offering of new issues. What is
the disclosure document for private placements called? -Correct Answer ✔Offering
memorandum
Who represents orders from the public on the trading floor of the NYSE? -Correct
Answer ✔Floor broker
What is the only form of advertisement permitted by the Securities and Exchange Act of
1933 during the cooling-off of a new issue? -Correct Answer ✔Tombstone
A trade between two institutions executed without an intervening broker/dealer would
take place in what market? -Correct Answer ✔The Forth Market
What type of prospectus may be distributed during the cooling-off period of a primary
offering? -Correct Answer ✔Red Herring
In what type of offering the security sale proceeds go to a party other than the issuer,
such as a major shareholder or another corporation? -Correct Answer ✔Secondary
offering
When a security is listed, it means that it trades on what? -Correct Answer ✔An
exchange
Which Act was designed to prevent fraud in the issuing of securities? -Correct Answer
✔The Securities Act of 1933
How long is the time period granted to an unseasoned issuer to complete a shelf
offering? -Correct Answer ✔Two years
EXAMFX SIE PRACTICE Exam
