SIE ADB Practice Exam Questions
The CBOE VIX measures: - Answers -The S&P 500 Volitility
Which of the following is required to be maintained for 3 years?
- Customer account records,
- Instant Messages,
- Currency Transaction Reports
- Customer Complaints - Answers -Instant Messages — because correspondence and
retail communication are held for the shortest amount of time.
FINRA Record Keeping Requirements: - Answers -3 Years: correspondence,
communication, records of gifts
4 Years: Complaints
5 Years: CTR and SAR Reports
6 Years: Account Records, Municipal Complaints, POA
Life +3: Articles of Incorporation, Partnership Agreement, Stock Certificate Books
Which of the following statements is true regarding the summary prospectus?
- It is also called a red herring
- it includes an application to open a new account and is offer to sell,
- is a simple ad describing the nature of the offering,
- contains supplementary information regarding the many items on the prospectus
which must be furnished upon request - Answers -It Includes an application to open a
new account and is an offer to sell
If income is passed on to the partners of a DPP what can the partners do with this for
tax purposes?
- use it to reinvest in the DPP to defer taxation
- invest it in a qualified retirement plan to take a tax deduction
- it can be used to offset passive losses
- use it to offset capital losses - Answers -It can be used to offset passive losses
Which of the following statements best describes the same investment company that
offers various mutual funds with different investment objectives?
- Investment Advisor
- Family of Funds
- Annuity
- Broker-Dealer - Answers -Family of Funds
,Which index is the broadest measure of the market?
- Vault Line
- Wilshire Index
- S&P 500
- Dow Jones Industrial - Answers -Wilshire Index
What do each of the major indexes measure? - Answers -Dow - best average of the
market, 30 positions
S&P - 500 top companies
Wilshire - broadest measure
Value Line Index - 1,700 exchanged traded stocks
Which of the following statements concerning FINRA review of communications policy
are correct?
- a log of all individual correspondence related to investment companies must be
submitted to FINRA on a quarterly basis
- all advertisements pertaining to guaranteed contracts must be submitted to FINRA
within 10 days of first use
- an investment company advertisement must be submitted to FINRA 10 days prior to
first use
- all retail communication regarding investment company products must be submitted to
FINRA within 10 days of first use - Answers -- all retail communication regarding
investment company products must be submitted to FINRA within 10 days of first use
ABC is quoted at 15 - 16 what's the bid?
- 15
- 15 1/2
-1
- 16 - Answers -15 because when referencing a stock and not government bonds, the
two number format is listing the bid price and ask price
A General Rule of Allocation - Answers -100 - the client's age = the amount they should
be in equities
If a customer names a certain price at which to sell, this is what type of order? -
Answers -Limit order
A "stop order" gets its name from - Answers -The intent to "stop losses" when a stock's
price hits a certain floor
Stop Limit Order - Answers -A stop order that becomes a limit order after the specified
stop price has been reached or passed
, T/F: An LLC is a Taxable entity - Answers -False - An LLC usually is taxed as a
partnership allowing the flow-through of taxation to the members
All of the following are true regarding the post-registration period except:
- the final prospectus is filed with the SEC
- underwriters set the price of the issue
- active marketing and selling of securities begins
- the period begins when the registration statement is filed - Answers -the period begins
when the registration statement is filed (already filed If in the POST registration period)
All of the following who'd be considered a party of interest under ERISA except?
- Plan fiduciary
- spouse of an employee
- employee
- employer - Answers -Spouse of employee
Who is the principle federal regulatory agency for the securities agency? - Answers -
SEC
Which of the following info is NOT included in a registration statement?
- info about the management of the company
- public offering price
- a description of the company's properties and business
- financial statements certified by independent accounts - Answers -Public offering price
Purpose of the registration statement is to provide? - Answers -- Background info on the
business
- Proposed amount of funds to be raised
- Proposed price per share
- Intended use for proceeds
- Accounting statements
- Amount paid to affiliated persons
- Holdings of officers, directors, and underwriters
- Risk Factors
A registered rep is opening a new account and the customer refuses to provide their
income, net worth, and investing experience. Which of the following are true?
- the account cannot be opened
- the account can be opened with principle approval
- any suitable recommendation is permitted
- no recommendation is permitted - Answers -Options 2 and 4. The info refused is not
vital for account opening, but the customer can only make unsolicited transactions
without providing all requested info
Which of the following securities would have the greatest taxation risk?
The CBOE VIX measures: - Answers -The S&P 500 Volitility
Which of the following is required to be maintained for 3 years?
- Customer account records,
- Instant Messages,
- Currency Transaction Reports
- Customer Complaints - Answers -Instant Messages — because correspondence and
retail communication are held for the shortest amount of time.
FINRA Record Keeping Requirements: - Answers -3 Years: correspondence,
communication, records of gifts
4 Years: Complaints
5 Years: CTR and SAR Reports
6 Years: Account Records, Municipal Complaints, POA
Life +3: Articles of Incorporation, Partnership Agreement, Stock Certificate Books
Which of the following statements is true regarding the summary prospectus?
- It is also called a red herring
- it includes an application to open a new account and is offer to sell,
- is a simple ad describing the nature of the offering,
- contains supplementary information regarding the many items on the prospectus
which must be furnished upon request - Answers -It Includes an application to open a
new account and is an offer to sell
If income is passed on to the partners of a DPP what can the partners do with this for
tax purposes?
- use it to reinvest in the DPP to defer taxation
- invest it in a qualified retirement plan to take a tax deduction
- it can be used to offset passive losses
- use it to offset capital losses - Answers -It can be used to offset passive losses
Which of the following statements best describes the same investment company that
offers various mutual funds with different investment objectives?
- Investment Advisor
- Family of Funds
- Annuity
- Broker-Dealer - Answers -Family of Funds
,Which index is the broadest measure of the market?
- Vault Line
- Wilshire Index
- S&P 500
- Dow Jones Industrial - Answers -Wilshire Index
What do each of the major indexes measure? - Answers -Dow - best average of the
market, 30 positions
S&P - 500 top companies
Wilshire - broadest measure
Value Line Index - 1,700 exchanged traded stocks
Which of the following statements concerning FINRA review of communications policy
are correct?
- a log of all individual correspondence related to investment companies must be
submitted to FINRA on a quarterly basis
- all advertisements pertaining to guaranteed contracts must be submitted to FINRA
within 10 days of first use
- an investment company advertisement must be submitted to FINRA 10 days prior to
first use
- all retail communication regarding investment company products must be submitted to
FINRA within 10 days of first use - Answers -- all retail communication regarding
investment company products must be submitted to FINRA within 10 days of first use
ABC is quoted at 15 - 16 what's the bid?
- 15
- 15 1/2
-1
- 16 - Answers -15 because when referencing a stock and not government bonds, the
two number format is listing the bid price and ask price
A General Rule of Allocation - Answers -100 - the client's age = the amount they should
be in equities
If a customer names a certain price at which to sell, this is what type of order? -
Answers -Limit order
A "stop order" gets its name from - Answers -The intent to "stop losses" when a stock's
price hits a certain floor
Stop Limit Order - Answers -A stop order that becomes a limit order after the specified
stop price has been reached or passed
, T/F: An LLC is a Taxable entity - Answers -False - An LLC usually is taxed as a
partnership allowing the flow-through of taxation to the members
All of the following are true regarding the post-registration period except:
- the final prospectus is filed with the SEC
- underwriters set the price of the issue
- active marketing and selling of securities begins
- the period begins when the registration statement is filed - Answers -the period begins
when the registration statement is filed (already filed If in the POST registration period)
All of the following who'd be considered a party of interest under ERISA except?
- Plan fiduciary
- spouse of an employee
- employee
- employer - Answers -Spouse of employee
Who is the principle federal regulatory agency for the securities agency? - Answers -
SEC
Which of the following info is NOT included in a registration statement?
- info about the management of the company
- public offering price
- a description of the company's properties and business
- financial statements certified by independent accounts - Answers -Public offering price
Purpose of the registration statement is to provide? - Answers -- Background info on the
business
- Proposed amount of funds to be raised
- Proposed price per share
- Intended use for proceeds
- Accounting statements
- Amount paid to affiliated persons
- Holdings of officers, directors, and underwriters
- Risk Factors
A registered rep is opening a new account and the customer refuses to provide their
income, net worth, and investing experience. Which of the following are true?
- the account cannot be opened
- the account can be opened with principle approval
- any suitable recommendation is permitted
- no recommendation is permitted - Answers -Options 2 and 4. The info refused is not
vital for account opening, but the customer can only make unsolicited transactions
without providing all requested info
Which of the following securities would have the greatest taxation risk?
