SIE EXAMS QUESTIONS WITH PRECISE
ACCURATE SOLUTIONS /UPDATED
2026/GRADED A+
A 23-year-old recent college graduate has just inherited $28,000 from a
family member. The recent graduate is a novice investor whose only
exposure to the market consists of a few shares of a local utility company
given as a gift 15 years ago. After seeking advice from a registered
representative, the investor is unsure if the suggested 50% stock, 30%
bond, 20% cash allocation is the right investment. Which investment should
be made with the funds until the new investor decides?
A
Place the funds in a taxable money market
B
Place the funds in a tax-free money market
C
Invest 25% of the money until the investor gets accustomed to the
fluctuations of the market
D
Execute the original plan, since the investor is not knowledgeable enough to
hold a valid opinion - ANSWER-A
Place the funds in a taxable money market
A bankers' acceptance is used for which of the following purposes?
A
To finance credit card receivables
B
To guarantee collateral used in creating an ADR
,C
To facilitate the trading of foreign exchange
D
To finance a transaction between companies in two separate countries -
ANSWER-D
To finance a transaction between companies in two separate countries
A broker-dealer holds client securities with the firm's securities. This practice
is:
A
Prohibited, unless approved by the customer
B
Acceptable, provided proper paperwork is kept
C
Prohibited and defined as commingling
D
Acceptable when it only involves cash not securities - ANSWER-C
Prohibited and defined as commingling
A broker-dealer must forward, to its customers, all financial reports and
voter proxies related to securities held in customers' accounts. Is the broker-
dealer allowed to charge for this service?
A
The broker-dealer may charge customers for forwarding the voter proxies
but not for delivery of financial reports
B
,The broker-dealer may charge the customer for this service
C
The broker-dealer is not allowed to charge for this service
D
The broker-dealer may charge the issuer of these materials - ANSWER-D
The broker-dealer may charge the issuer of these materials
A broker-dealer who buys and sells for its own account is acting as a(n):
A
Agent
B
Syndicate
C
Underwriter
D
Principal - ANSWER-D
Principal
A client has $10,000 cash available in their cash account with XYZ broker-
dealer. On Tuesday the client purchases $15,000 of ABC stock, intending on
sending a payment of $5,000 by Thursday through an electronic funds
transfer. On Wednesday, ABC stock has a sizable increase in price due to a
rumor of a potential merger. The client decides to sell the shares of ABC
stock for $20,000 on Wednesday. What violation has the client engaged in?
A
Ghosting
B
, Backing away
C
Freeriding
D
Front running - ANSWER-C
Freeriding
A client is considering saving money for their child's education. The client
wants the money to grow on a tax-deferred basis but wants to retain the
ability to use the investment for both private high school and college
expenses. Which of the following options would be the best vehicle for this
investor?
A
Coverdell savings account
B
UGMA account
C
403(b) plan
D
Roth IRA - ANSWER-A
Coverdell savings account
A client puts $1,000 a month into a variable annuity. The client is
considering decreasing their monthly investments to a quarterly basis. At
present, the client has $275,000 in the annuity and wants to start
withdrawing the money upon retirement. What is the term used to describe
the current holdings?
ACCURATE SOLUTIONS /UPDATED
2026/GRADED A+
A 23-year-old recent college graduate has just inherited $28,000 from a
family member. The recent graduate is a novice investor whose only
exposure to the market consists of a few shares of a local utility company
given as a gift 15 years ago. After seeking advice from a registered
representative, the investor is unsure if the suggested 50% stock, 30%
bond, 20% cash allocation is the right investment. Which investment should
be made with the funds until the new investor decides?
A
Place the funds in a taxable money market
B
Place the funds in a tax-free money market
C
Invest 25% of the money until the investor gets accustomed to the
fluctuations of the market
D
Execute the original plan, since the investor is not knowledgeable enough to
hold a valid opinion - ANSWER-A
Place the funds in a taxable money market
A bankers' acceptance is used for which of the following purposes?
A
To finance credit card receivables
B
To guarantee collateral used in creating an ADR
,C
To facilitate the trading of foreign exchange
D
To finance a transaction between companies in two separate countries -
ANSWER-D
To finance a transaction between companies in two separate countries
A broker-dealer holds client securities with the firm's securities. This practice
is:
A
Prohibited, unless approved by the customer
B
Acceptable, provided proper paperwork is kept
C
Prohibited and defined as commingling
D
Acceptable when it only involves cash not securities - ANSWER-C
Prohibited and defined as commingling
A broker-dealer must forward, to its customers, all financial reports and
voter proxies related to securities held in customers' accounts. Is the broker-
dealer allowed to charge for this service?
A
The broker-dealer may charge customers for forwarding the voter proxies
but not for delivery of financial reports
B
,The broker-dealer may charge the customer for this service
C
The broker-dealer is not allowed to charge for this service
D
The broker-dealer may charge the issuer of these materials - ANSWER-D
The broker-dealer may charge the issuer of these materials
A broker-dealer who buys and sells for its own account is acting as a(n):
A
Agent
B
Syndicate
C
Underwriter
D
Principal - ANSWER-D
Principal
A client has $10,000 cash available in their cash account with XYZ broker-
dealer. On Tuesday the client purchases $15,000 of ABC stock, intending on
sending a payment of $5,000 by Thursday through an electronic funds
transfer. On Wednesday, ABC stock has a sizable increase in price due to a
rumor of a potential merger. The client decides to sell the shares of ABC
stock for $20,000 on Wednesday. What violation has the client engaged in?
A
Ghosting
B
, Backing away
C
Freeriding
D
Front running - ANSWER-C
Freeriding
A client is considering saving money for their child's education. The client
wants the money to grow on a tax-deferred basis but wants to retain the
ability to use the investment for both private high school and college
expenses. Which of the following options would be the best vehicle for this
investor?
A
Coverdell savings account
B
UGMA account
C
403(b) plan
D
Roth IRA - ANSWER-A
Coverdell savings account
A client puts $1,000 a month into a variable annuity. The client is
considering decreasing their monthly investments to a quarterly basis. At
present, the client has $275,000 in the annuity and wants to start
withdrawing the money upon retirement. What is the term used to describe
the current holdings?
