Comprehensive SIE Practice Exam 275 Questions with
Verified Answers
The primary purpose of a syndicate desk in the context of an equity offering is to:
- CORRECT ANSWER build an order book and allocate the stock
Which of the following responses describes an advantage of index funds? -
CORRECT ANSWER Lower management fees due to passive management of the
fund
Which of the following comparisons best describes the essential difference
between a primary distribution and a secondary distribution? - CORRECT ANSWER
A primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares.
The computation of dollar prices and accrued interest on municipal bonds is
normally on what calendar basis? - CORRECT ANSWER 30/360
Direct participation programs (DPPs) provide: - CORRECT ANSWER exposure to
non-correlated assets
Call protection is most valuable to a bond owner when bond prices are generally:
- CORRECT ANSWER rising
Which of the following represents the effect of a stock split? - CORRECT ANSWER
The price per share of common stock decreases
Stability in the value of a debt portfolio is greatest when: - CORRECT ANSWER
maturities of the debt securities are short.
Which of the following actions is required of a broker-dealer's anti-money
laundering (AML) program? - CORRECT ANSWER Designating an AML compliance
officer
,Which of the following actions violates FINRA rules regarding selling away? -
CORRECT ANSWER Engaging in private securities transactions without written
prior consent of the employing BD
Company ABC announces a 20% stock dividend for its common shareholders. If a
customer holds 1,000 shares at $50.00, what is the new price and number of
shares following the payment of the stock dividend? - CORRECT ANSWER 1,200
shares at $41.67
Roth 401(k) and Roth individual retirement account (IRA) plans share which of the
following features? - CORRECT ANSWER Qualified distributions are excluded from
federal income tax
An associated person who is not a registered representative is permitted to
engage in which of the following activities? - CORRECT ANSWER Provide account
opening forms to a new customer
The last transaction in XYZ 5.50s 2030 was at 102. This bond is selling at: -
CORRECT ANSWER a premium
A registered representative (RR) who wants to place a mutual fund advertisement
must obtain written approval from which of the following parties? - CORRECT
ANSWER A registered principal of the RR's firm
Under normal circumstances, a customer's letter of intent on a mutual fund
purchase is valid for what maximum period of time? - CORRECT ANSWER 13
months
To offer its shareholders a privilege to obtain its shares at a fixed price, which of
the following products does a corporation issue? - CORRECT ANSWER Rights
The call provision of a bond stipulates which of the following factors? - CORRECT
ANSWER Call date and call price
A decline in the gross domestic product (GDP) must last for at least how many
quarters to be considered a recession? - CORRECT ANSWER 2 quarters
, Regular way settlement on Treasury bonds is: - CORRECT ANSWER next business
day
Which of the following statements is true regarding a customer account held as
tenants in common? - CORRECT ANSWER The ownership of the decedent's assets
is governed by their will or state law.
Which of the following statements is true about treasury stock? - CORRECT
ANSWER It is issued stock that has been subsequently reacquired by the
corporation
Which of the following investment risks is the greatest risk in a variable life
insurance policy? - CORRECT ANSWER Market risk
In the event of a stock split, which of the following parties is required to maintain
a record of the shareholders eligible to receive the additional shares? - CORRECT
ANSWER Transfer agent
UTMA accounts are opened under the tax ID of the: - CORRECT ANSWER minor
Under industry regulations, an initial purchase of $3,000 of common stock in a
margin account requires a cash deposit of: - CORRECT ANSWER $2,000
At issue, which of the following debt securities mature in one year or less? -
CORRECT ANSWER Money market instruments
Which of the following considerations should a registered representative explain
to a customer when recommending a 529 savings plan? - CORRECT ANSWER The
potential deductibility of contributions from state taxes
A transaction in which a writer covers a position by purchasing an option is called:
- CORRECT ANSWER a closing purchase
Broker-dealer ABC seeks to underwrite a municipal securities offering by a local
town in which the mayor is currently seeking re-election. A municipal finance
professional who resides in the town and works for ABC contributed $200 to the
mayor's re-election campaign 13 months ago. If the employee wants to support
Verified Answers
The primary purpose of a syndicate desk in the context of an equity offering is to:
- CORRECT ANSWER build an order book and allocate the stock
Which of the following responses describes an advantage of index funds? -
CORRECT ANSWER Lower management fees due to passive management of the
fund
Which of the following comparisons best describes the essential difference
between a primary distribution and a secondary distribution? - CORRECT ANSWER
A primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares.
The computation of dollar prices and accrued interest on municipal bonds is
normally on what calendar basis? - CORRECT ANSWER 30/360
Direct participation programs (DPPs) provide: - CORRECT ANSWER exposure to
non-correlated assets
Call protection is most valuable to a bond owner when bond prices are generally:
- CORRECT ANSWER rising
Which of the following represents the effect of a stock split? - CORRECT ANSWER
The price per share of common stock decreases
Stability in the value of a debt portfolio is greatest when: - CORRECT ANSWER
maturities of the debt securities are short.
Which of the following actions is required of a broker-dealer's anti-money
laundering (AML) program? - CORRECT ANSWER Designating an AML compliance
officer
,Which of the following actions violates FINRA rules regarding selling away? -
CORRECT ANSWER Engaging in private securities transactions without written
prior consent of the employing BD
Company ABC announces a 20% stock dividend for its common shareholders. If a
customer holds 1,000 shares at $50.00, what is the new price and number of
shares following the payment of the stock dividend? - CORRECT ANSWER 1,200
shares at $41.67
Roth 401(k) and Roth individual retirement account (IRA) plans share which of the
following features? - CORRECT ANSWER Qualified distributions are excluded from
federal income tax
An associated person who is not a registered representative is permitted to
engage in which of the following activities? - CORRECT ANSWER Provide account
opening forms to a new customer
The last transaction in XYZ 5.50s 2030 was at 102. This bond is selling at: -
CORRECT ANSWER a premium
A registered representative (RR) who wants to place a mutual fund advertisement
must obtain written approval from which of the following parties? - CORRECT
ANSWER A registered principal of the RR's firm
Under normal circumstances, a customer's letter of intent on a mutual fund
purchase is valid for what maximum period of time? - CORRECT ANSWER 13
months
To offer its shareholders a privilege to obtain its shares at a fixed price, which of
the following products does a corporation issue? - CORRECT ANSWER Rights
The call provision of a bond stipulates which of the following factors? - CORRECT
ANSWER Call date and call price
A decline in the gross domestic product (GDP) must last for at least how many
quarters to be considered a recession? - CORRECT ANSWER 2 quarters
, Regular way settlement on Treasury bonds is: - CORRECT ANSWER next business
day
Which of the following statements is true regarding a customer account held as
tenants in common? - CORRECT ANSWER The ownership of the decedent's assets
is governed by their will or state law.
Which of the following statements is true about treasury stock? - CORRECT
ANSWER It is issued stock that has been subsequently reacquired by the
corporation
Which of the following investment risks is the greatest risk in a variable life
insurance policy? - CORRECT ANSWER Market risk
In the event of a stock split, which of the following parties is required to maintain
a record of the shareholders eligible to receive the additional shares? - CORRECT
ANSWER Transfer agent
UTMA accounts are opened under the tax ID of the: - CORRECT ANSWER minor
Under industry regulations, an initial purchase of $3,000 of common stock in a
margin account requires a cash deposit of: - CORRECT ANSWER $2,000
At issue, which of the following debt securities mature in one year or less? -
CORRECT ANSWER Money market instruments
Which of the following considerations should a registered representative explain
to a customer when recommending a 529 savings plan? - CORRECT ANSWER The
potential deductibility of contributions from state taxes
A transaction in which a writer covers a position by purchasing an option is called:
- CORRECT ANSWER a closing purchase
Broker-dealer ABC seeks to underwrite a municipal securities offering by a local
town in which the mayor is currently seeking re-election. A municipal finance
professional who resides in the town and works for ABC contributed $200 to the
mayor's re-election campaign 13 months ago. If the employee wants to support
