SIE Practice Exam/Questions & Answers/ Latest
Update
/. Your client Sven, has a extensive portfolio of stocks and bonds. Last year, he had an
income of $36,000, of which $200 a month was from a part-time job and the rest from
his portfolio. How much can he contribute to a ROTH IRA for the previous year? -
Answer-$2,400, which is not deductible from his ordinary income
You may only contribute earned income to an IRA. ROTH IRA's are not deductible.
/.A major difference between an open-end management investment company and a
closed-end company is that the open-end investment company - Answer-Sells shares
through a continuous primary offering.
/.Another term for capital appreciation is - Answer-Growth
/.An investor is looking to increase her purchase of put options. From this, you would
surmise that the customers market outlook is
A) Bearish
B) neutral
C) risk oriented
D) bullish - Answer-A) Bearish
buyers of puts is anticipating that the price will go down and is said to be bearish.
/.The first stage of money laundering is - Answer-Placement
/.Member Bank A wants to borrow from the federal reserves banks window. What would
be the interest rate on this loan? - Answer-The discount rate
/.Under the uniform practice code, regular-way transactions for common stock settle on
- Answer-The second business day following the trade date.
cash settlement for a trade occurs in the same day as the trade, however regular- way
settles (T+2)
, /.Which of the following transactions may be made on margin?
A) the purchase of open-end funds
B) the purchase of options contracts
C) the purchase of listed stocks in a custodial account
D) the purchase of NYSE-listed closed-end fund shares - Answer-D) the purchase of
NYSE-listed closed-end fund shares
options contracts may be purchased in a margin account but may not be purchased on
margin they must be paid for in full. Open end funds are continuous primary offerings
and are also not available to be bought on margin.
/.All of the following are money market instruments except
A) warrants expiring within 3 months
B) treasury bond maturing within the year
C) negotiable CD's
D) bankers acceptances - Answer-A) warrants are equity securities. Money market
instruments are liquid debt securities maturing within a year.
/.In a prime brokerage account, the prime broker - Answer-Provides custody and
clearing services and may share execution services with other broker-dealers
/.Upon termination a member firm must file a U-5 within how many days? - Answer-30
days
/.The Windmill alternative energy fund offers its shares to the public at the funds net
asset value (NAV) based on the next calculation of that figure. Based on this, you can
say the fund is - Answer-A no-load fund
of a mutual fund has a public offering price equal to its NAV, it has no sales charge and
is therefor a no-load fund
/.The conduct rules - Answer-Set out a fair and ethical trade practices that member
firms and their reps must follow.
/.You are recommending the purchase of the XYZ growth fund to one of your clients,
and you explain that the fund operates pursuant to a 12b-1 plan. Under the terms
described in the prospectus, the fee is - Answer-Part of the expense ratio of the fund
Update
/. Your client Sven, has a extensive portfolio of stocks and bonds. Last year, he had an
income of $36,000, of which $200 a month was from a part-time job and the rest from
his portfolio. How much can he contribute to a ROTH IRA for the previous year? -
Answer-$2,400, which is not deductible from his ordinary income
You may only contribute earned income to an IRA. ROTH IRA's are not deductible.
/.A major difference between an open-end management investment company and a
closed-end company is that the open-end investment company - Answer-Sells shares
through a continuous primary offering.
/.Another term for capital appreciation is - Answer-Growth
/.An investor is looking to increase her purchase of put options. From this, you would
surmise that the customers market outlook is
A) Bearish
B) neutral
C) risk oriented
D) bullish - Answer-A) Bearish
buyers of puts is anticipating that the price will go down and is said to be bearish.
/.The first stage of money laundering is - Answer-Placement
/.Member Bank A wants to borrow from the federal reserves banks window. What would
be the interest rate on this loan? - Answer-The discount rate
/.Under the uniform practice code, regular-way transactions for common stock settle on
- Answer-The second business day following the trade date.
cash settlement for a trade occurs in the same day as the trade, however regular- way
settles (T+2)
, /.Which of the following transactions may be made on margin?
A) the purchase of open-end funds
B) the purchase of options contracts
C) the purchase of listed stocks in a custodial account
D) the purchase of NYSE-listed closed-end fund shares - Answer-D) the purchase of
NYSE-listed closed-end fund shares
options contracts may be purchased in a margin account but may not be purchased on
margin they must be paid for in full. Open end funds are continuous primary offerings
and are also not available to be bought on margin.
/.All of the following are money market instruments except
A) warrants expiring within 3 months
B) treasury bond maturing within the year
C) negotiable CD's
D) bankers acceptances - Answer-A) warrants are equity securities. Money market
instruments are liquid debt securities maturing within a year.
/.In a prime brokerage account, the prime broker - Answer-Provides custody and
clearing services and may share execution services with other broker-dealers
/.Upon termination a member firm must file a U-5 within how many days? - Answer-30
days
/.The Windmill alternative energy fund offers its shares to the public at the funds net
asset value (NAV) based on the next calculation of that figure. Based on this, you can
say the fund is - Answer-A no-load fund
of a mutual fund has a public offering price equal to its NAV, it has no sales charge and
is therefor a no-load fund
/.The conduct rules - Answer-Set out a fair and ethical trade practices that member
firms and their reps must follow.
/.You are recommending the purchase of the XYZ growth fund to one of your clients,
and you explain that the fund operates pursuant to a 12b-1 plan. Under the terms
described in the prospectus, the fee is - Answer-Part of the expense ratio of the fund
