SIE Exam-Questions with Correct Answers/ Verified/ 100% Pass
industrial development revenue bonds - ✔️✔️Industrial development revenue bonds are a type of
taxable municipal security that is issued by a municipality on behalf of a corporation. Specifically, the
municipality will issue to debt to build a facility on behalf of a corporation and then lease that facility
to the corporation. Because the bonds are backed by lease payments made by the corporation, the
debt is the responsibility and credit quality of the corporation.
Which Gov Bond pays monthly interest? - ✔️✔️Ginnie Mae's pay interest monthly because the
underlying mortgages that serve as collateral for the bonds also pay interest monthly.
What type of fund trades above and below NAV - ✔️✔️A closed end investment company may
trade at a premium or a discount to its net asset value.
A "not-held" order means - ✔️✔️A "market, not-held" order means that the customer is letting the
RR use her own best judgment as to the price and time at which the transaction will be executed,
and will not hold the RR responsible if she misses the market for a security
non-qualified variable annuity pays taxes on: - ✔️✔️Distributions from non-qualified variable
annuities are subject to tax liability on the amount in excess of the original contribution (which was
funded with after-tax dollars).
Credit risk is best defined as the risk that - ✔️✔️Credit risk is the risk that the borrower will be
unable to make the required payments on the loan to the lender, including interest and principal.
Notice that a borrower does not collect required payments from a lender, rather, lenders collect
payments from borrowers.
Restrictions to those who are in the Specially Designated Nationals list: - ✔️✔️The Specially
Designated National List must be created pursuant to the USA Patriot Act, and transactions with
parties on this list are strictly prohibited.
In a period of stable interest rates, which preferred stock would fluctuate and why? - ✔️✔️The
price of the convertible preferred stock is most likely to fluctuate in value because the price of the
underlying common stock to which the preferred can be converted will influence the value of the
preferred stock itself. Namely, if the price of the common stock increases, the price of the
convertible preferred will also increase.
, What are the limits of trading under a statutory disqualification? - ✔️✔️A statutory disqualifcation
will occur if a registered representative is conviction of any felony or a securities or fraud related
misdemeanor in the past 10 years. Once statutory disqualified, the individual cannot be associated
with a FINRA member firm unless they receive a waiver from FINRA.
The interest income on federal agency securities is taxed at which levels? - ✔️✔️All levels
An investor concerned about rising prices would most likely invest in a fixed or variable maturity? -
✔️✔️Investments in equities generally serve as a hedge against inflation. Fixed income
investments, such as fixed annuities will lose purchasing power as prices increase. The tax
consequence of an investment is not relevant when considering how to hedge against rising prices.
What is the difference between a U4 and a U5 form? - ✔️✔️A registered representative's U4 must
be updated and kept current. Generally, an amended U4 must be completed within 30 days of a
change, though any event resulting in a statutory disqualifcation must be reported within 10 days. A
Form U5 would be filed for a termination of a rep's registration.
When XYZ is 35, which of the following option contracts is out of the money? - ✔️✔️A put option is
out of the money when the market price of the underlying security is above the strike price of the
put option.
What amount of money may a public official receive from the associated persons of a municipal
broker-dealer without triggering the prohibitions of Rule G-37? - ✔️✔️An associated person may
make a contribution of up to $250 per year per election to a public official. If an individual
contributes an amount in excess of $250, the firm and individual are prohibited from doing any
negotiated business with that municipality for two years.
A customer has an inactive account at a broker-dealer firm. The firm must report to the customer -
✔️✔️For inactive accounts, firms must send statements to customers on a quarterly basis. For
active accounts, customers must receive statements monthly.
) If a municipality appoints an underwriter to offer a new issue, the underwriting is - ✔️✔️If a
municipality appoints an underwriter to offer a new issue, it is a negotiated underwriting. This differs
from a competitive bidding process whereby an issuer invites bids from potential underwriters and
gives the deal to the firm offering the lowest interest cost to the issuer.
A joint account may be opened by all of the following EXCEPT - ✔️✔️A minor may not open an
individual account or a joint account. Minors are only able to open UGMA accounts.
industrial development revenue bonds - ✔️✔️Industrial development revenue bonds are a type of
taxable municipal security that is issued by a municipality on behalf of a corporation. Specifically, the
municipality will issue to debt to build a facility on behalf of a corporation and then lease that facility
to the corporation. Because the bonds are backed by lease payments made by the corporation, the
debt is the responsibility and credit quality of the corporation.
Which Gov Bond pays monthly interest? - ✔️✔️Ginnie Mae's pay interest monthly because the
underlying mortgages that serve as collateral for the bonds also pay interest monthly.
What type of fund trades above and below NAV - ✔️✔️A closed end investment company may
trade at a premium or a discount to its net asset value.
A "not-held" order means - ✔️✔️A "market, not-held" order means that the customer is letting the
RR use her own best judgment as to the price and time at which the transaction will be executed,
and will not hold the RR responsible if she misses the market for a security
non-qualified variable annuity pays taxes on: - ✔️✔️Distributions from non-qualified variable
annuities are subject to tax liability on the amount in excess of the original contribution (which was
funded with after-tax dollars).
Credit risk is best defined as the risk that - ✔️✔️Credit risk is the risk that the borrower will be
unable to make the required payments on the loan to the lender, including interest and principal.
Notice that a borrower does not collect required payments from a lender, rather, lenders collect
payments from borrowers.
Restrictions to those who are in the Specially Designated Nationals list: - ✔️✔️The Specially
Designated National List must be created pursuant to the USA Patriot Act, and transactions with
parties on this list are strictly prohibited.
In a period of stable interest rates, which preferred stock would fluctuate and why? - ✔️✔️The
price of the convertible preferred stock is most likely to fluctuate in value because the price of the
underlying common stock to which the preferred can be converted will influence the value of the
preferred stock itself. Namely, if the price of the common stock increases, the price of the
convertible preferred will also increase.
, What are the limits of trading under a statutory disqualification? - ✔️✔️A statutory disqualifcation
will occur if a registered representative is conviction of any felony or a securities or fraud related
misdemeanor in the past 10 years. Once statutory disqualified, the individual cannot be associated
with a FINRA member firm unless they receive a waiver from FINRA.
The interest income on federal agency securities is taxed at which levels? - ✔️✔️All levels
An investor concerned about rising prices would most likely invest in a fixed or variable maturity? -
✔️✔️Investments in equities generally serve as a hedge against inflation. Fixed income
investments, such as fixed annuities will lose purchasing power as prices increase. The tax
consequence of an investment is not relevant when considering how to hedge against rising prices.
What is the difference between a U4 and a U5 form? - ✔️✔️A registered representative's U4 must
be updated and kept current. Generally, an amended U4 must be completed within 30 days of a
change, though any event resulting in a statutory disqualifcation must be reported within 10 days. A
Form U5 would be filed for a termination of a rep's registration.
When XYZ is 35, which of the following option contracts is out of the money? - ✔️✔️A put option is
out of the money when the market price of the underlying security is above the strike price of the
put option.
What amount of money may a public official receive from the associated persons of a municipal
broker-dealer without triggering the prohibitions of Rule G-37? - ✔️✔️An associated person may
make a contribution of up to $250 per year per election to a public official. If an individual
contributes an amount in excess of $250, the firm and individual are prohibited from doing any
negotiated business with that municipality for two years.
A customer has an inactive account at a broker-dealer firm. The firm must report to the customer -
✔️✔️For inactive accounts, firms must send statements to customers on a quarterly basis. For
active accounts, customers must receive statements monthly.
) If a municipality appoints an underwriter to offer a new issue, the underwriting is - ✔️✔️If a
municipality appoints an underwriter to offer a new issue, it is a negotiated underwriting. This differs
from a competitive bidding process whereby an issuer invites bids from potential underwriters and
gives the deal to the firm offering the lowest interest cost to the issuer.
A joint account may be opened by all of the following EXCEPT - ✔️✔️A minor may not open an
individual account or a joint account. Minors are only able to open UGMA accounts.
