SIE Practice Exam 1: Questions & Answers: (Guaranteed 84% score):Updated Solution

When an investor regularly trades in and out of five or six different stocks daily and does not maintain any positions over night would be a: [A] Programmed Trader [B] Specialist [C] Manager [D] Pattern Day Trader* > - EXPLANATION Pattern Day Traders do not maintain positions overnight and are in and out of stock positions daily. Which of the following is NOT a characteristic of Notes issued by the U.S. Treasury? [A] All U.S. Treasury Notes have call features.* [B] Maturities on these securities are typically intermediate. [C] Quotes on these securities are listed as a percentage of the note's par value. [D] Interest is paid on these securities semi-annually. > - EXPLANATION U.S. Treasury Notes have intermediate term maturities in the 2-10 year range. These securities are quoted as a percentage of par and payinterest semi-annually like U.S. Treasury Bonds. T-Notes are NOT issued as callable. A client has held a long position in BCD Common for several years and has seen a sizeable increase in price since initially buying the stock. The client fears that BCD is headed for a slight downturn in price and wishes to protect the profits that he holds from the previous increase. Which option strategy provides the MAXIMUM protection for this client? [A] This client would be best suited by buying calls on BCD. [B] This client would be best suited by selling calls on BCD. [C] This client would be best suited by buying puts on BCD.* [D] This client would be best suited by selling puts on BCD. > - EXPLANATION When looking for the "maximum" or "best" protection for an existing position, one would always end up being a buyer when using options strategies. In this case, the investor fears a downturn, so this investor would want downside protection. This makes buying puts on BCD the best option strategy for protection of the profits already seen from the appreciation. A broker-dealer has fired a registered representative (RR) for cause related to a violation of securities regulations. This RR will continue to be subject to FINRA jurisdiction for what period of time following the filing of the Form U-5? [A] 1 year[B] 2 years* [C] 3 years [D] 4 years > - EXPLANATION A terminated RR (