FINRA SIE LATEST 2026 TEST PAPER QUESTIONS AND
SOLUTIONS RATED A+
✔✔Describe the difference between primary distribution and secondary distribution. -
✔✔a primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares
✔✔If a market maker posts a quotes of 10.00 - 10.10 (25x10), which of the following
actions is the market maker willing to take?
sell 1,000 shares at $10 and buy 2,500 shares at $10.10
buy 2,500 shares at $10 and sell 1,000 shares at $10.10
sell 100 shares at $10 and buy 250 shares at $10.10
buy 250 shares at $10 and sell 100 shares at $10.10 - ✔✔buy 2,500 shares at $10 and
sell 1,000 shares at $10.10
✔✔All of the following risks apply to both foreign and domestic debt instruments
EXCEPT:
political
exchange
repayment
interest rate - ✔✔exchange
✔✔A married couple who earned income that exceeded $300k in each of the prior two
years and reasonably expects the same for this current year is:
a qualified investor
an accredited investor
an institutional investor
a qualified institutional buyer - ✔✔an accredited investor
✔✔The owner of which of the following products is MOST exposed to inflationary risks?
utility stocks
treasury bills
treasury bonds
blue chip industrials - ✔✔treasury bonds
✔✔What is the concept of an annuity contract? - ✔✔the kind of annuity selected partly
determines the payment amounts to the annuitant
✔✔Which of the following statement is true about all US Gov agency issues?
they are exempt from federal taxes
they are exempt from registration under the Securities Act of 1933
they are issued in bearer form only
they are general obligations of the fed gov - ✔✔they are exempt from registration under
the Securities Act of 1933
, ✔✔Direct participation programs (DPP's) provide:
liquidity and transparency
exposure to non-correlated assets with steady returns
market-related correlations with higher average returns
investors with direct purchases of stock from public companies - ✔✔exposure to non-
correlated assets with steady returns
✔✔Which of the following outcomes are possible for the writer of a covered call option?
profit limited and loss limited
profit limited and loss unlimited
profit unlimited and loss limited
profit unlimited and loss unlimited - ✔✔profit limited and loss limited
✔✔when is interest on treasury notes paid?
quarterly
semiannually
annually
at maturity - ✔✔semiannually
✔✔an associated person who is not a registered representative is permitted to engage
in which of the following activities?
accept an unsolicited customer order
provide account opening forms to a new customer
discuss the attributes of a particular investment product
prequalify prospective customers as to investment objectives - ✔✔provide account
opening forms to a new customer
✔✔a transaction in which a writer covers a position by purchasing an option is called:
closing sale
closing purchase
opening sale
opening purchase - ✔✔closing purchase
✔✔which of the following actions is required of a broker-dealer's anti-money laundering
program?
designating an AML compliance officer
filing of the firm's AML program with FINRA
conducting background checks of all employees
identifying to regulators the employees responsible for Currency Transaction Reports -
✔✔designating an AML compliance officer
✔✔Under the Securities Act of 1933, registration is required for which of the following
securities?
SOLUTIONS RATED A+
✔✔Describe the difference between primary distribution and secondary distribution. -
✔✔a primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares
✔✔If a market maker posts a quotes of 10.00 - 10.10 (25x10), which of the following
actions is the market maker willing to take?
sell 1,000 shares at $10 and buy 2,500 shares at $10.10
buy 2,500 shares at $10 and sell 1,000 shares at $10.10
sell 100 shares at $10 and buy 250 shares at $10.10
buy 250 shares at $10 and sell 100 shares at $10.10 - ✔✔buy 2,500 shares at $10 and
sell 1,000 shares at $10.10
✔✔All of the following risks apply to both foreign and domestic debt instruments
EXCEPT:
political
exchange
repayment
interest rate - ✔✔exchange
✔✔A married couple who earned income that exceeded $300k in each of the prior two
years and reasonably expects the same for this current year is:
a qualified investor
an accredited investor
an institutional investor
a qualified institutional buyer - ✔✔an accredited investor
✔✔The owner of which of the following products is MOST exposed to inflationary risks?
utility stocks
treasury bills
treasury bonds
blue chip industrials - ✔✔treasury bonds
✔✔What is the concept of an annuity contract? - ✔✔the kind of annuity selected partly
determines the payment amounts to the annuitant
✔✔Which of the following statement is true about all US Gov agency issues?
they are exempt from federal taxes
they are exempt from registration under the Securities Act of 1933
they are issued in bearer form only
they are general obligations of the fed gov - ✔✔they are exempt from registration under
the Securities Act of 1933
, ✔✔Direct participation programs (DPP's) provide:
liquidity and transparency
exposure to non-correlated assets with steady returns
market-related correlations with higher average returns
investors with direct purchases of stock from public companies - ✔✔exposure to non-
correlated assets with steady returns
✔✔Which of the following outcomes are possible for the writer of a covered call option?
profit limited and loss limited
profit limited and loss unlimited
profit unlimited and loss limited
profit unlimited and loss unlimited - ✔✔profit limited and loss limited
✔✔when is interest on treasury notes paid?
quarterly
semiannually
annually
at maturity - ✔✔semiannually
✔✔an associated person who is not a registered representative is permitted to engage
in which of the following activities?
accept an unsolicited customer order
provide account opening forms to a new customer
discuss the attributes of a particular investment product
prequalify prospective customers as to investment objectives - ✔✔provide account
opening forms to a new customer
✔✔a transaction in which a writer covers a position by purchasing an option is called:
closing sale
closing purchase
opening sale
opening purchase - ✔✔closing purchase
✔✔which of the following actions is required of a broker-dealer's anti-money laundering
program?
designating an AML compliance officer
filing of the firm's AML program with FINRA
conducting background checks of all employees
identifying to regulators the employees responsible for Currency Transaction Reports -
✔✔designating an AML compliance officer
✔✔Under the Securities Act of 1933, registration is required for which of the following
securities?
