FINRA SIE Exam Review 2026 | Verified Q&A | Graded A+
1. An investment that provides investors with a floating rate of interest, a stated
maturity, and the ability to put the security back to an intermediary on a pre-
determined basis is referred to as:
A variable rate demand obligation (VRDO)
A perpetual puttable preferred stock
A tax-deferred non-qualified, variable annuity
A Stock Put Option
2. Which act does FinCEN enforce to combat money laundering and terrorist
financing?
the Investment Company Act of 1940
the Securities Act of 1933
SEC regulations
the Bank Secrecy Act
3. If an investor purchases Treasury Bonds on a Wednesday, when should they
expect the transaction to settle?
second business day
next business day
same day
fifth business day
4. What governs the ownership of a decedent's assets in a tenants in common
account?
, Equal sharing among owners
Their will or state law
Federal regulations
Investment company policies
5. Under statutory voting, stockholders can cast how many votes per share for
each election?
four
one
three
two
6. Describe the significance of the 'spread' in trading within the over-the-
counter market.
The 'spread' measures the volatility of a security's price over time.
The 'spread' is the average price of securities traded over a specific
period.
The 'spread' represents the total value of all trades executed in a day.
The 'spread' indicates the liquidity and transaction costs associated
with buying and selling securities.
7. When Uniform Transfer to Minors Act (UTMA) accounts are opened, they use
the SSN or tax ID of:
A donor
A parent or guardian
The custodian
, The minor
8. Who is responsible for maintaining the records of shareholders during a stock
split?
DTC
Transfer agent
Custodian
Issuer
9. A customer has an account with a discount broker-dealer that specializes in
online trading. If the customer is being charged a commission, the firm is
MOST likely acting in which of the following capacities?
Market marker
Agent
Underwriter
Principal
10. What is a key characteristic of index funds compared to actively managed
funds?
Lower management fees due to passive management of the fund
Higher turnover rates
Guaranteed returns regardless of market conditions
Higher management fees due to active management
11. In a system of statutory voting, the common shareholder has as many votes
for each vacancy on the board of directors as?
The number of shares the board vacated
, Shares owned by the stockholders
The number of directors present at the meeting
The number of proxies available for voting by board
12. Discuss why lower management fees are considered an advantage of index
funds.
Lower management fees are only beneficial in bullish markets.
Lower management fees are considered an advantage of index
funds because they are passively managed, which reduces
operational costs and increases investor returns.
Lower management fees are a result of higher turnover rates.
Lower management fees are irrelevant to investor returns.
13. What is the maximum validity period for a customer's letter of intent on a
mutual fund purchase?
3 months
6 months
24 months
13 months
14. If the customer instead buys the put option for a premium of $4, what would
the new break-even price be at expiration?
$37
$38
$36
$39
1. An investment that provides investors with a floating rate of interest, a stated
maturity, and the ability to put the security back to an intermediary on a pre-
determined basis is referred to as:
A variable rate demand obligation (VRDO)
A perpetual puttable preferred stock
A tax-deferred non-qualified, variable annuity
A Stock Put Option
2. Which act does FinCEN enforce to combat money laundering and terrorist
financing?
the Investment Company Act of 1940
the Securities Act of 1933
SEC regulations
the Bank Secrecy Act
3. If an investor purchases Treasury Bonds on a Wednesday, when should they
expect the transaction to settle?
second business day
next business day
same day
fifth business day
4. What governs the ownership of a decedent's assets in a tenants in common
account?
, Equal sharing among owners
Their will or state law
Federal regulations
Investment company policies
5. Under statutory voting, stockholders can cast how many votes per share for
each election?
four
one
three
two
6. Describe the significance of the 'spread' in trading within the over-the-
counter market.
The 'spread' measures the volatility of a security's price over time.
The 'spread' is the average price of securities traded over a specific
period.
The 'spread' represents the total value of all trades executed in a day.
The 'spread' indicates the liquidity and transaction costs associated
with buying and selling securities.
7. When Uniform Transfer to Minors Act (UTMA) accounts are opened, they use
the SSN or tax ID of:
A donor
A parent or guardian
The custodian
, The minor
8. Who is responsible for maintaining the records of shareholders during a stock
split?
DTC
Transfer agent
Custodian
Issuer
9. A customer has an account with a discount broker-dealer that specializes in
online trading. If the customer is being charged a commission, the firm is
MOST likely acting in which of the following capacities?
Market marker
Agent
Underwriter
Principal
10. What is a key characteristic of index funds compared to actively managed
funds?
Lower management fees due to passive management of the fund
Higher turnover rates
Guaranteed returns regardless of market conditions
Higher management fees due to active management
11. In a system of statutory voting, the common shareholder has as many votes
for each vacancy on the board of directors as?
The number of shares the board vacated
, Shares owned by the stockholders
The number of directors present at the meeting
The number of proxies available for voting by board
12. Discuss why lower management fees are considered an advantage of index
funds.
Lower management fees are only beneficial in bullish markets.
Lower management fees are considered an advantage of index
funds because they are passively managed, which reduces
operational costs and increases investor returns.
Lower management fees are a result of higher turnover rates.
Lower management fees are irrelevant to investor returns.
13. What is the maximum validity period for a customer's letter of intent on a
mutual fund purchase?
3 months
6 months
24 months
13 months
14. If the customer instead buys the put option for a premium of $4, what would
the new break-even price be at expiration?
$37
$38
$36
$39
