Securities Industry Essentials (SIE) Exam by FINRA New
Version with All Questions from Actual Exam, 100%
Correct Answers and Rationales
which of the following communications with the public is considered misleading?
historical illustrations based on factual performance
product comparisons that illustrate material differences
a research report that includes a buy recommendation for a specific security
literature providing a 10-year performance information to support predictions of future performance -
answer : literature providing 10-year performance information to support predictions of future
performance
the primary purpose of a syndicate desk in the context of an equity offering is to:
determine the list of selling shareholders
build an order book and allocate the stock
solicit interest from investors in the stock offering
chaperone company management during the road show - answer : build an order book and allocate the
stock
which of the following represents the effect of a stock split?
the price per share of common stock increases
the price per share of common stock decreases
each stockholder's proportionate ownership decreases
each stockholder's proportionate ownership increases - answer : the price per share of common stock
decreases
,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?
monthly
quarterly
semiannually
annually - answer : quarterly
a customer is an officer of a company that is involved in some significant changes. all of the following
items are examples of corporate affairs that could be considered inside information if the customer
shares them with his registered representative EXCEPT:
pending transactions
declared stock dividend
top management changes
imminent financial liquidity problems - answer : declared stock dividend
when selling a fixed amount of a base currency to purchase a counter currency, which of the following
factors is primarily used to determine how much of the counter currency the customer will receive?
the spot exchange rate
the counter currency's inflation rate
the trade balance between the two countries
the credit rating of the counter currency's government - answer : the spot exchange rate
to offer its shareholders a privilege to obtain its shares at a fixed price, which of the following products
does a corporation issue?
puts
rights
futures
preferred stock - answer : rights
, Company ABC announces a 20% stock dividend for its common shareholders. if a customer holds 1,000
shares at $50, what is the new price and number of shares following the payment of the stock dividend?
800 shares at $62.50
1,000 shares at $41.67
1,200 shares at $41.67
1,200 shares at $50 - answer : 1,200 shares at $41.67
which of the following actions violates FINRA rules regarding selling away?
recommending to a customer the services of another broker-dealer
sharing commissions with another registered representative in the same BD
advising customers to buy mutual funds at amounts just below a discount level
engaging in private securities transactions without written prior consent of the employing BD - answer :
engaging in the private securities transactions without written prior consent of the employing BD
which of the following responses describes an advantage of index funds
the protection of principal during bearish markets
high turnover to take advantage of market opportunities
higher management fees due to active management of the fund
lower management fees due to passive management of the fund - answer : lower management fees due
to passive management of the fund
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:
positions vacant on the board
directors present at the meeting
shares owned by the stockholder
proxies available for voting by the board - answer : shares owned by the stockholder
which of the following security types provides investors with a stated maturity date, a floating interest
rate, and an option to put the security back to a financial intermediary on a daily or weekly basis?
Version with All Questions from Actual Exam, 100%
Correct Answers and Rationales
which of the following communications with the public is considered misleading?
historical illustrations based on factual performance
product comparisons that illustrate material differences
a research report that includes a buy recommendation for a specific security
literature providing a 10-year performance information to support predictions of future performance -
answer : literature providing 10-year performance information to support predictions of future
performance
the primary purpose of a syndicate desk in the context of an equity offering is to:
determine the list of selling shareholders
build an order book and allocate the stock
solicit interest from investors in the stock offering
chaperone company management during the road show - answer : build an order book and allocate the
stock
which of the following represents the effect of a stock split?
the price per share of common stock increases
the price per share of common stock decreases
each stockholder's proportionate ownership decreases
each stockholder's proportionate ownership increases - answer : the price per share of common stock
decreases
,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?
monthly
quarterly
semiannually
annually - answer : quarterly
a customer is an officer of a company that is involved in some significant changes. all of the following
items are examples of corporate affairs that could be considered inside information if the customer
shares them with his registered representative EXCEPT:
pending transactions
declared stock dividend
top management changes
imminent financial liquidity problems - answer : declared stock dividend
when selling a fixed amount of a base currency to purchase a counter currency, which of the following
factors is primarily used to determine how much of the counter currency the customer will receive?
the spot exchange rate
the counter currency's inflation rate
the trade balance between the two countries
the credit rating of the counter currency's government - answer : the spot exchange rate
to offer its shareholders a privilege to obtain its shares at a fixed price, which of the following products
does a corporation issue?
puts
rights
futures
preferred stock - answer : rights
, Company ABC announces a 20% stock dividend for its common shareholders. if a customer holds 1,000
shares at $50, what is the new price and number of shares following the payment of the stock dividend?
800 shares at $62.50
1,000 shares at $41.67
1,200 shares at $41.67
1,200 shares at $50 - answer : 1,200 shares at $41.67
which of the following actions violates FINRA rules regarding selling away?
recommending to a customer the services of another broker-dealer
sharing commissions with another registered representative in the same BD
advising customers to buy mutual funds at amounts just below a discount level
engaging in private securities transactions without written prior consent of the employing BD - answer :
engaging in the private securities transactions without written prior consent of the employing BD
which of the following responses describes an advantage of index funds
the protection of principal during bearish markets
high turnover to take advantage of market opportunities
higher management fees due to active management of the fund
lower management fees due to passive management of the fund - answer : lower management fees due
to passive management of the fund
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:
positions vacant on the board
directors present at the meeting
shares owned by the stockholder
proxies available for voting by the board - answer : shares owned by the stockholder
which of the following security types provides investors with a stated maturity date, a floating interest
rate, and an option to put the security back to a financial intermediary on a daily or weekly basis?
