FINRA SIE TEST FINAL 2025 EXAM AND PRACTICE EXAM
QUESTIONS COMPLETE QUESTIONS WITH DETAILED VERIFIED
ANSWERS (100% CORRECT ANSWERS) / GRADED A+.
FINRA SIE.
Your client, Sophia, retired from her job five years ago and placed all of the proceeds
of her 401(k) distribution into a rollover IRA at a local bank. If Sophia wishes to
transfer the funds to an IRA at your broker-dealer, which of the following statements
would be true? - - ANS - -A) There is no limit to the number of transfers per year
between custodians.
B) A transfer of this type is not permitted.
C) Mandatory tax withholding applies to trustee-to-trustee transfers.
D) A transfer of this type will incur a 10% penalty.
Put buyers are - - ANS - -A) both bullish and bearish.
B) bearish.
C) neither bullish nor bearish.
D) bullish.
A company that has issued noncumulative preferred stock - - ANS - -A) pays the
preferred dividend before paying the interest due on its outstanding bonds.
B) pays current preferred dividends before paying dividends on common stock.
,C) pays in arrears and current dividends on the preferred before paying a dividend on
the common.
D) forces conversion of the preferred that is trading at a discount to par, thereby
eliminating the need to pay past-due dividends.
When a broker-dealer pledges customer securities to a bank as collateral for a
margin loan, the pledge is known as - - ANS - -A) credit agreement.
B) loan consent.
C) rehypothecation.
D) hypothecation.
One of the Financial Industry Regulatory Authority (FINRA) Conduct Rules is
concerned with private securities transactions. Under that rule, it would be correct to
state that
I. if the member approves the registered representative participating in a transaction
for compensation, it must treat the transaction as if it is being done on its own behalf
by entering the transaction on its own books and supervising the associated person
during the transaction.
II. as long as no compensation to the registered representative is involved,
notification to the member is not required.
III. sale of a securities product to the registered representative's mother where there
is only nominal compensation is not covered under the rule.
,IV. if the member disapproves of the registered representative's participation in a
transaction for compensation, the associated person may not participate in it. - - ANS
- -A) I and II
B) II and III
C) III and IV
D) I and IV
For nonexempt securities being offered to the public for the first time by a corporate
issuer, which of the following would be applicable? - - ANS - -A) Securities Act of
1934 regulating issues that must be offered by prospectus
B) Securities Act of 1934 regulating securities that must be offered by prospectus
C) Securities Act of 1933 regulating issues that must be offered by prospectus
D) Securities Act of 1933 regulating securities traded in the secondary market
Which of the following is considered a benefit for broker-dealers offering margin
accounts to their customers? - - ANS - -A) The ability to accommodate more
conservative clients
B) The additional income generated from the payment of margin interest
C) The ability to pledge customer securities for loans
D) The additional employment of operational personnel to administer the accounts
In a reverse split, what happens to the cost basis and number of shares?
I. The cost basis goes up
II. The number of shares goes down
III. The cost basis goes down
, IV. The number of shares goes up - - ANS - -A) I and IV
B) III and IV
C) II and III
D) I and II
Which of the following issues only common stock? - - ANS - -A) Closed-end funds
B) Municipalities
C) Corporations
D) Mutual funds
For the risk disclosures found in the margin agreement, all of the following would be
accurate disclosures except - - ANS - -A) customers can lose more money than
initially deposited.
B) firms can increase their in-house margin requirements without advance notice.
C) if a maintenance call is not met, the customer must direct which securities to sell.
D) customers are not entitled to an extension of time to meet a margin call.
In a defined contribution plan
I. the benefit amount is fixed.
II. the benefit amount is variable.
III. the contribution amount is fixed.
IV. the contribution amount can vary. - - ANS - -A) I and IV
B) II and III
QUESTIONS COMPLETE QUESTIONS WITH DETAILED VERIFIED
ANSWERS (100% CORRECT ANSWERS) / GRADED A+.
FINRA SIE.
Your client, Sophia, retired from her job five years ago and placed all of the proceeds
of her 401(k) distribution into a rollover IRA at a local bank. If Sophia wishes to
transfer the funds to an IRA at your broker-dealer, which of the following statements
would be true? - - ANS - -A) There is no limit to the number of transfers per year
between custodians.
B) A transfer of this type is not permitted.
C) Mandatory tax withholding applies to trustee-to-trustee transfers.
D) A transfer of this type will incur a 10% penalty.
Put buyers are - - ANS - -A) both bullish and bearish.
B) bearish.
C) neither bullish nor bearish.
D) bullish.
A company that has issued noncumulative preferred stock - - ANS - -A) pays the
preferred dividend before paying the interest due on its outstanding bonds.
B) pays current preferred dividends before paying dividends on common stock.
,C) pays in arrears and current dividends on the preferred before paying a dividend on
the common.
D) forces conversion of the preferred that is trading at a discount to par, thereby
eliminating the need to pay past-due dividends.
When a broker-dealer pledges customer securities to a bank as collateral for a
margin loan, the pledge is known as - - ANS - -A) credit agreement.
B) loan consent.
C) rehypothecation.
D) hypothecation.
One of the Financial Industry Regulatory Authority (FINRA) Conduct Rules is
concerned with private securities transactions. Under that rule, it would be correct to
state that
I. if the member approves the registered representative participating in a transaction
for compensation, it must treat the transaction as if it is being done on its own behalf
by entering the transaction on its own books and supervising the associated person
during the transaction.
II. as long as no compensation to the registered representative is involved,
notification to the member is not required.
III. sale of a securities product to the registered representative's mother where there
is only nominal compensation is not covered under the rule.
,IV. if the member disapproves of the registered representative's participation in a
transaction for compensation, the associated person may not participate in it. - - ANS
- -A) I and II
B) II and III
C) III and IV
D) I and IV
For nonexempt securities being offered to the public for the first time by a corporate
issuer, which of the following would be applicable? - - ANS - -A) Securities Act of
1934 regulating issues that must be offered by prospectus
B) Securities Act of 1934 regulating securities that must be offered by prospectus
C) Securities Act of 1933 regulating issues that must be offered by prospectus
D) Securities Act of 1933 regulating securities traded in the secondary market
Which of the following is considered a benefit for broker-dealers offering margin
accounts to their customers? - - ANS - -A) The ability to accommodate more
conservative clients
B) The additional income generated from the payment of margin interest
C) The ability to pledge customer securities for loans
D) The additional employment of operational personnel to administer the accounts
In a reverse split, what happens to the cost basis and number of shares?
I. The cost basis goes up
II. The number of shares goes down
III. The cost basis goes down
, IV. The number of shares goes up - - ANS - -A) I and IV
B) III and IV
C) II and III
D) I and II
Which of the following issues only common stock? - - ANS - -A) Closed-end funds
B) Municipalities
C) Corporations
D) Mutual funds
For the risk disclosures found in the margin agreement, all of the following would be
accurate disclosures except - - ANS - -A) customers can lose more money than
initially deposited.
B) firms can increase their in-house margin requirements without advance notice.
C) if a maintenance call is not met, the customer must direct which securities to sell.
D) customers are not entitled to an extension of time to meet a margin call.
In a defined contribution plan
I. the benefit amount is fixed.
II. the benefit amount is variable.
III. the contribution amount is fixed.
IV. the contribution amount can vary. - - ANS - -A) I and IV
B) II and III
