1|Page
Securities Industry Essentials (SIE) Exam Prep
Document 2026/2027 ||Verified Exam!!|| FINRA & SEC
Foundations of the Securities Industry ||Verified
Questions with Detailed Rationales
Under Federal Reserve T, a 90-day restriction is imposed
when a customer opens and closes which of the following
positions?
A. The same stock on the same day in a margin account
B. The same stock in different accounts on the same day
C. The same stock in different accounts in the same
household.
D. The same stock in cash account without paying for the
stock - Answer-D
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:
A. a qualified investor.
B. an accredited investor
C. an institutional investor
D. a qualified institutional buyer (QIB) - Answer-B
,2|Page
Direct participation programs (DDPs) provide:
A. liquidity and transparency
B. exposure to non-correlated assets with steady returns
C. market-related correlations with higher average returns
D. investors with direct purchases of stock from public
companies - Answer-B
In which of the following situations is an employee of a
public company permitted to trade upon information
without violating insider trading laws?
A. An independent securities analyst explains to the
employee why the earnings for the company next quarter
could be markedly poorer than expected.
B. The employee's neighbor works for the government and
informs him that the government will award a major
contract to the company next month.
C. The employee's spouse works in the corporate
headquarters and shares with him a conversation
overheard at work regarding possible acquisition targets.
D. A coworker informs the employee of a conversation he
had with the administrative assistant to the company's
,3|Page
general counsel regarding key developments in an
ongoing class action lawsuit. - Answer-A
The computation of dollar prices and accrued interest on
municipal bonds is normally on what calendar basis?
A 30/360
B 30/365
C Actual/360
D Actual/365 - Answer-A
A transaction in which a writer covers a position by
purchasing an option is called:
A. a closing sale
B. a closing purchase
C. an opening sale
D. an opening purchase - Answer-B
At the time of issuance, which of the following securities
normally has the longest period to expiration?
A. rights
B. options
C. warrants
, 4|Page
D. repurchase agreements - Answer-C
Blue-sky laws are regulated by which of the following
entities?
A. SEC
B. MSRB
C. FINRA
D. State securities regulators - Answer-D
The last transaction in XYZ 5.50s was at 102. This bond is
selling at:
A. par
B. a premium
C. a discount
D. asset value - Answer-B
Which of the following outcomes are possible for the writer
of a covered call option?
A. Profit limited and loss limited
B. Profit limited and loss unlimited
C. Profit unlimited and loss limited
Securities Industry Essentials (SIE) Exam Prep
Document 2026/2027 ||Verified Exam!!|| FINRA & SEC
Foundations of the Securities Industry ||Verified
Questions with Detailed Rationales
Under Federal Reserve T, a 90-day restriction is imposed
when a customer opens and closes which of the following
positions?
A. The same stock on the same day in a margin account
B. The same stock in different accounts on the same day
C. The same stock in different accounts in the same
household.
D. The same stock in cash account without paying for the
stock - Answer-D
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:
A. a qualified investor.
B. an accredited investor
C. an institutional investor
D. a qualified institutional buyer (QIB) - Answer-B
,2|Page
Direct participation programs (DDPs) provide:
A. liquidity and transparency
B. exposure to non-correlated assets with steady returns
C. market-related correlations with higher average returns
D. investors with direct purchases of stock from public
companies - Answer-B
In which of the following situations is an employee of a
public company permitted to trade upon information
without violating insider trading laws?
A. An independent securities analyst explains to the
employee why the earnings for the company next quarter
could be markedly poorer than expected.
B. The employee's neighbor works for the government and
informs him that the government will award a major
contract to the company next month.
C. The employee's spouse works in the corporate
headquarters and shares with him a conversation
overheard at work regarding possible acquisition targets.
D. A coworker informs the employee of a conversation he
had with the administrative assistant to the company's
,3|Page
general counsel regarding key developments in an
ongoing class action lawsuit. - Answer-A
The computation of dollar prices and accrued interest on
municipal bonds is normally on what calendar basis?
A 30/360
B 30/365
C Actual/360
D Actual/365 - Answer-A
A transaction in which a writer covers a position by
purchasing an option is called:
A. a closing sale
B. a closing purchase
C. an opening sale
D. an opening purchase - Answer-B
At the time of issuance, which of the following securities
normally has the longest period to expiration?
A. rights
B. options
C. warrants
, 4|Page
D. repurchase agreements - Answer-C
Blue-sky laws are regulated by which of the following
entities?
A. SEC
B. MSRB
C. FINRA
D. State securities regulators - Answer-D
The last transaction in XYZ 5.50s was at 102. This bond is
selling at:
A. par
B. a premium
C. a discount
D. asset value - Answer-B
Which of the following outcomes are possible for the writer
of a covered call option?
A. Profit limited and loss limited
B. Profit limited and loss unlimited
C. Profit unlimited and loss limited
