SIE Practice Exam question with answers
Which corporate voting procedures entitles a shareholder to one vote per share,
and votes must be divided evenly among the candidates being voted on? - -
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. - -Third market
-An investor sells a naked call on Omikron for a $250 premium. What is true
regarding the investors position? - -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? - -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? - -BrokerCheck
-The Federal Reserve Board performs what actions? - -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 - -
Rights offering
-The difference between a bond's price and the conversion parity price is referred
to as - -conversion premium
-An individual who meets what criteria must register as an investment adviser? - -
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 - -participating preferred stock
-Profit sharing plans have what characteristic? - -they can be invested entirely in
company stock
-What is true regarding the Central Registration Depository (CRD)? - -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. - -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? - -3 quarters
-What is a correct reason to purchase a particular investment for a client's
portfolio? - -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 - -Promissory note
-A trade surplus results from - -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. What plan would
allow William to take a penalty free withdrawal? - -401(k) from Epsilon Inc
-Match the state of the business cycle with the description that follows for
questions 19-22
A. Trough
B. Expansion
C. Contraction
D. Peak
_______ Recession - -contraction
-_________ Utilization at its lowest level - -Trough
-_______ Recovery - -Expansion
-________ GDP at its highest point - -Peak
-All are characteristics of a REIT EXCEPT - -it is a publicly traded open-end
investment company
(it is closed-end)
-What can an investor sign which allows him or her to receive breakpoint discounts
based upon a commitment to buy a specified number of mutual fund shares over a
period of time, usually 13 months - -Letter of intent
-What is a type of exchange rate system in which a country ties its currency to a
basket of other currencies or to another measure of value, such as gold? - -Fixed
exchange rate system
Which corporate voting procedures entitles a shareholder to one vote per share,
and votes must be divided evenly among the candidates being voted on? - -
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. - -Third market
-An investor sells a naked call on Omikron for a $250 premium. What is true
regarding the investors position? - -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? - -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? - -BrokerCheck
-The Federal Reserve Board performs what actions? - -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 - -
Rights offering
-The difference between a bond's price and the conversion parity price is referred
to as - -conversion premium
-An individual who meets what criteria must register as an investment adviser? - -
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 - -participating preferred stock
-Profit sharing plans have what characteristic? - -they can be invested entirely in
company stock
-What is true regarding the Central Registration Depository (CRD)? - -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. - -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? - -3 quarters
-What is a correct reason to purchase a particular investment for a client's
portfolio? - -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 - -Promissory note
-A trade surplus results from - -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. What plan would
allow William to take a penalty free withdrawal? - -401(k) from Epsilon Inc
-Match the state of the business cycle with the description that follows for
questions 19-22
A. Trough
B. Expansion
C. Contraction
D. Peak
_______ Recession - -contraction
-_________ Utilization at its lowest level - -Trough
-_______ Recovery - -Expansion
-________ GDP at its highest point - -Peak
-All are characteristics of a REIT EXCEPT - -it is a publicly traded open-end
investment company
(it is closed-end)
-What can an investor sign which allows him or her to receive breakpoint discounts
based upon a commitment to buy a specified number of mutual fund shares over a
period of time, usually 13 months - -Letter of intent
-What is a type of exchange rate system in which a country ties its currency to a
basket of other currencies or to another measure of value, such as gold? - -Fixed
exchange rate system
