SIE exam questions with correct
|\ |\ |\ |\ |\
answers
What type of risk is unique to a specific industry, business
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
enterprise, or investment type? - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\
✔✔Nonsystematic risk |\
Under which of the following circumstances is an investor in a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
position to acquire stock? - CORRECT ANSWERS ✔✔Buy a call,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
sell a call (The holder of a call has the right to buy stock at the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
strike price if exercised. The seller of a put is obligated to buy
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock at the strike price if exercised)
|\ |\ |\ |\ |\ |\
Options- a premium - CORRECT ANSWERS ✔✔the cost of an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
option contract, expressed in dollars per share of the underlying
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock
Options- strike price - CORRECT ANSWERS ✔✔The price at which
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the stock will be bought or sold if the contract is exercised,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
expressed in dollars per share |\ |\ |\ |\
A customer believes that ABC's price will go up but does not
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
have the money to buy 100 shares right now. How could the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
customer use options to profit from an increase in the stock's
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
price? - CORRECT ANSWERS ✔✔buy calls, write puts (both are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
bullish)
,A corporation's offer to current stockholders of the ability to
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
purchase a proportionate number of new shares at a specific
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
price for a limited time is called a - CORRECT ANSWERS ✔✔right
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
(they usually expire in 30-45 days)
|\ |\ |\ |\ |\
American depositary receipts (ADRs) - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\
✔✔issued by banks, represent a specific number of shares of a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
foreign company, and trade and pay dividends in dollars
|\ |\ |\ |\ |\ |\ |\ |\
Which of the following records must be maintained for 6 years? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Customer ledgers (statements) |\ |\ |\ |\
While underwriters can assist with preparation and filing, the
|\ |\ |\ |\ |\ |\ |\ |\ |\
accuracy and adequacy of these documents is the responsibility
|\ |\ |\ |\ |\ |\ |\ |\ |\
of the - CORRECT ANSWERS ✔✔Issuing corporation
|\ |\ |\ |\ |\ |\
What institutions serve as depository and clearing facilities? -
|\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Depository Trust Company and National |\ |\ |\ |\ |\ |\ |\
Securities Clearing Corporation (most specifically) then carrying
|\ |\ |\ |\ |\ |\ |\
and clearing firms can act as these as well.
|\ |\ |\ |\ |\ |\ |\ |\
What is a transfer agent? - CORRECT ANSWERS ✔✔(often a bank)
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
for a corporation is responsible for ensuring that its securities
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
are issued in the correct owner's name, canceling old and issuing
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
new certificates, maintaining records of ownership, and handling
|\ |\ |\ |\ |\ |\ |\ |\ |\
problems relating to lost, stolen, or destroyed certificates
|\ |\ |\ |\ |\ |\ |\
What is the function of the clearing corporation? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Acting as an intermediary in a trade, examples of |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
,these can be a commercial bank, can be a broker-dealer but
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
doesn't have to be |\ |\ |\
Who is considered a control person (security) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔those owned by directors, officers, or persons|\ |\ |\ |\ |\ |\ |\ |\
(which include corporations, trusts, etc.) who own or control 10%
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
or more of the issuer's equity securities (an unaffiliated person
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
would have to own 10% or more of the outstanding shares)
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
What are the two components of Return on Investment? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Capital gains and income |\ |\ |\ |\ |\
To expand the overall economy, we want to - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔buy securities via open-market operations, pushing interest
|\ |\ |\ |\ |\ |\ |\ |\
rates down |\
To meet a Regulation T margin call, a customer would have how
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
long? - CORRECT ANSWERS ✔✔settlement plus 2 additional
|\ |\ |\ |\ |\ |\ |\ |\
business days (or S + 2) |\ |\ |\ |\ |\
What is A fully disclosed broker-dealer - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔one that introduces its business to a carrying firm to clear
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
transactions
The regulation enacted by the SEC to protect the privacy of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
customer information is known as - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\
✔✔Regulation S-P |\
, A market maker that does not honor its firm quote is said to be -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔"backing away" |\ |\ |\
A deficit in the U.S. balance of payments can occur if - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔interest rates in foreign countries are higher than
|\ |\ |\ |\ |\ |\ |\ |\ |\
U.S. domestic rates and U.S. consumers are purchasing
|\ |\ |\ |\ |\ |\ |\ |\
(importing) foreign goods |\ |\
The general partner of a limited partnership has responsibility of
|\ |\ |\ |\ |\ |\ |\ |\ |\
- CORRECT ANSWERS ✔✔Organizing and managing the
|\ |\ |\ |\ |\ |\ |\ |\
partnership, assumes unlimited liability, and is responsible for |\ |\ |\ |\ |\ |\ |\ |\
paying all partnership debts
|\ |\ |\
To grow or expand the economy, U.S. fiscal policy should be to -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔cut taxes (so consumers have more
|\ |\ |\ |\ |\ |\ |\ |\
money to spend) and increase government spending for
|\ |\ |\ |\ |\ |\ |\ |\
programs and development (to create more jobs)|\ |\ |\ |\ |\ |\
What is the federal funds rate - CORRECT ANSWERS ✔✔the rate
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
commercial money center banks charge each other for an |\ |\ |\ |\ |\ |\ |\ |\ |\
overnight, unsecured loan |\ |\
The Federal Open Market Committee (FOMC) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔buy or sell Treasury securities in the open market.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Purchases add money to the economy, making the money
|\ |\ |\ |\ |\ |\ |\ |\ |\
available to lend more plentiful, and sales take money out of the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
economy, making money available to lend less plentiful.
|\ |\ |\ |\ |\ |\ |\
|\ |\ |\ |\ |\
answers
What type of risk is unique to a specific industry, business
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
enterprise, or investment type? - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\
✔✔Nonsystematic risk |\
Under which of the following circumstances is an investor in a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
position to acquire stock? - CORRECT ANSWERS ✔✔Buy a call,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
sell a call (The holder of a call has the right to buy stock at the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
strike price if exercised. The seller of a put is obligated to buy
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock at the strike price if exercised)
|\ |\ |\ |\ |\ |\
Options- a premium - CORRECT ANSWERS ✔✔the cost of an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
option contract, expressed in dollars per share of the underlying
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock
Options- strike price - CORRECT ANSWERS ✔✔The price at which
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the stock will be bought or sold if the contract is exercised,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
expressed in dollars per share |\ |\ |\ |\
A customer believes that ABC's price will go up but does not
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
have the money to buy 100 shares right now. How could the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
customer use options to profit from an increase in the stock's
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
price? - CORRECT ANSWERS ✔✔buy calls, write puts (both are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
bullish)
,A corporation's offer to current stockholders of the ability to
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
purchase a proportionate number of new shares at a specific
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
price for a limited time is called a - CORRECT ANSWERS ✔✔right
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
(they usually expire in 30-45 days)
|\ |\ |\ |\ |\
American depositary receipts (ADRs) - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\
✔✔issued by banks, represent a specific number of shares of a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
foreign company, and trade and pay dividends in dollars
|\ |\ |\ |\ |\ |\ |\ |\
Which of the following records must be maintained for 6 years? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Customer ledgers (statements) |\ |\ |\ |\
While underwriters can assist with preparation and filing, the
|\ |\ |\ |\ |\ |\ |\ |\ |\
accuracy and adequacy of these documents is the responsibility
|\ |\ |\ |\ |\ |\ |\ |\ |\
of the - CORRECT ANSWERS ✔✔Issuing corporation
|\ |\ |\ |\ |\ |\
What institutions serve as depository and clearing facilities? -
|\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Depository Trust Company and National |\ |\ |\ |\ |\ |\ |\
Securities Clearing Corporation (most specifically) then carrying
|\ |\ |\ |\ |\ |\ |\
and clearing firms can act as these as well.
|\ |\ |\ |\ |\ |\ |\ |\
What is a transfer agent? - CORRECT ANSWERS ✔✔(often a bank)
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
for a corporation is responsible for ensuring that its securities
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
are issued in the correct owner's name, canceling old and issuing
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
new certificates, maintaining records of ownership, and handling
|\ |\ |\ |\ |\ |\ |\ |\ |\
problems relating to lost, stolen, or destroyed certificates
|\ |\ |\ |\ |\ |\ |\
What is the function of the clearing corporation? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Acting as an intermediary in a trade, examples of |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
,these can be a commercial bank, can be a broker-dealer but
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
doesn't have to be |\ |\ |\
Who is considered a control person (security) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔those owned by directors, officers, or persons|\ |\ |\ |\ |\ |\ |\ |\
(which include corporations, trusts, etc.) who own or control 10%
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
or more of the issuer's equity securities (an unaffiliated person
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
would have to own 10% or more of the outstanding shares)
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
What are the two components of Return on Investment? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Capital gains and income |\ |\ |\ |\ |\
To expand the overall economy, we want to - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔buy securities via open-market operations, pushing interest
|\ |\ |\ |\ |\ |\ |\ |\
rates down |\
To meet a Regulation T margin call, a customer would have how
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
long? - CORRECT ANSWERS ✔✔settlement plus 2 additional
|\ |\ |\ |\ |\ |\ |\ |\
business days (or S + 2) |\ |\ |\ |\ |\
What is A fully disclosed broker-dealer - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔one that introduces its business to a carrying firm to clear
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
transactions
The regulation enacted by the SEC to protect the privacy of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
customer information is known as - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\
✔✔Regulation S-P |\
, A market maker that does not honor its firm quote is said to be -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔"backing away" |\ |\ |\
A deficit in the U.S. balance of payments can occur if - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔interest rates in foreign countries are higher than
|\ |\ |\ |\ |\ |\ |\ |\ |\
U.S. domestic rates and U.S. consumers are purchasing
|\ |\ |\ |\ |\ |\ |\ |\
(importing) foreign goods |\ |\
The general partner of a limited partnership has responsibility of
|\ |\ |\ |\ |\ |\ |\ |\ |\
- CORRECT ANSWERS ✔✔Organizing and managing the
|\ |\ |\ |\ |\ |\ |\ |\
partnership, assumes unlimited liability, and is responsible for |\ |\ |\ |\ |\ |\ |\ |\
paying all partnership debts
|\ |\ |\
To grow or expand the economy, U.S. fiscal policy should be to -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔cut taxes (so consumers have more
|\ |\ |\ |\ |\ |\ |\ |\
money to spend) and increase government spending for
|\ |\ |\ |\ |\ |\ |\ |\
programs and development (to create more jobs)|\ |\ |\ |\ |\ |\
What is the federal funds rate - CORRECT ANSWERS ✔✔the rate
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
commercial money center banks charge each other for an |\ |\ |\ |\ |\ |\ |\ |\ |\
overnight, unsecured loan |\ |\
The Federal Open Market Committee (FOMC) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔buy or sell Treasury securities in the open market.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Purchases add money to the economy, making the money
|\ |\ |\ |\ |\ |\ |\ |\ |\
available to lend more plentiful, and sales take money out of the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
economy, making money available to lend less plentiful.
|\ |\ |\ |\ |\ |\ |\
