FINRA SIE LATEST 2026 EXAM QUESTIONS AND
SOLUTIONS RATED A+
✔✔A currency transaction report is a report that US financial institutions are required to
file with - ✔✔FinCEN
(Financial Crime Exchange Network)
✔✔Investment advisors that have custody of client assets or require prepayment of
advisory fees _______ or more in advance, and in excess of ______ for each client,
must file an audited balance sheet with the SEC as of the end of the investment
adviser's fiscal year - ✔✔6 months; $500
✔✔The three categories of firm communications that are defined and regulated by
FINRA Rule 2210 are - ✔✔Correspondence
Institutional communication
Retail communication
✔✔The right to demand the repayment of monies paid if there has been a bad delivery
of a stock or security is called - ✔✔Reclamation
✔✔An advertisement used by register investment companies that advise readers to
obtain a full prospectus is called ________
It is not permitted to include an application to invest, and it must contain specific caveats
pursuant to SEC Rule 482 - ✔✔Omitting prospectus
✔✔A note issued in which the government borrows money to finance a project and then
repays lenders with revenue generated by the same project is called - ✔✔RAN
(Revenue Anticipation Note)
✔✔A type of public offering auction in which the price of the offering is set after taking in
all bids to determine the highest price at which the total offering can be sold is called the
- ✔✔Dutch Auction
✔✔In addition to the federal securities laws, each state has its own set of securities
laws, commonly referred to as ______, which are designed to protect investors against
fraudulent sales practices and activities - ✔✔Blue Sky Laws
✔✔What passes capital gains, dividends, and interest earned on fund investments
directly to shareholders so that it is taxed only at the personal level, and double taxation
is avoided? - ✔✔Regulated investment company
✔✔In any single life private annuity transaction, if the seller outlives his or her actuarial
life expectancy, the purchaser will have paid _______ for the property. If the seller does
, not outlive his or her actuarial life expectancy, the _________ will have made a good
financial deal. - ✔✔too much; purchaser
✔✔How is the net asset value (NAV) of a mutual fund calculated? - ✔✔NAV=(Total
value of investment - liabilities) / shares outstanding
✔✔The statement of cash flows is separated into what categories? - ✔✔cash flow from
financing activities
cash flow from investing activities
cash flow from operating activities
✔✔Common stock is referred to as _______ because the owner of the stock is also an
owner of the corporation and may participate in its capital and income growth -
✔✔equity
✔✔What is considered a hybrid security? - ✔✔Preferred stock
(it has both common stock and fixed-income investments)
✔✔What occurs when the supply of goods and services exceeds their demand? -
✔✔deflation
✔✔An IRA must be created and funded by ________ of the calendar year following the
year in which the contribution applies. - ✔✔April 15
✔✔What calculates the required amount of an employer's annual contribution to a
defined benefit plan to ensure that current and future plan benefits are available to the
participants? - ✔✔Actuary
✔✔The Bank Secrecy Act of 1970 requires financial institutions to assist US
government agencies in detecting and preventing money laundering by filing reports of
cash transactions exceeding what daily amount? - ✔✔$10,000
✔✔A fixed income security is subject to what risks? - ✔✔Exchange rate risk
purchasing power risk
default risk
liquidity risk
reinvestment risk
✔✔Diversification smooths price volatility, historical above-inflation return, can preserve
purchasing power in a portfolio - ✔✔Mutual Fund
✔✔Liquid, easily converted to cash, low default risk, low real return - ✔✔Money market
fund
SOLUTIONS RATED A+
✔✔A currency transaction report is a report that US financial institutions are required to
file with - ✔✔FinCEN
(Financial Crime Exchange Network)
✔✔Investment advisors that have custody of client assets or require prepayment of
advisory fees _______ or more in advance, and in excess of ______ for each client,
must file an audited balance sheet with the SEC as of the end of the investment
adviser's fiscal year - ✔✔6 months; $500
✔✔The three categories of firm communications that are defined and regulated by
FINRA Rule 2210 are - ✔✔Correspondence
Institutional communication
Retail communication
✔✔The right to demand the repayment of monies paid if there has been a bad delivery
of a stock or security is called - ✔✔Reclamation
✔✔An advertisement used by register investment companies that advise readers to
obtain a full prospectus is called ________
It is not permitted to include an application to invest, and it must contain specific caveats
pursuant to SEC Rule 482 - ✔✔Omitting prospectus
✔✔A note issued in which the government borrows money to finance a project and then
repays lenders with revenue generated by the same project is called - ✔✔RAN
(Revenue Anticipation Note)
✔✔A type of public offering auction in which the price of the offering is set after taking in
all bids to determine the highest price at which the total offering can be sold is called the
- ✔✔Dutch Auction
✔✔In addition to the federal securities laws, each state has its own set of securities
laws, commonly referred to as ______, which are designed to protect investors against
fraudulent sales practices and activities - ✔✔Blue Sky Laws
✔✔What passes capital gains, dividends, and interest earned on fund investments
directly to shareholders so that it is taxed only at the personal level, and double taxation
is avoided? - ✔✔Regulated investment company
✔✔In any single life private annuity transaction, if the seller outlives his or her actuarial
life expectancy, the purchaser will have paid _______ for the property. If the seller does
, not outlive his or her actuarial life expectancy, the _________ will have made a good
financial deal. - ✔✔too much; purchaser
✔✔How is the net asset value (NAV) of a mutual fund calculated? - ✔✔NAV=(Total
value of investment - liabilities) / shares outstanding
✔✔The statement of cash flows is separated into what categories? - ✔✔cash flow from
financing activities
cash flow from investing activities
cash flow from operating activities
✔✔Common stock is referred to as _______ because the owner of the stock is also an
owner of the corporation and may participate in its capital and income growth -
✔✔equity
✔✔What is considered a hybrid security? - ✔✔Preferred stock
(it has both common stock and fixed-income investments)
✔✔What occurs when the supply of goods and services exceeds their demand? -
✔✔deflation
✔✔An IRA must be created and funded by ________ of the calendar year following the
year in which the contribution applies. - ✔✔April 15
✔✔What calculates the required amount of an employer's annual contribution to a
defined benefit plan to ensure that current and future plan benefits are available to the
participants? - ✔✔Actuary
✔✔The Bank Secrecy Act of 1970 requires financial institutions to assist US
government agencies in detecting and preventing money laundering by filing reports of
cash transactions exceeding what daily amount? - ✔✔$10,000
✔✔A fixed income security is subject to what risks? - ✔✔Exchange rate risk
purchasing power risk
default risk
liquidity risk
reinvestment risk
✔✔Diversification smooths price volatility, historical above-inflation return, can preserve
purchasing power in a portfolio - ✔✔Mutual Fund
✔✔Liquid, easily converted to cash, low default risk, low real return - ✔✔Money market
fund
