SIE Practice Exam Study Guide 2026 | Complete Review |
Graded A+
1. An investor feels that the economy may be entering a recessionary period.
What type of stock should she be considering?
Value stock
Defensive stock
Cyclical stock
Growth stock
2. In this offering, the firm offers shares to existing stockholders on a pro rata
basis.
outstanding shares offering
public offering
private placement
rights offering
3. If an investor is seeking a safe place to park cash for short-term needs, which
type of fund would be most appropriate?
Money market fund
Growth mutual fund
Equity index fund
Real estate investment trust
4. Describe the circumstances under which investment advisors are required to
file an audited balance sheet with the SEC.
, Investment advisors must file an audited balance sheet if they have
custody of client assets only.
Investment advisors must file an audited balance sheet if they charge
any fees in advance.
Investment advisors must file an audited balance sheet if they manage
over $1 million in assets.
Investment advisors must file an audited balance sheet if they have
$1,200 or more in advance fees and in excess of $500 for each
client.
5. What does the acronym FINRA stand for?
Financial Industry Regulatory Authority
Federal Insurance and Regulatory Agency
Financial Information and Regulatory Authority
Federal Investment Network Regulatory Agency
6. William, age 56, recently retired from Epsilon Inc., and would like to take a
distribution from a retirement plan to pay for medical expenses. Which of the
following plans would allow William to take a penalty free withdrawal?
401(k) from Epsilon Inc
Single premium deferred annuity
Traditional IRA
Money purchase plan from his employer before Epsilon Inc
7. An investor sells a naked call on Omikron for a $250 premium. Which of the
following is true regarding the investor's position?
The investor's potential loss is limited to $250
, The investor is expecting Omikron stock to increase in value
The investor's outlook on Omikron is bullish
The investor's potential loss is unlimited
8. If a company produces 10,000 units of a product but only sells 7,000 units,
what market condition does this scenario illustrate, and what action might the
company take?
Shortage; the company might increase production.
Equilibrium; the company might maintain current production levels.
Deficit; the company might raise prices to maximize profits.
Surplus; the company might reduce prices to increase sales.
9. Which of the following entities is NOT defined as a self-regulatory
organization (SRO)?
The Options Clearing Corporation (OCC)
The New York Stock Exchange (NYSE)
The Federal Reserve Board (FRB)
The Depository Trust Corporation (DTC)
10. Which of the following is a type of public offering auction in which the price
of the offering is set after taking in all bids to determine the highest price at
which the total offering can be sold?
Dutch auction
European auction
Canadian auction
American auction
, 11. If an investor plans to invest $100,000 in a mutual fund over the next 13
months and signs a letter of intent, what benefit might they receive?
Breakpoint discount on mutual fund shares
Guaranteed interest rate on the investment
Access to exclusive investment opportunities
Free financial advisory services
12. Describe the primary purpose of Regulation SHO in relation to short selling
practices.
Regulation SHO establishes guidelines for investment advisers.
Regulation SHO focuses on enhancing corporate governance in
public companies.
Regulation SHO is designed to regulate the issuance of new
securities.
Regulation SHO aims to update short sale regulations and mitigate
issues related to abusive naked short selling.
13. Which entity must US financial institutions file a currency transaction report
with?
SEC
IRS
FinCEN
FDIC
14. A written promise to pay a definite sum of money on a specific future date is
a:
Graded A+
1. An investor feels that the economy may be entering a recessionary period.
What type of stock should she be considering?
Value stock
Defensive stock
Cyclical stock
Growth stock
2. In this offering, the firm offers shares to existing stockholders on a pro rata
basis.
outstanding shares offering
public offering
private placement
rights offering
3. If an investor is seeking a safe place to park cash for short-term needs, which
type of fund would be most appropriate?
Money market fund
Growth mutual fund
Equity index fund
Real estate investment trust
4. Describe the circumstances under which investment advisors are required to
file an audited balance sheet with the SEC.
, Investment advisors must file an audited balance sheet if they have
custody of client assets only.
Investment advisors must file an audited balance sheet if they charge
any fees in advance.
Investment advisors must file an audited balance sheet if they manage
over $1 million in assets.
Investment advisors must file an audited balance sheet if they have
$1,200 or more in advance fees and in excess of $500 for each
client.
5. What does the acronym FINRA stand for?
Financial Industry Regulatory Authority
Federal Insurance and Regulatory Agency
Financial Information and Regulatory Authority
Federal Investment Network Regulatory Agency
6. William, age 56, recently retired from Epsilon Inc., and would like to take a
distribution from a retirement plan to pay for medical expenses. Which of the
following plans would allow William to take a penalty free withdrawal?
401(k) from Epsilon Inc
Single premium deferred annuity
Traditional IRA
Money purchase plan from his employer before Epsilon Inc
7. An investor sells a naked call on Omikron for a $250 premium. Which of the
following is true regarding the investor's position?
The investor's potential loss is limited to $250
, The investor is expecting Omikron stock to increase in value
The investor's outlook on Omikron is bullish
The investor's potential loss is unlimited
8. If a company produces 10,000 units of a product but only sells 7,000 units,
what market condition does this scenario illustrate, and what action might the
company take?
Shortage; the company might increase production.
Equilibrium; the company might maintain current production levels.
Deficit; the company might raise prices to maximize profits.
Surplus; the company might reduce prices to increase sales.
9. Which of the following entities is NOT defined as a self-regulatory
organization (SRO)?
The Options Clearing Corporation (OCC)
The New York Stock Exchange (NYSE)
The Federal Reserve Board (FRB)
The Depository Trust Corporation (DTC)
10. Which of the following is a type of public offering auction in which the price
of the offering is set after taking in all bids to determine the highest price at
which the total offering can be sold?
Dutch auction
European auction
Canadian auction
American auction
, 11. If an investor plans to invest $100,000 in a mutual fund over the next 13
months and signs a letter of intent, what benefit might they receive?
Breakpoint discount on mutual fund shares
Guaranteed interest rate on the investment
Access to exclusive investment opportunities
Free financial advisory services
12. Describe the primary purpose of Regulation SHO in relation to short selling
practices.
Regulation SHO establishes guidelines for investment advisers.
Regulation SHO focuses on enhancing corporate governance in
public companies.
Regulation SHO is designed to regulate the issuance of new
securities.
Regulation SHO aims to update short sale regulations and mitigate
issues related to abusive naked short selling.
13. Which entity must US financial institutions file a currency transaction report
with?
SEC
IRS
FinCEN
FDIC
14. A written promise to pay a definite sum of money on a specific future date is
a:
