SIE Exam Unit 18 – Issues Questions and Answers | 100% Pass

SIE Exam Unit 18 – Issues Questions and Answers | 100% Pass All of the following would be required for a discretionary account except A) the account must receive Financial Industry Regulatory Authority (FINRA) approval prior to the first trade. B) a principal at the firm must authorize discretion. C) all trades must be promptly approved by a principal at the firm. D) the customer must authorize discretion. - Answer️️ -The account must receive Financial Industry Regulatory Authority (FINRA) approval prior to the first trade Selling long is equivalent to which of the following? A) Selling to open then buying to close B) Selling to open C) Selling short D) Selling to close - Answer️️ -Selling to Close When a customer owns a position and then sells that position, that is referred to as selling _____________ or selling ________ __________ - Answer️️ -Long, to Close TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 2/12 When a customer _______________ a position and then ______________ that position, that is referred to as selling long or selling to close - Answer️️ -Owns, Sells All of the following are required for a discretionary account except A) all trades must be promptly approved by a principal at the firm. B) the customer must authorize discretion. C) a principal at the firm must authorize discretion. D) the account must receive FINRA approval prior to the first trade. - Answer️️ -The account must receive FINRA approval prior to first trade Short sellers have A) limited profit and loss potential. B) unlimited profit and loss potential. C) limited profit potential and an unlimited loss potential. D) unlimited profit potential and limited loss potential. - Answer️️ -Limited profit potential and unlimited loss potential Short sellers are _______________ - Answer️️ -Bearish Because stock could only go down as far as zero, the profit for a ________________ _________________ is limited to the difference between the price the stock was shorted at and zero - Answer️️ -Short Seller TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 3/12 Meeting the location requirements and the borrowing of securities when a customer wants to sell short is done by A) the customer who wants to sell short. B) the purchaser of the securities being sold short. C) the customer or entity that the shares will be borrowed from. D) the broker-dealer on behalf of the short-selling customer. - Answer️️ -The broker dealer on behalf of the short selling customer Meeting the location requirements and the borrowing of securities is done by the back office of the _______________ ________________ on behalf of the short-selling customer. - Answer️️ -Broker Dealer Which of the following transactions has the least risk? A) Buying to open B) Selling short C) Short against the box D) Selling to open - Answer️️ -Short against the box Position that is created when an investor creates a short stock position (sells short) while also holding the shares long - Answer️️ -Short Against the Box The locate requirement is an element of which of the following transactions? TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 4/12 A) Sell to close B) Buy to open C) Sell to open D) Buy to close - Answer️️ -Sell to Open When _________________ ______________ shares must be borrowed from the dealer. - Answer️️ -Selling Short When ____________________ to __________________ shares must be borrowed from the dealer. - Answer️️ -Selling, Open The trade would need to be placed in a discretionary account if the registered representative chooses which of the following? I. The time of execution of the trade II. Which security to buy III. How much of the security to buy IV At what price to execute the trade A) I and II B) II and IV C) II and III D) I and IV - Answer️️ -II & III TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 5/12 If the registered representative chooses the asset, the action, or the amount, it must be placed in a _________________ account - Answer️️ -Discretionary Which of the following would be required in discretionary accounts? A) Prompt approval by a principal following each discretionary trade B) Securities and Exchange Commission (SEC) approval to open the account C) Financial Industry Regulatory Authority (FINRA) approval to open the account D) Prior approval by a principal before each discretionary trade is placed - Answer️️ - Prompt approval by a principal following each discretionary trade A customer who is short against the box may close the position by all the following except A) covering the short with the stock in his acco