SIE exam caril questions and answers 2024\2025
A+ Grade
What type of risk is unique to a specific industry, business enterprise, or investment type?
- correct answer Nonsystematic risk
Under which of the following circumstances is an investor in a position to acquire stock?
- correct answer Buy a call, sell a call (The holder of a call has the right to buy stock at the strike price if
exercised. The seller of a put is obligated to buy stock at the strike price if exercised)
Options- a premium
- correct answer the cost of an option contract, expressed in dollars per share of the underlying stock
Options- strike price
- correct answer The price at which the stock will be bought or sold if the contract is exercised,
expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to buy 100 shares right
now. How could the customer use options to profit from an increase in the stock's price?
- correct answer buy calls, write puts (both are bullish)
A corporation's offer to current stockholders of the ability to purchase a proportionate number of new
shares at a specific price for a limited time is called a
- correct answer right (they usually expire in 30-45 days)
American depositary receipts (ADRs)
- correct answer issued by banks, represent a specific number of shares of a foreign company, and trade
and pay dividends in dollars
Which of the following records must be maintained for 6 years?
- correct answer Customer ledgers (statements)
,While underwriters can assist with preparation and filing, the accuracy and adequacy of these
documents is the responsibility of the
- correct answer Issuing corporation
What institutions serve as depository and clearing facilities?
- correct answer Depository Trust Company and National Securities Clearing Corporation (most
specifically) then carrying and clearing firms can act as these as well.
What is a transfer agent?
- correct answer (often a bank) for a corporation is responsible for ensuring that its securities are issued
in the correct owner's name, canceling old and issuing new certificates, maintaining records of
ownership, and handling problems relating to lost, stolen, or destroyed certificates
What is the function of the clearing corporation?
- correct answer Acting as an intermediary in a trade, examples of these can be a commercial bank, can
be a broker-dealer but doesn't have to be
Who is considered a control person (security)
- correct answer those owned by directors, officers, or persons (which include corporations, trusts, etc.)
who own or control 10% or more of the issuer's equity securities (an unaffiliated person would have to
own 10% or more of the outstanding shares)
What are the two components of Return on Investment?
- correct answer Capital gains and income
To expand the overall economy, we want to
- correct answer buy securities via open-market operations, pushing interest rates down
To meet a Regulation T margin call, a customer would have how long?
- correct answer settlement plus 2 additional business days (or S + 2)
What is A fully disclosed broker-dealer
- correct answer one that introduces its business to a carrying firm to clear transactions
,The regulation enacted by the SEC to protect the privacy of customer information is known as
- correct answer Regulation S-P
A market maker that does not honor its firm quote is said to be
- correct answer "backing away"
A deficit in the U.S. balance of payments can occur if
- correct answer interest rates in foreign countries are higher than U.S. domestic rates and U.S.
consumers are purchasing (importing) foreign goods
The general partner of a limited partnership has responsibility of
- correct answer Organizing and managing the partnership, assumes unlimited liability, and is
responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to
- correct answer cut taxes (so consumers have more money to spend) and increase government
spending for programs and development (to create more jobs)
What is the federal funds rate
- correct answer the rate commercial money center banks charge each other for an overnight,
unsecured loan
The Federal Open Market Committee (FOMC)
- correct answer buy or sell Treasury securities in the open market. Purchases add money to the
economy, making the money available to lend more plentiful, and sales take money out of the economy,
making money available to lend less plentiful.
Reports of rising inventories generally occur during which period of the business cycle?
- correct answer Contraction, due to a lack of consumer demand
Who is exempt from registering with SIPC?
- correct answer Those who deal exclusively with US Government securities (i.e.-Treasury bonds),
exclusively municipality securities, and in redeemable investment company securities
, Retail investor
- correct answer An individual who makes investments such as the purchase of securities for his or her
account rather than for an organization
Market maker
- correct answer Any entity, individual or organization, willing to accept the risk of holding a particular
security in its own account to facilitate trading and provide liquidity in that security
When the Federal Reserve Board wants to expand (loosen) the money supply, it will
- correct answer buy Treasury securities from banks in the open market
SROs functioning under the SEC include...
- correct answer FINRA, MSRB and CBOE
Mild inflation can
- correct answer encourage growth and stimulate the economy
Discount rate
- correct answer The rate the FRB charges member banks
Prime rate
- correct answer The rate commercial banks (Wells Fargo) charges their most creditworthy investors
(Lincoln Financial). Prime rate decreases when banks sell securities because there's money money in the
market and don't need to charge as much. Raise the rate when they buy securities.
4 stages of the business cycle
- correct answer expansion (recovery), peak (prosperity), contraction (decline), trough, and then
expansion (recovery) again
Securities Act of 1933
- correct answer (The Paper Act, Prospectus Act, New Issues Act) requires that issuers who want to raise
capital by making a public offering of securities to the public, provide full and fair disclosure of all
material facts about the company and the securities being offered.
A+ Grade
What type of risk is unique to a specific industry, business enterprise, or investment type?
- correct answer Nonsystematic risk
Under which of the following circumstances is an investor in a position to acquire stock?
- correct answer Buy a call, sell a call (The holder of a call has the right to buy stock at the strike price if
exercised. The seller of a put is obligated to buy stock at the strike price if exercised)
Options- a premium
- correct answer the cost of an option contract, expressed in dollars per share of the underlying stock
Options- strike price
- correct answer The price at which the stock will be bought or sold if the contract is exercised,
expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to buy 100 shares right
now. How could the customer use options to profit from an increase in the stock's price?
- correct answer buy calls, write puts (both are bullish)
A corporation's offer to current stockholders of the ability to purchase a proportionate number of new
shares at a specific price for a limited time is called a
- correct answer right (they usually expire in 30-45 days)
American depositary receipts (ADRs)
- correct answer issued by banks, represent a specific number of shares of a foreign company, and trade
and pay dividends in dollars
Which of the following records must be maintained for 6 years?
- correct answer Customer ledgers (statements)
,While underwriters can assist with preparation and filing, the accuracy and adequacy of these
documents is the responsibility of the
- correct answer Issuing corporation
What institutions serve as depository and clearing facilities?
- correct answer Depository Trust Company and National Securities Clearing Corporation (most
specifically) then carrying and clearing firms can act as these as well.
What is a transfer agent?
- correct answer (often a bank) for a corporation is responsible for ensuring that its securities are issued
in the correct owner's name, canceling old and issuing new certificates, maintaining records of
ownership, and handling problems relating to lost, stolen, or destroyed certificates
What is the function of the clearing corporation?
- correct answer Acting as an intermediary in a trade, examples of these can be a commercial bank, can
be a broker-dealer but doesn't have to be
Who is considered a control person (security)
- correct answer those owned by directors, officers, or persons (which include corporations, trusts, etc.)
who own or control 10% or more of the issuer's equity securities (an unaffiliated person would have to
own 10% or more of the outstanding shares)
What are the two components of Return on Investment?
- correct answer Capital gains and income
To expand the overall economy, we want to
- correct answer buy securities via open-market operations, pushing interest rates down
To meet a Regulation T margin call, a customer would have how long?
- correct answer settlement plus 2 additional business days (or S + 2)
What is A fully disclosed broker-dealer
- correct answer one that introduces its business to a carrying firm to clear transactions
,The regulation enacted by the SEC to protect the privacy of customer information is known as
- correct answer Regulation S-P
A market maker that does not honor its firm quote is said to be
- correct answer "backing away"
A deficit in the U.S. balance of payments can occur if
- correct answer interest rates in foreign countries are higher than U.S. domestic rates and U.S.
consumers are purchasing (importing) foreign goods
The general partner of a limited partnership has responsibility of
- correct answer Organizing and managing the partnership, assumes unlimited liability, and is
responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to
- correct answer cut taxes (so consumers have more money to spend) and increase government
spending for programs and development (to create more jobs)
What is the federal funds rate
- correct answer the rate commercial money center banks charge each other for an overnight,
unsecured loan
The Federal Open Market Committee (FOMC)
- correct answer buy or sell Treasury securities in the open market. Purchases add money to the
economy, making the money available to lend more plentiful, and sales take money out of the economy,
making money available to lend less plentiful.
Reports of rising inventories generally occur during which period of the business cycle?
- correct answer Contraction, due to a lack of consumer demand
Who is exempt from registering with SIPC?
- correct answer Those who deal exclusively with US Government securities (i.e.-Treasury bonds),
exclusively municipality securities, and in redeemable investment company securities
, Retail investor
- correct answer An individual who makes investments such as the purchase of securities for his or her
account rather than for an organization
Market maker
- correct answer Any entity, individual or organization, willing to accept the risk of holding a particular
security in its own account to facilitate trading and provide liquidity in that security
When the Federal Reserve Board wants to expand (loosen) the money supply, it will
- correct answer buy Treasury securities from banks in the open market
SROs functioning under the SEC include...
- correct answer FINRA, MSRB and CBOE
Mild inflation can
- correct answer encourage growth and stimulate the economy
Discount rate
- correct answer The rate the FRB charges member banks
Prime rate
- correct answer The rate commercial banks (Wells Fargo) charges their most creditworthy investors
(Lincoln Financial). Prime rate decreases when banks sell securities because there's money money in the
market and don't need to charge as much. Raise the rate when they buy securities.
4 stages of the business cycle
- correct answer expansion (recovery), peak (prosperity), contraction (decline), trough, and then
expansion (recovery) again
Securities Act of 1933
- correct answer (The Paper Act, Prospectus Act, New Issues Act) requires that issuers who want to raise
capital by making a public offering of securities to the public, provide full and fair disclosure of all
material facts about the company and the securities being offered.
