Securities Industry Essentials (SIE) Exam by FINRA New
Version with All Questions from Actual Exam, 100%
Correct Answers and Rationales
The redemption value of an open-ended investment company's shares is based on the: -
answers -Net assest value computed afdter the order is recieved
An associated person who is not a registered representative is permitted to engage in which of
the following activities? - answers -Provide account opening forms to a new customer
A decline in the gross domestic product (GDP) must last for at least how many quarters to be
considered a recession? - answers -2 quarters
When is interest on Treasury notes paid? - answers -Semiannually
Which of the following communications with the public is considered misleading? - answers -
Literature providing 10-year performance information to support predictions of future
performance
Which of the following stakeholders has first claim priority in a chapter 11 proceeding? -
answers -Secured debt holders
The last transaction in xyz 5.50s 2030 was at 102. This bond is selling at: - answers -A premium
All of the following risks apply to both foreign and domestic debt instruments except: - answers
-Exchange
,Under FINRA rules, which of the following activities by a registered representative require
written notification to her firm? - answers -Driving part time for a transportation network
company on weekends
Which of the following investment risks is the greatest risk in a variable life insurance policy? -
answers -Market risk
Which of the following products is adversely impacted if the issuer's credit rating is
downgraded? - answers -Exchange-traded notes (ETNs)
Which of the following forms U4 reportable events results in a statutory disqualification? -
answers -A felony conviction for a driving under the influence (DUI) charge
In the event of a stock split, which of the following parties is required to maintain a record of
the shareholders eligible to receive the additional shares? - answers -Transfer agent
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: - answers -Prohibited as fraudulent and manipulative
At the time of issuance, which of the following securities normally has the longest period to
expiration? - answers -Warrants
The call provision of a bond stipulates which of the following factors? - answers -Call date and
call price
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 will break even when the stock is selling at what price
per share at expiration? - answers -$38
,FinCEN accomplishes its mission to safeguard the financial system from the abuses of financial
crime, including terrorist financing and money laundering, by enforcing: - answers -The Bank
Secrecy Act
Under SEC regulation S-P (consumer privacy), which of the following information must a firm
include in its customer privacy and opt-out notices? - answers -The policies to protect the
security of nonpublic information
In which of the following situations is an employee of a public company permitted to trade upon
information without violating insider trading laws? - answers -An independent securities analyst
explians to the employee why the earnings for the company next quarter could be markedly
poorer than expected
Which of the following statements is true regarding the concept of an annuity contract? -
answers -The kind of annuity selected partlyt determines the payment amounts to the
annuitant.
Blue-sky laws are regulated by which of the following entities? - answers -State-securities
regulators
A registered representative is reviewing the following portfolio:
-30% ABC Energy Company
-30% XYX Health Care Company
-30%d Exchange-traded fund (tracks the S&P 500)
-10% Money market funds
Which of the following risks is inherent in this portfolio? - answers -Nonsystematic
, A married couple who earned income that exceeded $300,000 in each of the prior two years
and reasonably expects the same for the current year is: - answers -An accredited investor
Under a system of statutory voting, a common stockholder has as many votes for each vacancy
on the board of directors as the number of: - answers -Shares owned by the stockholder
Under Federal Reserve Regulation T, a 90 day restriction is imposed when a customer opens and
closes which of the following positions? - answers -The same stock in a cash account without
paying for the stock in full
In the over-the-counter market, the term "spread" referees to the difference between the: -
answers -Bid and asked prices
Direct participation programs (Dpps) provide: - answers -Exposure to non-correlated assets with
steady returns
A savings account at a bank is guaranteed by which of the following entities? - answers -FDIC
No-load mutual funds may have lower expense ratios than load mutual funds for which of the
following reasons? - answers -They are not permitted to charge a 12b-1 fee greater than 25
basis points
Which of the following outcomes are possible for the writer of a covered call option? - answers
-Profit limited and loss limited
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? - answers -Quarterly
Version with All Questions from Actual Exam, 100%
Correct Answers and Rationales
The redemption value of an open-ended investment company's shares is based on the: -
answers -Net assest value computed afdter the order is recieved
An associated person who is not a registered representative is permitted to engage in which of
the following activities? - answers -Provide account opening forms to a new customer
A decline in the gross domestic product (GDP) must last for at least how many quarters to be
considered a recession? - answers -2 quarters
When is interest on Treasury notes paid? - answers -Semiannually
Which of the following communications with the public is considered misleading? - answers -
Literature providing 10-year performance information to support predictions of future
performance
Which of the following stakeholders has first claim priority in a chapter 11 proceeding? -
answers -Secured debt holders
The last transaction in xyz 5.50s 2030 was at 102. This bond is selling at: - answers -A premium
All of the following risks apply to both foreign and domestic debt instruments except: - answers
-Exchange
,Under FINRA rules, which of the following activities by a registered representative require
written notification to her firm? - answers -Driving part time for a transportation network
company on weekends
Which of the following investment risks is the greatest risk in a variable life insurance policy? -
answers -Market risk
Which of the following products is adversely impacted if the issuer's credit rating is
downgraded? - answers -Exchange-traded notes (ETNs)
Which of the following forms U4 reportable events results in a statutory disqualification? -
answers -A felony conviction for a driving under the influence (DUI) charge
In the event of a stock split, which of the following parties is required to maintain a record of
the shareholders eligible to receive the additional shares? - answers -Transfer agent
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: - answers -Prohibited as fraudulent and manipulative
At the time of issuance, which of the following securities normally has the longest period to
expiration? - answers -Warrants
The call provision of a bond stipulates which of the following factors? - answers -Call date and
call price
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 will break even when the stock is selling at what price
per share at expiration? - answers -$38
,FinCEN accomplishes its mission to safeguard the financial system from the abuses of financial
crime, including terrorist financing and money laundering, by enforcing: - answers -The Bank
Secrecy Act
Under SEC regulation S-P (consumer privacy), which of the following information must a firm
include in its customer privacy and opt-out notices? - answers -The policies to protect the
security of nonpublic information
In which of the following situations is an employee of a public company permitted to trade upon
information without violating insider trading laws? - answers -An independent securities analyst
explians to the employee why the earnings for the company next quarter could be markedly
poorer than expected
Which of the following statements is true regarding the concept of an annuity contract? -
answers -The kind of annuity selected partlyt determines the payment amounts to the
annuitant.
Blue-sky laws are regulated by which of the following entities? - answers -State-securities
regulators
A registered representative is reviewing the following portfolio:
-30% ABC Energy Company
-30% XYX Health Care Company
-30%d Exchange-traded fund (tracks the S&P 500)
-10% Money market funds
Which of the following risks is inherent in this portfolio? - answers -Nonsystematic
, A married couple who earned income that exceeded $300,000 in each of the prior two years
and reasonably expects the same for the current year is: - answers -An accredited investor
Under a system of statutory voting, a common stockholder has as many votes for each vacancy
on the board of directors as the number of: - answers -Shares owned by the stockholder
Under Federal Reserve Regulation T, a 90 day restriction is imposed when a customer opens and
closes which of the following positions? - answers -The same stock in a cash account without
paying for the stock in full
In the over-the-counter market, the term "spread" referees to the difference between the: -
answers -Bid and asked prices
Direct participation programs (Dpps) provide: - answers -Exposure to non-correlated assets with
steady returns
A savings account at a bank is guaranteed by which of the following entities? - answers -FDIC
No-load mutual funds may have lower expense ratios than load mutual funds for which of the
following reasons? - answers -They are not permitted to charge a 12b-1 fee greater than 25
basis points
Which of the following outcomes are possible for the writer of a covered call option? - answers
-Profit limited and loss limited
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? - answers -Quarterly
