FINRA SIE EXAM | STUDY QUESTIONS
AND ANSWERS RATED A+ | LATEST
2025/2026 GUIDE
A customer sells 1,000 shares of ZBT to her broker-dealer. Of the 1,000
shares, 500 of the shares are purchased by the broker-dealer for its own
account and the other 500 were subsequently sold to another broker-
dealer. The customer's broker-dealer acted as a(n): - Correct Answer -
If a broker-dealer buys or sells all or a part of the securities that are sold
to/purchased by a customer, it has acted in a principal or dealer
capacity.
The Municipal Securities Rulemaking Board (MSRB) does NOT regulate
which of the following? - Correct Answer - The MSRB has the power
to regulate municipal securities broker-dealers, their personnel, and their
municipal securities communications with the public. However, the
MSRB doesn't have the authority to regulate municipal issuers.
A registered representative previously operated a sole proprietorship
and requested protection from bankruptcy. The representative did not
disclose her affiliation with the proprietorship when she filed Form U4.
Which of the following statements regarding the application is TRUE? -
Correct Answer - Bankruptcies that have occurred in the last 10 years
is a disclosure event on Form U4. If an applicant failed to disclose that
she was involved in an insolvent business that filed for bankruptcy, the
,application is false and misleading. The Form U4 is required to be
updated immediately and FINRA could reject the application for having
filed misleading information.
A Treasury bond is quoted 105.04 - 105.24. The purchase price that a
customer would expect to pay would be: - Correct Answer - U.S.
Treasury notes and bonds are quoted in 32nds of a point. When
purchasing the bond, the customer would pay the offering price of
105.24. To convert 105.24 into a dollar price:
Step 1: 105.24 is equal to 105 24/32
Step 2: convert 24/32 into a decimal, which is .75
Step 3: convert 105.75% into a dollar price (105.75% x $1,000 = 1.0575
x $1,000 = $1,057.50)
All of the following persons are permitted to be named as a trusted
contact person for a senior investor, EXCEPT: - Correct Answer - To
be a trusted contact person for a senior investor, the only requirements
are that the person must be a natural person (not a law firm) and be at
least 18 years old.
Which of the following choices would NOT be subject to the holding
period restriction under Rule 144? - Correct Answer - There is a
required holding period of six months for all restricted stock. Restricted
,stock is unregistered stock that was acquired as a result of a private
placement. There is no required holding period for control stock.
However, if an affiliate (control person) acquires stock as a result of a
private placement, this stock would be considered restricted stock rather
than control stock and would be subject to the holding period. Control
stock acquired as a result of an open-market purchase is exempt from
the holding period.
A corporation will be paying a cash dividend to its shareholders. On what
date will the market price of the stock be reduced? - Correct Answer -
The ex-date is the first day that a stock trades without its dividend
included in its price. On the ex-date, the stock's price is reduced by the
amount of (or enough to cover) the dividend. (13260)
Which of the following statements is TRUE concerning electronic
communication networks (ECNs)? - Correct Answer - Electronic
communication networks (ECNs) are securities trading systems that are
designed to anonymously match buyers with sellers. These systems can
be used by both institutional and retail investors. One of the benefits of
their use is immediate automatic execution if a matching buy or sell
order can be found on the system. ECNs do not allow investors to trade
directly with one another; however, they do allow subscribers (e.g.,
broker-dealers) to use these systems to execute orders that they receive
from their clients.
When discussing the purchase of a variable annuity with a client, the RR
is not required to disclose: - Correct Answer - Probate fees and costs
, are associated with establishing the validity of a will, which is not a
disclosure item for annuities. However, surrender, mortality, and
administrative fees must be disclosed. (17541)
An investor purchases a 20-year 5.30% bond at par value that will yield
5.75% if called at the first call date in five years. The yield to maturity on
the bond is: - Correct Answer - The bond has a coupon rate (nominal
yield) of 5.30%. If the bond is purchased at its par value and is not
called, but held to maturity, the bond's yield will be the same as the
coupon rate, which is 5.30%.
A broker-dealer must establish information barriers between which two
departments? - Correct Answer - Investment banking and trading
If a temporary hold has been placed on an account, it may be extended:
- Correct Answer - If a temporary hold is placed on the account of a
specified adult, it will initially expire 15 business days after it was placed
on the account. The temporary hold may be extended twice by the firm.
The first extension is 10 business days and the second extension is for
30 additional business days. In all, broker-dealers can place a hold for a
total of 55 business days (15 days initially + 10-day extension + 30-day
extension).
A company's stock has decreased in value as a result of increased costs
associated with impending regulations. This is considered: - Correct
Answer - Political risk is the risk that an investment may lose value due
AND ANSWERS RATED A+ | LATEST
2025/2026 GUIDE
A customer sells 1,000 shares of ZBT to her broker-dealer. Of the 1,000
shares, 500 of the shares are purchased by the broker-dealer for its own
account and the other 500 were subsequently sold to another broker-
dealer. The customer's broker-dealer acted as a(n): - Correct Answer -
If a broker-dealer buys or sells all or a part of the securities that are sold
to/purchased by a customer, it has acted in a principal or dealer
capacity.
The Municipal Securities Rulemaking Board (MSRB) does NOT regulate
which of the following? - Correct Answer - The MSRB has the power
to regulate municipal securities broker-dealers, their personnel, and their
municipal securities communications with the public. However, the
MSRB doesn't have the authority to regulate municipal issuers.
A registered representative previously operated a sole proprietorship
and requested protection from bankruptcy. The representative did not
disclose her affiliation with the proprietorship when she filed Form U4.
Which of the following statements regarding the application is TRUE? -
Correct Answer - Bankruptcies that have occurred in the last 10 years
is a disclosure event on Form U4. If an applicant failed to disclose that
she was involved in an insolvent business that filed for bankruptcy, the
,application is false and misleading. The Form U4 is required to be
updated immediately and FINRA could reject the application for having
filed misleading information.
A Treasury bond is quoted 105.04 - 105.24. The purchase price that a
customer would expect to pay would be: - Correct Answer - U.S.
Treasury notes and bonds are quoted in 32nds of a point. When
purchasing the bond, the customer would pay the offering price of
105.24. To convert 105.24 into a dollar price:
Step 1: 105.24 is equal to 105 24/32
Step 2: convert 24/32 into a decimal, which is .75
Step 3: convert 105.75% into a dollar price (105.75% x $1,000 = 1.0575
x $1,000 = $1,057.50)
All of the following persons are permitted to be named as a trusted
contact person for a senior investor, EXCEPT: - Correct Answer - To
be a trusted contact person for a senior investor, the only requirements
are that the person must be a natural person (not a law firm) and be at
least 18 years old.
Which of the following choices would NOT be subject to the holding
period restriction under Rule 144? - Correct Answer - There is a
required holding period of six months for all restricted stock. Restricted
,stock is unregistered stock that was acquired as a result of a private
placement. There is no required holding period for control stock.
However, if an affiliate (control person) acquires stock as a result of a
private placement, this stock would be considered restricted stock rather
than control stock and would be subject to the holding period. Control
stock acquired as a result of an open-market purchase is exempt from
the holding period.
A corporation will be paying a cash dividend to its shareholders. On what
date will the market price of the stock be reduced? - Correct Answer -
The ex-date is the first day that a stock trades without its dividend
included in its price. On the ex-date, the stock's price is reduced by the
amount of (or enough to cover) the dividend. (13260)
Which of the following statements is TRUE concerning electronic
communication networks (ECNs)? - Correct Answer - Electronic
communication networks (ECNs) are securities trading systems that are
designed to anonymously match buyers with sellers. These systems can
be used by both institutional and retail investors. One of the benefits of
their use is immediate automatic execution if a matching buy or sell
order can be found on the system. ECNs do not allow investors to trade
directly with one another; however, they do allow subscribers (e.g.,
broker-dealers) to use these systems to execute orders that they receive
from their clients.
When discussing the purchase of a variable annuity with a client, the RR
is not required to disclose: - Correct Answer - Probate fees and costs
, are associated with establishing the validity of a will, which is not a
disclosure item for annuities. However, surrender, mortality, and
administrative fees must be disclosed. (17541)
An investor purchases a 20-year 5.30% bond at par value that will yield
5.75% if called at the first call date in five years. The yield to maturity on
the bond is: - Correct Answer - The bond has a coupon rate (nominal
yield) of 5.30%. If the bond is purchased at its par value and is not
called, but held to maturity, the bond's yield will be the same as the
coupon rate, which is 5.30%.
A broker-dealer must establish information barriers between which two
departments? - Correct Answer - Investment banking and trading
If a temporary hold has been placed on an account, it may be extended:
- Correct Answer - If a temporary hold is placed on the account of a
specified adult, it will initially expire 15 business days after it was placed
on the account. The temporary hold may be extended twice by the firm.
The first extension is 10 business days and the second extension is for
30 additional business days. In all, broker-dealers can place a hold for a
total of 55 business days (15 days initially + 10-day extension + 30-day
extension).
A company's stock has decreased in value as a result of increased costs
associated with impending regulations. This is considered: - Correct
Answer - Political risk is the risk that an investment may lose value due
