TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
SIE FINRA Exam Study Guide with
Complete Solutions
The Federal regulatory body that governs the securities industry is: - Answer✔️✔️-The
SEC
A fully disclosed BD: - Answer✔️✔️-is an inducing firm clearing its transactions through a
carrying firm
An intermediary between the buy and sell sides of a transaction is known as -
Answer✔️✔️-a clearing agent
For the Depository Trust and Clearing Corporation (DTCC), all of the following are true
EXCEPT:
a. it is a member of the Federal Reserve System
b. It acts as a retail bank servicing savings and checking accounts
c. it serves for the purpose of providing custody of securities
d. it is a worldwide clearing agent - Answer✔️✔️-b. it acts as a retail bank servicing
savings and checking accounts
Your BD acts as a prime broker for an institutional account. In this arrangement, your
BD is likely to be providing which of the following services? - Answer✔️✔️-clearing and
transaction settlement services for executing brokers
1/201
,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
An individual or institution willing to hold securities positions in its own proprietary
account for the purpose of providing liquidity to the marketplace is - Answer✔️✔️-a
market maker
An entity such as a corporation wishing to offer securities for sale to the public for the
purpose of raising capital is - Answer✔️✔️-an issuer
A nonprofit organization requiring members to pay assessments into a general
insurance fund used to meet customer claims in the event of a BD bankruptcy is -
Answer✔️✔️-the Securities Investors Protection Corporation (SIPC)
The FDIC provides insurance guaranteeing the safety of a depositor's accounts in FDIC
member banks for each deposit up to: - Answer✔️✔️-$250,000
Determining monetary policy and taking actions to implement those policies is the
responsibility of - Answer✔️✔️-the Federal Reserve Board (FRB)
The Magnolia Steel Corporation needs to build a refinery plant. It is estimated to cost
$750 million to complete. What market can be used to raise the money needed to build
the new plant? - Answer✔️✔️-Secondary Market
When securities are sold to the investing public in what are known as issuer
transactions, the transactions are being done in: - Answer✔️✔️-the primary market
If an investment company bought stock directly from a bank, bypassing any
intermediary or broker, this trade took place in - Answer✔️✔️-the fourth market
Which of the following statements regarding the third market is TRUE?
2/201
,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
a. it refers to trading of unlisted stocks directly between institutional investors
b. the services of a broker acting as an agent or intermediary are not used
c. It is composed of listed securities traded OTC
d. it is composed only of unlisted securities - Answer✔️✔️-c. It is composed of listed
securities traded OTC
An investor enters an order to purchase shares of XYZ stock. Another investor enters
an order to sell XYZ stock. These two orders meet on the floor of a US Stock Exchange
where they are executed. This transaction too place in: - Answer✔️✔️-the secondary
market
Assuming all other factors to remain constant, an increase in imports would most likely
cause GDP to - Answer✔️✔️-decrease
Which state of the business cycle is characterized by rising interest rates and higher
wages? - Answer✔️✔️-Expansion
An economic environment with little or no economic growth, but where inflation is
present, is best described as - Answer✔️✔️-Stagflation
It is generally agreed that the two primary policies impacting the U.S. economy are
fiscal and monetary. Which of the following would be considered tools of fiscal policy?
I. Government Spending
II. Operations of the Federal Open Market Committee (FOMC)
3/201
, TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
III. Changing the reserve requirements
IV. Taxation - Answer✔️✔️-Government Spending and Taxation
Which of the following is added to M2 to arrive at M3? - Answer✔️✔️-$100,000 and larger
time deposits
Which of the following actions of the Federal Reserve Board (FRB) would likely have
the effect of causing interest rates to increase?
I. The FOMC buying securities
II. Raising the reserve requirements
III. Raising the discount rate
IV. Raising the prime rate - Answer✔️✔️-Raising the reserve requirements & Raising the
discount rate
Economic data shows that the GDP has been declining steadily over the past two
quarters. This would suggest - Answer✔️✔️-a recession
All of the following would be considered a defensive industry security EXCEPT:
A. Tobacco stock
B. Food chain stock
C. Steel company stock
D. Utility company stock - Answer✔️✔️-steel company stock
Which of the following would be a leading economic indicator?
4/201
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
SIE FINRA Exam Study Guide with
Complete Solutions
The Federal regulatory body that governs the securities industry is: - Answer✔️✔️-The
SEC
A fully disclosed BD: - Answer✔️✔️-is an inducing firm clearing its transactions through a
carrying firm
An intermediary between the buy and sell sides of a transaction is known as -
Answer✔️✔️-a clearing agent
For the Depository Trust and Clearing Corporation (DTCC), all of the following are true
EXCEPT:
a. it is a member of the Federal Reserve System
b. It acts as a retail bank servicing savings and checking accounts
c. it serves for the purpose of providing custody of securities
d. it is a worldwide clearing agent - Answer✔️✔️-b. it acts as a retail bank servicing
savings and checking accounts
Your BD acts as a prime broker for an institutional account. In this arrangement, your
BD is likely to be providing which of the following services? - Answer✔️✔️-clearing and
transaction settlement services for executing brokers
1/201
,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
An individual or institution willing to hold securities positions in its own proprietary
account for the purpose of providing liquidity to the marketplace is - Answer✔️✔️-a
market maker
An entity such as a corporation wishing to offer securities for sale to the public for the
purpose of raising capital is - Answer✔️✔️-an issuer
A nonprofit organization requiring members to pay assessments into a general
insurance fund used to meet customer claims in the event of a BD bankruptcy is -
Answer✔️✔️-the Securities Investors Protection Corporation (SIPC)
The FDIC provides insurance guaranteeing the safety of a depositor's accounts in FDIC
member banks for each deposit up to: - Answer✔️✔️-$250,000
Determining monetary policy and taking actions to implement those policies is the
responsibility of - Answer✔️✔️-the Federal Reserve Board (FRB)
The Magnolia Steel Corporation needs to build a refinery plant. It is estimated to cost
$750 million to complete. What market can be used to raise the money needed to build
the new plant? - Answer✔️✔️-Secondary Market
When securities are sold to the investing public in what are known as issuer
transactions, the transactions are being done in: - Answer✔️✔️-the primary market
If an investment company bought stock directly from a bank, bypassing any
intermediary or broker, this trade took place in - Answer✔️✔️-the fourth market
Which of the following statements regarding the third market is TRUE?
2/201
,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
a. it refers to trading of unlisted stocks directly between institutional investors
b. the services of a broker acting as an agent or intermediary are not used
c. It is composed of listed securities traded OTC
d. it is composed only of unlisted securities - Answer✔️✔️-c. It is composed of listed
securities traded OTC
An investor enters an order to purchase shares of XYZ stock. Another investor enters
an order to sell XYZ stock. These two orders meet on the floor of a US Stock Exchange
where they are executed. This transaction too place in: - Answer✔️✔️-the secondary
market
Assuming all other factors to remain constant, an increase in imports would most likely
cause GDP to - Answer✔️✔️-decrease
Which state of the business cycle is characterized by rising interest rates and higher
wages? - Answer✔️✔️-Expansion
An economic environment with little or no economic growth, but where inflation is
present, is best described as - Answer✔️✔️-Stagflation
It is generally agreed that the two primary policies impacting the U.S. economy are
fiscal and monetary. Which of the following would be considered tools of fiscal policy?
I. Government Spending
II. Operations of the Federal Open Market Committee (FOMC)
3/201
, TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
III. Changing the reserve requirements
IV. Taxation - Answer✔️✔️-Government Spending and Taxation
Which of the following is added to M2 to arrive at M3? - Answer✔️✔️-$100,000 and larger
time deposits
Which of the following actions of the Federal Reserve Board (FRB) would likely have
the effect of causing interest rates to increase?
I. The FOMC buying securities
II. Raising the reserve requirements
III. Raising the discount rate
IV. Raising the prime rate - Answer✔️✔️-Raising the reserve requirements & Raising the
discount rate
Economic data shows that the GDP has been declining steadily over the past two
quarters. This would suggest - Answer✔️✔️-a recession
All of the following would be considered a defensive industry security EXCEPT:
A. Tobacco stock
B. Food chain stock
C. Steel company stock
D. Utility company stock - Answer✔️✔️-steel company stock
Which of the following would be a leading economic indicator?
4/201
