SIE PRACTICE EXAM (2026/2027 EDITION)
1. What is the primary purpose of the SIE exam?
A. License portfolio managers
B. Test foundational securities knowledge
C. Certify accountants
D. Approve hedge funds
Answer: B
The SIE exam measures basic knowledge of securities markets and industry concepts.
2. Who regulates broker-dealers?
A. SEC
B. FINRA
C. IRS
D. Federal Reserve
Answer: B
FINRA is the self-regulatory organization overseeing broker-dealers.
3. A stock represents:
A. Debt
B. Ownership
C. Insurance
D. Loan
Answer: B
A stock represents equity ownership in a corporation.
4. Bonds are:
A. Equity
B. Debt securities
C. Derivatives
D. Options
Answer: B
Bonds are debt instruments issued to raise capital.
5. Primary market refers to:
A. Secondary trading
B. New securities issuance
C. Private loans
D. Derivatives trading
Answer: B
The primary market is where securities are first issued.
,6. Broker-dealer acts as:
A. Regulator
B. Intermediary
C. Auditor
D. Insurer
Answer: B
Broker-dealers facilitate securities transactions.
7. Liquidity means:
A. Profit level
B. Ease of converting to cash
C. Tax rate
D. Interest cost
Answer: B
Liquidity measures how quickly an asset can be sold for cash.
8. ETF is a:
A. Loan product
B. Pooled investment
C. Insurance contract
D. Bank deposit
Answer: B
ETFs pool investor money and trade like stocks.
9. Dividend is:
A. Interest payment
B. Profit distribution
C. Loan repayment
D. Tax refund
Answer: B
Dividends are distributions of company earnings to shareholders.
10. Municipal bonds are issued by:
A. Corporations
B. Federal government
C. Local governments
D. Banks
Answer: C
Munis are issued by states and local governments.
, 11. Market risk is:
A. Fraud risk
B. Loss from market movements
C. Credit default
D. Inflation only
Answer: B
Market risk affects the entire market due to price fluctuations.
12. Preferred stock typically offers:
A. Voting rights
B. Fixed dividends
C. No dividends
D. Tax exemption
Answer: B
Preferred stock usually pays fixed dividends.
13. Money market instrument example:
A. Stock
B. T-bill
C. ETF
D. Bond fund
Answer: B
Treasury bills are short-term money market instruments.
14. Prospectus provides:
A. Tax filing
B. Investment disclosure
C. Trading signal
D. Loan terms
Answer: B
A prospectus discloses key investment information.
15. Insider trading is:
A. Legal research
B. Public trading
C. Illegal use of nonpublic info
D. Margin trading
Answer: C
Trading on material nonpublic information is illegal.
16. Bull market means:
A. Falling prices
1. What is the primary purpose of the SIE exam?
A. License portfolio managers
B. Test foundational securities knowledge
C. Certify accountants
D. Approve hedge funds
Answer: B
The SIE exam measures basic knowledge of securities markets and industry concepts.
2. Who regulates broker-dealers?
A. SEC
B. FINRA
C. IRS
D. Federal Reserve
Answer: B
FINRA is the self-regulatory organization overseeing broker-dealers.
3. A stock represents:
A. Debt
B. Ownership
C. Insurance
D. Loan
Answer: B
A stock represents equity ownership in a corporation.
4. Bonds are:
A. Equity
B. Debt securities
C. Derivatives
D. Options
Answer: B
Bonds are debt instruments issued to raise capital.
5. Primary market refers to:
A. Secondary trading
B. New securities issuance
C. Private loans
D. Derivatives trading
Answer: B
The primary market is where securities are first issued.
,6. Broker-dealer acts as:
A. Regulator
B. Intermediary
C. Auditor
D. Insurer
Answer: B
Broker-dealers facilitate securities transactions.
7. Liquidity means:
A. Profit level
B. Ease of converting to cash
C. Tax rate
D. Interest cost
Answer: B
Liquidity measures how quickly an asset can be sold for cash.
8. ETF is a:
A. Loan product
B. Pooled investment
C. Insurance contract
D. Bank deposit
Answer: B
ETFs pool investor money and trade like stocks.
9. Dividend is:
A. Interest payment
B. Profit distribution
C. Loan repayment
D. Tax refund
Answer: B
Dividends are distributions of company earnings to shareholders.
10. Municipal bonds are issued by:
A. Corporations
B. Federal government
C. Local governments
D. Banks
Answer: C
Munis are issued by states and local governments.
, 11. Market risk is:
A. Fraud risk
B. Loss from market movements
C. Credit default
D. Inflation only
Answer: B
Market risk affects the entire market due to price fluctuations.
12. Preferred stock typically offers:
A. Voting rights
B. Fixed dividends
C. No dividends
D. Tax exemption
Answer: B
Preferred stock usually pays fixed dividends.
13. Money market instrument example:
A. Stock
B. T-bill
C. ETF
D. Bond fund
Answer: B
Treasury bills are short-term money market instruments.
14. Prospectus provides:
A. Tax filing
B. Investment disclosure
C. Trading signal
D. Loan terms
Answer: B
A prospectus discloses key investment information.
15. Insider trading is:
A. Legal research
B. Public trading
C. Illegal use of nonpublic info
D. Margin trading
Answer: C
Trading on material nonpublic information is illegal.
16. Bull market means:
A. Falling prices
