Complete FINRA SIE Actual Practice Questions
2026/2027 – Multiple Choice Test with Answers
for Exam Readiness | pdf
1. Which security represents a debt obligation of a corporation?
A. Common stock
B. Preferred stock
C. Corporate bond
D. Option
Explanation: 👀 **
A bond is a debt instrument. The issuer promises to repay principal plus
interest.
2. Which order guarantees execution but not price?
A. Limit order
B. Stop order
C. Market order
D. Stop-limit order
Explanation: 👀 **
A market order executes immediately at the best available price.
3. A customer who wants income with priority over common stock should
invest in:
,A. Common stock
B. Preferred stock
C. Options
D. ETFs
Explanation: 👀 **
Preferred stock pays fixed dividends and has priority over common stock.
4. Which risk cannot be eliminated through diversification?
A. Business risk
B. Credit risk
C. Market (systematic) risk
D. Liquidity risk
Explanation: 👀 **
Market risk affects the entire market and cannot be diversified away.
5. A bond trading above par is said to be trading at a:
A. Discount
B. Par
C. Premium
D. Yield
Explanation: 👀 **
When a bond’s price is above face value, it trades at a premium.
6. Which product pools investor money and is professionally managed?
, A. ETF
B. Mutual fund
C. Common stock
D. Option
Explanation: 👀 **
Mutual funds pool investor funds and are actively or passively managed.
7. What happens to bond yields when bond prices rise?
A. Rise
B. Stay the same
C. Fall
D. Become fixed
Explanation: 👀 **
Bond prices and yields move in opposite directions.
8. Which customer account requires approval from a registered principal?
A. Cash account
B. Custodial account
C. Margin account
D. Individual account
Explanation: 👀 **
Margin accounts involve borrowing and must be approved by a principal.
9. Which option position benefits from rising prices?
2026/2027 – Multiple Choice Test with Answers
for Exam Readiness | pdf
1. Which security represents a debt obligation of a corporation?
A. Common stock
B. Preferred stock
C. Corporate bond
D. Option
Explanation: 👀 **
A bond is a debt instrument. The issuer promises to repay principal plus
interest.
2. Which order guarantees execution but not price?
A. Limit order
B. Stop order
C. Market order
D. Stop-limit order
Explanation: 👀 **
A market order executes immediately at the best available price.
3. A customer who wants income with priority over common stock should
invest in:
,A. Common stock
B. Preferred stock
C. Options
D. ETFs
Explanation: 👀 **
Preferred stock pays fixed dividends and has priority over common stock.
4. Which risk cannot be eliminated through diversification?
A. Business risk
B. Credit risk
C. Market (systematic) risk
D. Liquidity risk
Explanation: 👀 **
Market risk affects the entire market and cannot be diversified away.
5. A bond trading above par is said to be trading at a:
A. Discount
B. Par
C. Premium
D. Yield
Explanation: 👀 **
When a bond’s price is above face value, it trades at a premium.
6. Which product pools investor money and is professionally managed?
, A. ETF
B. Mutual fund
C. Common stock
D. Option
Explanation: 👀 **
Mutual funds pool investor funds and are actively or passively managed.
7. What happens to bond yields when bond prices rise?
A. Rise
B. Stay the same
C. Fall
D. Become fixed
Explanation: 👀 **
Bond prices and yields move in opposite directions.
8. Which customer account requires approval from a registered principal?
A. Cash account
B. Custodial account
C. Margin account
D. Individual account
Explanation: 👀 **
Margin accounts involve borrowing and must be approved by a principal.
9. Which option position benefits from rising prices?
