1
ULTIMATE FINRA SECURITIES INDUSTRY
ESSENTIALS (SIE) EXAM — 100 QUESTIONS
WITH ANSWERS 2026-28 ACTUAL VERSION
SECTION A — Capital Markets & Economic Concepts (Q1–25)
1. Which of the following best describes a primary market?
A. Trades between investors
B. Issuance of new securities to the public
C. Secondary exchange of stock
D. Bond redemption at maturity
Answer: B
Rationale: The primary market issues new securities, providing
capital to issuers.
2. The secondary market refers to:
A. Buying newly issued IPOs
B. Trading previously issued securities among investors
C. Bank loan markets
D. Municipal debt issuance
Answer: B
Rationale: Secondary markets allow investor-to-investor
trading.
3. Which factor directly affects bond prices?
A. Dividend history
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B. Market interest rates
C. Company logo
D. Color of certificate
Answer: B
Rationale: Interest rate changes inversely affect bond prices.
4. What does the bid price indicate?
A. Price a buyer is willing to pay
B. Price a seller wants
C. Dividend amount
D. Coupon rate
Answer: A
Rationale: The bid represents the buy-side offer.
5. The ask price is:
A. Buy offer
B. Sell offer
C. Fixed for all stocks
D. Dividend rate
Answer: B
Rationale: Ask is the seller’s asking price.
6. Market capitalization is:
A. Number of shares × current market price
B. Par value × dividends
C. Bond face value × interest
D. Share count only
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Answer: A
Rationale: Market cap represents the company’s total market
value.
7. Treasury bills are considered:
A. Long-term bonds
B. Short-term, low-risk money market instruments
C. Equity instruments
D. Mutual funds
Answer: B
Rationale: T-bills mature in under one year and are backed by
the U.S. government.
8. Blue-chip stocks are characterized by:
A. Volatility and high risk
B. Stability, consistent dividends, and large market capitalization
C. Only tech sector
D. Government backing
Answer: B
Rationale: Blue-chip companies are financially sound and
established.
9. An IPO is:
A. Sale of previously owned stock
B. Initial public offering to raise capital
C. Bond issuance
D. Corporate dividend
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Answer: B
Rationale: IPO is the first public sale of company stock.
10. Which is a feature of money market securities?
A. High volatility
B. Short maturity, high liquidity
C. Dividend potential
D. Ownership rights
Answer: B
Rationale: Money market instruments provide liquidity and
safety.
11. A broker executes trades as:
A. Principal only
B. Agent or principal
C. SEC officer
D. Margin lender only
Answer: B
Rationale: Brokers can act as agents for clients or principals for
their own account.
12. A dealer differs from a broker because a dealer:
A. Executes only buy orders
B. Trades from inventory as principal
C. Avoids regulatory oversight
D. Works for free
Answer: B
ULTIMATE FINRA SECURITIES INDUSTRY
ESSENTIALS (SIE) EXAM — 100 QUESTIONS
WITH ANSWERS 2026-28 ACTUAL VERSION
SECTION A — Capital Markets & Economic Concepts (Q1–25)
1. Which of the following best describes a primary market?
A. Trades between investors
B. Issuance of new securities to the public
C. Secondary exchange of stock
D. Bond redemption at maturity
Answer: B
Rationale: The primary market issues new securities, providing
capital to issuers.
2. The secondary market refers to:
A. Buying newly issued IPOs
B. Trading previously issued securities among investors
C. Bank loan markets
D. Municipal debt issuance
Answer: B
Rationale: Secondary markets allow investor-to-investor
trading.
3. Which factor directly affects bond prices?
A. Dividend history
,2
B. Market interest rates
C. Company logo
D. Color of certificate
Answer: B
Rationale: Interest rate changes inversely affect bond prices.
4. What does the bid price indicate?
A. Price a buyer is willing to pay
B. Price a seller wants
C. Dividend amount
D. Coupon rate
Answer: A
Rationale: The bid represents the buy-side offer.
5. The ask price is:
A. Buy offer
B. Sell offer
C. Fixed for all stocks
D. Dividend rate
Answer: B
Rationale: Ask is the seller’s asking price.
6. Market capitalization is:
A. Number of shares × current market price
B. Par value × dividends
C. Bond face value × interest
D. Share count only
,3
Answer: A
Rationale: Market cap represents the company’s total market
value.
7. Treasury bills are considered:
A. Long-term bonds
B. Short-term, low-risk money market instruments
C. Equity instruments
D. Mutual funds
Answer: B
Rationale: T-bills mature in under one year and are backed by
the U.S. government.
8. Blue-chip stocks are characterized by:
A. Volatility and high risk
B. Stability, consistent dividends, and large market capitalization
C. Only tech sector
D. Government backing
Answer: B
Rationale: Blue-chip companies are financially sound and
established.
9. An IPO is:
A. Sale of previously owned stock
B. Initial public offering to raise capital
C. Bond issuance
D. Corporate dividend
, 4
Answer: B
Rationale: IPO is the first public sale of company stock.
10. Which is a feature of money market securities?
A. High volatility
B. Short maturity, high liquidity
C. Dividend potential
D. Ownership rights
Answer: B
Rationale: Money market instruments provide liquidity and
safety.
11. A broker executes trades as:
A. Principal only
B. Agent or principal
C. SEC officer
D. Margin lender only
Answer: B
Rationale: Brokers can act as agents for clients or principals for
their own account.
12. A dealer differs from a broker because a dealer:
A. Executes only buy orders
B. Trades from inventory as principal
C. Avoids regulatory oversight
D. Works for free
Answer: B
