SIE Exam Prep 2025 test exam with ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
correct answers ||\\||\\
What is an investment company? - correct answers✔✔An entity that pools investors' money
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
to purchase securities on their behalf
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the main purpose of a mutual fund? - correct answers✔✔To pool money from
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
investors and invest in a diversified portfolio of securities ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What type of investment company issues redeemable securities? - correct answers✔✔Open-
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
end investment companies (mutual funds)
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
Which type of investment company is actively traded on an exchange? - correct
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
answers✔✔Closed-end investment company ||\\||\\ ||\\||\\
What is an ETF? - correct answers✔✔An exchange-traded fund that trades like a stock but
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
represents a diversified portfolio ||\\||\\ ||\\||\\ ||\\||\\
What does NAV stand for? - correct answers✔✔Net Asset Value
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
How often is NAV calculated for a mutual fund? - correct answers✔✔Once per business day,
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
typically at market close ||\\||\\ ||\\||\\ ||\\||\\
What is a load in mutual fund terms? - correct answers✔✔A sales charge on mutual funds
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
paid by the investor
||\\||\\ ||\\||\\ ||\\||\\
,What is a no-load fund? - correct answers✔✔A mutual fund with no sales charge
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a front-end load? - correct answers✔✔A sales charge applied at the time of
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
purchase
What is an expense ratio? - correct answers✔✔The percentage of assets used to cover
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
operating expenses in a mutual fund ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a 12b-1 fee? - correct answers✔✔A fee for marketing and distribution expenses of a
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
mutual fund
||\\||\\ ||\\||\\
What does DPP stand for? - correct answers✔✔Direct Participation Program
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the main purpose of a DPP? - correct answers✔✔To pass income, losses, and tax
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
benefits directly to investors ||\\||\\ ||\\||\\ ||\\||\\
What is a REIT? - correct answers✔✔A Real Estate Investment Trust that invests in real
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
estate or real estate mortgages ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
How are REITs typically taxed? - correct answers✔✔They must distribute at least 90% of
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
income to avoid corporate tax ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a closed-end investment company? - correct answers✔✔An investment company
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
that issues a fixed number of shares that trade on an exchange
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the main difference between open-end and closed-end investment companies? -
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
correct answers✔✔Open-end companies issue new shares as investors buy, while closed-end
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
companies have a fixed number of shares
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
, Do UITs trade on the secondary market? - correct answers✔✔No, they are redeemable
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
securities
What is a money market fund? - correct answers✔✔A type of mutual fund that invests in
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
short-term, high-quality debt securities ||\\||\\ ||\\||\\ ||\\||\\
What is the primary risk of a money market fund? - correct answers✔✔Inflation risk
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What type of mutual fund charges a higher 12b-1 fee? - correct answers✔✔Class C shares
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the minimum percent of assets a mutual fund must invest in securities to maintain
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
its status? - correct answers✔✔75%
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the maximum limit on a mutual fund's 12b-1 fee? - correct answers✔✔0.75% for
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
no-load funds, up to 1% for load funds ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a growth fund? - correct answers✔✔A mutual fund that primarily seeks capital
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
appreciation by investing in stocks ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a balanced fund? - correct answers✔✔A mutual fund that includes a mix of stocks
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
and bonds ||\\||\\
What type of securities do municipal bond funds invest in? - correct answers✔✔Municipal
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
bonds for tax-exempt income ||\\||\\ ||\\||\\ ||\\||\\
What does a high expense ratio indicate about a mutual fund? - correct answers✔✔It has
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
higher operating expenses ||\\||\\ ||\\||\\
correct answers ||\\||\\
What is an investment company? - correct answers✔✔An entity that pools investors' money
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
to purchase securities on their behalf
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the main purpose of a mutual fund? - correct answers✔✔To pool money from
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
investors and invest in a diversified portfolio of securities ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What type of investment company issues redeemable securities? - correct answers✔✔Open-
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
end investment companies (mutual funds)
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
Which type of investment company is actively traded on an exchange? - correct
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
answers✔✔Closed-end investment company ||\\||\\ ||\\||\\
What is an ETF? - correct answers✔✔An exchange-traded fund that trades like a stock but
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
represents a diversified portfolio ||\\||\\ ||\\||\\ ||\\||\\
What does NAV stand for? - correct answers✔✔Net Asset Value
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
How often is NAV calculated for a mutual fund? - correct answers✔✔Once per business day,
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
typically at market close ||\\||\\ ||\\||\\ ||\\||\\
What is a load in mutual fund terms? - correct answers✔✔A sales charge on mutual funds
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
paid by the investor
||\\||\\ ||\\||\\ ||\\||\\
,What is a no-load fund? - correct answers✔✔A mutual fund with no sales charge
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a front-end load? - correct answers✔✔A sales charge applied at the time of
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
purchase
What is an expense ratio? - correct answers✔✔The percentage of assets used to cover
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
operating expenses in a mutual fund ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a 12b-1 fee? - correct answers✔✔A fee for marketing and distribution expenses of a
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
mutual fund
||\\||\\ ||\\||\\
What does DPP stand for? - correct answers✔✔Direct Participation Program
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the main purpose of a DPP? - correct answers✔✔To pass income, losses, and tax
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
benefits directly to investors ||\\||\\ ||\\||\\ ||\\||\\
What is a REIT? - correct answers✔✔A Real Estate Investment Trust that invests in real
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
estate or real estate mortgages ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
How are REITs typically taxed? - correct answers✔✔They must distribute at least 90% of
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
income to avoid corporate tax ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a closed-end investment company? - correct answers✔✔An investment company
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
that issues a fixed number of shares that trade on an exchange
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the main difference between open-end and closed-end investment companies? -
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
correct answers✔✔Open-end companies issue new shares as investors buy, while closed-end
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
companies have a fixed number of shares
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
, Do UITs trade on the secondary market? - correct answers✔✔No, they are redeemable
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
securities
What is a money market fund? - correct answers✔✔A type of mutual fund that invests in
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
short-term, high-quality debt securities ||\\||\\ ||\\||\\ ||\\||\\
What is the primary risk of a money market fund? - correct answers✔✔Inflation risk
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What type of mutual fund charges a higher 12b-1 fee? - correct answers✔✔Class C shares
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the minimum percent of assets a mutual fund must invest in securities to maintain
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
its status? - correct answers✔✔75%
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is the maximum limit on a mutual fund's 12b-1 fee? - correct answers✔✔0.75% for
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
no-load funds, up to 1% for load funds ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a growth fund? - correct answers✔✔A mutual fund that primarily seeks capital
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
appreciation by investing in stocks ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
What is a balanced fund? - correct answers✔✔A mutual fund that includes a mix of stocks
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
and bonds ||\\||\\
What type of securities do municipal bond funds invest in? - correct answers✔✔Municipal
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
bonds for tax-exempt income ||\\||\\ ||\\||\\ ||\\||\\
What does a high expense ratio indicate about a mutual fund? - correct answers✔✔It has
||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\
higher operating expenses ||\\||\\ ||\\||\\
