SIE (Securities Industry Essentials)
Complete Exam Study Questions
with 100% Correct Answers
Already Graded A+
1. The forward pricing rule applies to - ANSWER purchases and redemptions
of the shares of open-end investment companies
2. The Windmill Alternative Energy Fund offers its shares to the public at the
fund's net asset value (NAV) based on the next calculation of that figure.
Based on this, you can say the fund is - ANSWER no-load fund
3. An investor purchases a call. She has - ANSWER unlimited upside and
limited downside
4. When shares are held in street name, this refers to the shares being -
ANSWER held in the name of the broker-dealer for the beneficial owner.
5. For tax purposes, which of the following is not associated with being
reportable as ordinary income? - ANSWER Gains from securities
transactions.
6. When an investor wants to sell shares short, first the shares must be -
ANSWER located in order to be borrowed.
,7. Rob takes a job with Seacoast Securities, a FINRA member broker-dealer
firm, as a receptionist in a branch. Which of the following activities may
violate the rules concerning activities of registered persons? - ANSWER
Directing a customer to a flyer for a specific mutual fund that Rob really
likes.
8. Money laundering is defined as - ANSWER a process used to make funds
obtained from illegal activities appear to have come from an original source.
9. BakeCo, an NYSE-listed food company, has decided to split off its cooking
making corporation. Current shareholders will receive one share of the new
company, BigCookieCo they own as of the record date. This action is an
example of - ANSWER a spin-off
10.The Conduct Rules - ANSWER Set out fair and ethical trade practices that
member firms and their representatives must follow.
11.How often must a representative complete the firm element continuing
education (CE) requirement? - ANSWER annually
12.For common shareholders, which of the following is true? - ANSWER an
increase in the value of shares owned represents growth or capital
appreciation
13.For an owner to be paid a dividend, his name should be recorded on the
stock record book of the issuer's agent by - ANSWER the record date
14.A quote of Seabird Airlines (SBRD) is 17 B 17 1/2 A 5x5. A customer
would be able to sell how many share and at what price? - ANSWER 500
shares at $17 per share.
,15.A corporation enlists the service of a transfer agent, who would be expected
to handle all of the following functions expect - ANSWER registering the
corporation's securities with the state.
16.Which of the following is not true regarding convertible bonds? - ANSWER
coupon rates are usually higher than nonconvertible bond rates of the same
issuer.
17.Which of the following transactions may be made on margin? - ANSWER
The purchase of the NYSE-listed closed-end fund shares
18.A company that has issued cumulative preferred stock - ANSWER pays in
arrears and current preferred dividends before paying dividends on common
stock
19.Your customer receives a 10% stock dividend on 1,000 shares owned.
Regarding this dividend, you correctly explain that the position will do
what? - ANSWER Increase by 100 shares, but the price per share will be
adjusted downward
20.A client buys stock on Monday, May 2, in a cash account. Under Regulation
T, when is the client's payment due? - ANSWER same
21.In a split offering - ANSWER shares are issued from existing shareholders
only
22.You quote ABC stock to a customer 72 bid for $1,000 shares, 700 offered at
72.10. Which of the following is true? - ANSWER The quote's inside
spread is $0.10.
, 23.As participants in a firm commitment underwriting agreement, the
underwriters know that - ANSWER they, the underwriters, will be acting as
principals buying the securities from the issuer.
24.Paula has applied for a representative position with Great Sky Securities, a
broker-dealer firm and a FINRA member. While in college, she was a bit of
a trouble maker. Since completing her education four years ago, she's been a
model citizen. Which of the following issues from her past may result in her
disqualification from becoming a registered representative? - ANSWER A
charge six years ago of grand theft auto for the time she went joyriding in
the dean's car in celebration of making the dean's list.
25.Under the Uniform Transfers to Minors Act (UTMA), Oscar wants to give
some stock to his brother's son, whose father is the legal guardian over.
However, if Oscar wants to name himself as the custodian, which of the
following needs to be done? - ANSWER Oscar must open the account and
name himself as the custodian.
26.Which of the following is among the items of information that must be
entered on a new account form? - ANSWER Names of all persons who will
have access to the account.
27.Regarding preferred stock, all of the following are true expect - ANSWER a
corporation issuing common stocks must issue at least one class of preferred
shares.
28.Supply-side economist believe that the government should - ANSWER use
taxation to increase or decrease the money supply.
Complete Exam Study Questions
with 100% Correct Answers
Already Graded A+
1. The forward pricing rule applies to - ANSWER purchases and redemptions
of the shares of open-end investment companies
2. The Windmill Alternative Energy Fund offers its shares to the public at the
fund's net asset value (NAV) based on the next calculation of that figure.
Based on this, you can say the fund is - ANSWER no-load fund
3. An investor purchases a call. She has - ANSWER unlimited upside and
limited downside
4. When shares are held in street name, this refers to the shares being -
ANSWER held in the name of the broker-dealer for the beneficial owner.
5. For tax purposes, which of the following is not associated with being
reportable as ordinary income? - ANSWER Gains from securities
transactions.
6. When an investor wants to sell shares short, first the shares must be -
ANSWER located in order to be borrowed.
,7. Rob takes a job with Seacoast Securities, a FINRA member broker-dealer
firm, as a receptionist in a branch. Which of the following activities may
violate the rules concerning activities of registered persons? - ANSWER
Directing a customer to a flyer for a specific mutual fund that Rob really
likes.
8. Money laundering is defined as - ANSWER a process used to make funds
obtained from illegal activities appear to have come from an original source.
9. BakeCo, an NYSE-listed food company, has decided to split off its cooking
making corporation. Current shareholders will receive one share of the new
company, BigCookieCo they own as of the record date. This action is an
example of - ANSWER a spin-off
10.The Conduct Rules - ANSWER Set out fair and ethical trade practices that
member firms and their representatives must follow.
11.How often must a representative complete the firm element continuing
education (CE) requirement? - ANSWER annually
12.For common shareholders, which of the following is true? - ANSWER an
increase in the value of shares owned represents growth or capital
appreciation
13.For an owner to be paid a dividend, his name should be recorded on the
stock record book of the issuer's agent by - ANSWER the record date
14.A quote of Seabird Airlines (SBRD) is 17 B 17 1/2 A 5x5. A customer
would be able to sell how many share and at what price? - ANSWER 500
shares at $17 per share.
,15.A corporation enlists the service of a transfer agent, who would be expected
to handle all of the following functions expect - ANSWER registering the
corporation's securities with the state.
16.Which of the following is not true regarding convertible bonds? - ANSWER
coupon rates are usually higher than nonconvertible bond rates of the same
issuer.
17.Which of the following transactions may be made on margin? - ANSWER
The purchase of the NYSE-listed closed-end fund shares
18.A company that has issued cumulative preferred stock - ANSWER pays in
arrears and current preferred dividends before paying dividends on common
stock
19.Your customer receives a 10% stock dividend on 1,000 shares owned.
Regarding this dividend, you correctly explain that the position will do
what? - ANSWER Increase by 100 shares, but the price per share will be
adjusted downward
20.A client buys stock on Monday, May 2, in a cash account. Under Regulation
T, when is the client's payment due? - ANSWER same
21.In a split offering - ANSWER shares are issued from existing shareholders
only
22.You quote ABC stock to a customer 72 bid for $1,000 shares, 700 offered at
72.10. Which of the following is true? - ANSWER The quote's inside
spread is $0.10.
, 23.As participants in a firm commitment underwriting agreement, the
underwriters know that - ANSWER they, the underwriters, will be acting as
principals buying the securities from the issuer.
24.Paula has applied for a representative position with Great Sky Securities, a
broker-dealer firm and a FINRA member. While in college, she was a bit of
a trouble maker. Since completing her education four years ago, she's been a
model citizen. Which of the following issues from her past may result in her
disqualification from becoming a registered representative? - ANSWER A
charge six years ago of grand theft auto for the time she went joyriding in
the dean's car in celebration of making the dean's list.
25.Under the Uniform Transfers to Minors Act (UTMA), Oscar wants to give
some stock to his brother's son, whose father is the legal guardian over.
However, if Oscar wants to name himself as the custodian, which of the
following needs to be done? - ANSWER Oscar must open the account and
name himself as the custodian.
26.Which of the following is among the items of information that must be
entered on a new account form? - ANSWER Names of all persons who will
have access to the account.
27.Regarding preferred stock, all of the following are true expect - ANSWER a
corporation issuing common stocks must issue at least one class of preferred
shares.
28.Supply-side economist believe that the government should - ANSWER use
taxation to increase or decrease the money supply.
