SIE Practice Exam
Which corporate voting procedures entitles a shareholder to one vote per share, and votes
must be divided evenly among the candidates being voted on? -(correct answer)Statutory
voting What market refers to the trading of exchange-listed securities in the over-the-counter
market? These trades allow institutional investors to trade blocks of securities directly, rather
than through an exchange, providing liquidity and anonymity to buyers. -(correct answer)Third
market An investor sells a naked call on Omikron for a $250 premium. What is true regarding
the investors position? -(correct answer)The investor's potential loss is unlimited Which act
created the SEC and empowered it with broad authority over all aspects of the securities
industry? -(correct answer)Securities Exchange Act of 1934 A free tool provided by FINRA that
is intended to help consumers research the professional backgrounds of brokers and
brokerage firms, as well as investment advisor firms and advisors? -(correct
answer)BrokerCheck The Federal Reserve Board performs what actions? -(correct answer)It
sets monetary policy, but does not set tax policy An offering of shares to existing stockholders
on a pro-rata basis is called a -(correct answer)Rights offering The difference between a
bond's price and the conversion parity price is referred to as -(correct answer)conversion
premium An individual who meets what criteria must register as an investment adviser?
-(correct answer)The individual provides advice or analyses concerning securities The
individual is in the business of providing investment advice The individual provides investment
advice for compensation A type of preferred stock that gives the investor the right to receive
dividends equal to the normally specified rate, as well as an additional dividend based on a
specific predetermined condition is called a -(correct answer)participating preferred stock
Profit sharing plans have what characteristic? -(correct answer)they can be invested entirely in
company stock What is true regarding the Central Registration Depository (CRD)? -(correct
answer)It was developed by NASAA and the NASD It consolidated a multiple paper-based
state licensing and regulatory process into a single, nationwide computer system Its
computerized database contains the licensing and disciplinary histories on more than 650,000
securities professionals and 5,200 securities firms Who is responsible for maintaining fair and
orderly markets for an assigned set of listed firms? They operate both manually and
electronically to facilitate price discovery during market opens, closes, and during periods of
trading imbalances and instability. -(correct answer)Designated Market Makers If real GDP
declined the last 3 quarters, how many more consecutive quarters of decline would be needed
to be classified as an economic depression? -(correct answer)3 quarters What is a correct
reason to purchase a particular investment for a client's portfolio? -(correct answer)Blue chip
common stocks because they provide a hedge against inflation An unconditional promise to
pay a sum of money to a payee, either at a fixed or determinable future time, under specific
terms is called a -(correct answer)Promissory note A trade surplus results from -(correct
answer)a country exporting more than it imports William, age 56, recently retired from Epsilon
Inc., and would like to take a distribution from a retirement plan to pay for medical expenses.
Which corporate voting procedures entitles a shareholder to one vote per share, and votes
must be divided evenly among the candidates being voted on? -(correct answer)Statutory
voting What market refers to the trading of exchange-listed securities in the over-the-counter
market? These trades allow institutional investors to trade blocks of securities directly, rather
than through an exchange, providing liquidity and anonymity to buyers. -(correct answer)Third
market An investor sells a naked call on Omikron for a $250 premium. What is true regarding
the investors position? -(correct answer)The investor's potential loss is unlimited Which act
created the SEC and empowered it with broad authority over all aspects of the securities
industry? -(correct answer)Securities Exchange Act of 1934 A free tool provided by FINRA that
is intended to help consumers research the professional backgrounds of brokers and
brokerage firms, as well as investment advisor firms and advisors? -(correct
answer)BrokerCheck The Federal Reserve Board performs what actions? -(correct answer)It
sets monetary policy, but does not set tax policy An offering of shares to existing stockholders
on a pro-rata basis is called a -(correct answer)Rights offering The difference between a
bond's price and the conversion parity price is referred to as -(correct answer)conversion
premium An individual who meets what criteria must register as an investment adviser?
-(correct answer)The individual provides advice or analyses concerning securities The
individual is in the business of providing investment advice The individual provides investment
advice for compensation A type of preferred stock that gives the investor the right to receive
dividends equal to the normally specified rate, as well as an additional dividend based on a
specific predetermined condition is called a -(correct answer)participating preferred stock
Profit sharing plans have what characteristic? -(correct answer)they can be invested entirely in
company stock What is true regarding the Central Registration Depository (CRD)? -(correct
answer)It was developed by NASAA and the NASD It consolidated a multiple paper-based
state licensing and regulatory process into a single, nationwide computer system Its
computerized database contains the licensing and disciplinary histories on more than 650,000
securities professionals and 5,200 securities firms Who is responsible for maintaining fair and
orderly markets for an assigned set of listed firms? They operate both manually and
electronically to facilitate price discovery during market opens, closes, and during periods of
trading imbalances and instability. -(correct answer)Designated Market Makers If real GDP
declined the last 3 quarters, how many more consecutive quarters of decline would be needed
to be classified as an economic depression? -(correct answer)3 quarters What is a correct
reason to purchase a particular investment for a client's portfolio? -(correct answer)Blue chip
common stocks because they provide a hedge against inflation An unconditional promise to
pay a sum of money to a payee, either at a fixed or determinable future time, under specific
terms is called a -(correct answer)Promissory note A trade surplus results from -(correct
answer)a country exporting more than it imports William, age 56, recently retired from Epsilon
Inc., and would like to take a distribution from a retirement plan to pay for medical expenses.
