FINRA SIE Practice Test

Upon Expiration, all in-the-money S&P 100 Index call options are settled by the delivery of which of the following? - Answer Cash Which of the following statements is true about treasury stock? - Answer It is issued stock that has been subsequently reacquired by the corporation In the event of a stock split, which of the following parties is required to maintain a record of the shareholders eligible to receive the additional shares? - Answer Transfer Agent Which of the following actions is required of a broker-dealer's anti-money laundering (AML) program? - Answer Designating an AML compliance officer A registered representative (RR) wants to participate in a private securities transaction. Which of the following actions must the RR take? - Answer Send written notice to his supervisor outlining the activity and compensation structure A customer BUYS a 1 ABC Jan 35 PUT for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling at what price per share at expiration? - Answer $38 The call provision of a bond stipulates which of the following factors? - Answer Call date and call price When is interest on Treasury notes paid? - Answer Semiannually The owner of which of the following products is MOST exposed to inflationary risk? - Answer Treasury bonds (because it's long-term) A registered representative (RR) who wants to place a mutual fund advertisement must obtain written approval from which of the following parties? - Answer A registered principal of the RR's firm A company announces a tender offer to its shareholders with the intent to buy a maximum of 1 million shares of its outstanding stock at $10 per share and sets no minimum number of shares to be purchased. An investor wants to participate in this offer and tenders his 1,000 share position. At the close of the offer period, only 900,000 shares have been tendered. How many, if any, of the investor's shares will the company purchase? - Answer 1,000 (1,000 x 100 = 100,000 shares; 1 million - 900k = 100k) Broker-dealer ABC seeks to underwrite a municipal securities offering by a local town in which the mayor is currently seeking re-election. A municipal finance professional who resides in the town and works for ABC contributed $200 t