SIE Exam Prep
A broker-dealer is permitted to accept payment for a new issue from a new
customer when the:
registration is effective
red herring is delivered
preliminary prospectus is amended
transaction takes place during the cooling-off period - ANS - registration is
effective
\A company announces a tender offer to its shareholders with the intent to buy a
maximum of 1 million shares of its outstanding stock at $10 per share and sets
no minimum number of shares to be purchased. An investor wants to participate
in this offer and tenders his 1,000 share position. At the close of the offer period,
only 900,000 shares have been tendered. How many, if any, of the investor's
shares will the company purchase?
0
100
900
1,000 - ANS - 1,000
\A company may pay dividends in which of the following ways?
Stock
Cash
Product
All of the above - ANS - All of the above
(A company may pay a dividend in any of the ways listed. A company may pay a
dividend in cash, product shares of its own stock or a stock of a subsidiary)
,\A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys
100 shares of ABC stock for $35 per share. The customer price will break when
the stock is selling at which price per share at expiration?
$3
$32
$35
$38 - ANS - $38
\A customer has a cash balance in her account together with long positions in
several securities. She has made no securities transactions in the account during
the past 18 months. How often must the firm send her an account statement?
Monthly
Quarterly
Semiannually
Annually - ANS - Quarterly
\A customer is an officer of a company that is involved in some significant
changes. All of the following items are examples of corporate affairs that could be
considered inside information if the customer shares them with his registered
representative except:
pending transactions
declared stock dividend
top management changes
imminent financial liquidity problems - ANS - declared stock dividend
\A decline in the gross domestic product (GDP) must last for at least how many
quarters to be considered a recession?
1 Quarter
2 Quarters
,3 Quarters
4 Quarters - ANS - 2 quarters
\A firm is a participant in a public offering. To sell a substantial amount of the
securities to its customers, the firm agrees to repurchase the shares at no less
than the original sales price. Such agreements are:
Prohibited as fraudulent and manipulative
Permissible if the securities are deposited into escrow
Prohibited unless the firm immediately sets aside funds for the repurchase
Permissible if the customers retain the right to sell the securities into the open
market - ANS - Prohibited as fraudulent and manipulative
\A married couple who earned income that exceed $300,000 in each of the prior
two years and reasonably expects the same for the current year is:
a qualified investor
an accredited investor
an institutional investor
a qualified institutional buyer (QIB) - ANS - an accredit investor
\A member of a stock exchange responsible for providing liquidity in a security
by being willing to buy and sell at all times is known as:
A broker
An underwriter
A market maker
A transfer agent - ANS - A market maker
\A note that help wanted ads in the Wall Street journal have been increasing. This
economic measure is a:
Leading indicator
, Lagging indicator
Co-incident indicator
None of the above - ANS - Leading indicator
(The number of employment ads is viewed as a leading indicator which will
predict a change in the economy. The duration of unemployment claims is
considered a lagging indicator, a result of change in the economy)
\A registered rep who has been working for their firm for several years is a
member of the Army Reserves and receives a notice that he is to be placed on
active duty. They must report to the base at the end of the following month. The
rep received six weeks' notice from the Army. Which of the following is/are false
as it relates to the agent?
I. The agent's registration must be terminated if the agent is going to be away
from the firm for more than 9 months
II. The agent may continue to receive transaction-based compensation while on
duty
III. The agent's registration will be placed on inactive status
IV. The agent is required to complete continuing education requirements within a
12-month window during the time they are inactive if not in an active military zone
IV only
II and III
II only
I and IV - ANS -
\A registered representative (RR) wants to participate in a private securities
transaction. Which of the following actions must the RR take?
Request a meeting with his supervisor to lay out the structure of the deal
Call his supervisor and inform her of the deal and the RR's potential involvement
Send written notice to his supervisor outlining the activity and compensation
structure
A broker-dealer is permitted to accept payment for a new issue from a new
customer when the:
registration is effective
red herring is delivered
preliminary prospectus is amended
transaction takes place during the cooling-off period - ANS - registration is
effective
\A company announces a tender offer to its shareholders with the intent to buy a
maximum of 1 million shares of its outstanding stock at $10 per share and sets
no minimum number of shares to be purchased. An investor wants to participate
in this offer and tenders his 1,000 share position. At the close of the offer period,
only 900,000 shares have been tendered. How many, if any, of the investor's
shares will the company purchase?
0
100
900
1,000 - ANS - 1,000
\A company may pay dividends in which of the following ways?
Stock
Cash
Product
All of the above - ANS - All of the above
(A company may pay a dividend in any of the ways listed. A company may pay a
dividend in cash, product shares of its own stock or a stock of a subsidiary)
,\A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys
100 shares of ABC stock for $35 per share. The customer price will break when
the stock is selling at which price per share at expiration?
$3
$32
$35
$38 - ANS - $38
\A customer has a cash balance in her account together with long positions in
several securities. She has made no securities transactions in the account during
the past 18 months. How often must the firm send her an account statement?
Monthly
Quarterly
Semiannually
Annually - ANS - Quarterly
\A customer is an officer of a company that is involved in some significant
changes. All of the following items are examples of corporate affairs that could be
considered inside information if the customer shares them with his registered
representative except:
pending transactions
declared stock dividend
top management changes
imminent financial liquidity problems - ANS - declared stock dividend
\A decline in the gross domestic product (GDP) must last for at least how many
quarters to be considered a recession?
1 Quarter
2 Quarters
,3 Quarters
4 Quarters - ANS - 2 quarters
\A firm is a participant in a public offering. To sell a substantial amount of the
securities to its customers, the firm agrees to repurchase the shares at no less
than the original sales price. Such agreements are:
Prohibited as fraudulent and manipulative
Permissible if the securities are deposited into escrow
Prohibited unless the firm immediately sets aside funds for the repurchase
Permissible if the customers retain the right to sell the securities into the open
market - ANS - Prohibited as fraudulent and manipulative
\A married couple who earned income that exceed $300,000 in each of the prior
two years and reasonably expects the same for the current year is:
a qualified investor
an accredited investor
an institutional investor
a qualified institutional buyer (QIB) - ANS - an accredit investor
\A member of a stock exchange responsible for providing liquidity in a security
by being willing to buy and sell at all times is known as:
A broker
An underwriter
A market maker
A transfer agent - ANS - A market maker
\A note that help wanted ads in the Wall Street journal have been increasing. This
economic measure is a:
Leading indicator
, Lagging indicator
Co-incident indicator
None of the above - ANS - Leading indicator
(The number of employment ads is viewed as a leading indicator which will
predict a change in the economy. The duration of unemployment claims is
considered a lagging indicator, a result of change in the economy)
\A registered rep who has been working for their firm for several years is a
member of the Army Reserves and receives a notice that he is to be placed on
active duty. They must report to the base at the end of the following month. The
rep received six weeks' notice from the Army. Which of the following is/are false
as it relates to the agent?
I. The agent's registration must be terminated if the agent is going to be away
from the firm for more than 9 months
II. The agent may continue to receive transaction-based compensation while on
duty
III. The agent's registration will be placed on inactive status
IV. The agent is required to complete continuing education requirements within a
12-month window during the time they are inactive if not in an active military zone
IV only
II and III
II only
I and IV - ANS -
\A registered representative (RR) wants to participate in a private securities
transaction. Which of the following actions must the RR take?
Request a meeting with his supervisor to lay out the structure of the deal
Call his supervisor and inform her of the deal and the RR's potential involvement
Send written notice to his supervisor outlining the activity and compensation
structure
