ANDREW, FINRA SIE EXAM 2024 -
PERSONAL STUDY SET(100% Correct)
An investor owns 100 shares of XYZ common stock at the current market price of $50 per share. If
XYZ conducts a 1-for-2 reverse stock split, the investor's post-split stock position will be: - ANSWER50
shares at $100 per share
Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and
closes which of the following positions? - ANSWERThe same stock in a cash account without paying
for the stock in full.
Under industry regulations, an initial purchase of $3,000 of common stock in a margin account
requires a cash deposit of: - ANSWER$2,000
Upon expiration, all in-the-money S&P 100 Index call options are settled by the delivery of which of
the following? - ANSWERCash
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? - ANSWERTransfer agent
Which of the following statements is true regarding a customer account held as tenants in common?
- ANSWERThe ownership of the decedent's assets is governed by their will or state law.
An associated person who is not a registered representative is permitted to engage in which of the
following activities? - ANSWERProvide account opening forms to a new customer.
Under Rule 144A, an issuer of restricted stock is permitted to sell to which of the following investors?
- ANSWERQualified institutional buyers (QIBs)
The last transaction in XYZ 5.50s 2030 was at 102. This bond is selling at: - ANSWERa premium
Which of the following represents the effect of a stock split?The price per share of common stock
decreases - ANSWERThe price per share of common stock decreases.
To offer its shareholders a privilege to obtain its shares at a fixed price, which of the following
products does a corporation issue? - ANSWERRights
In a period of low inflation and economic recession, the Federal Reserve is expected to take which of
the following actions? - ANSWERBuy bonds in the open market.
Which of the following communications with the public is considered misleading? -
ANSWERLiterature providing 10-year performance information to support predictions of future
performance.
Which of the following statements is true regarding the concept of an annuity contract? -
ANSWERThe kind of annuity selected partly determines the payment amounts to the annuitant.
Which of the following outcomes are possible for the writer of a cover call option? - ANSWERProfit
limited and loss limited.
,Which of the following actions is required when a firm receives cash in excess of $10,000 from one
customer in one business day? - ANSWERFile a Currency Transaction Report (CTR)
Which of the following responses describes an advantage of index funds? - ANSWERLower
management fees due to passive management of the fund.
Roth 401(k) and Roth individual retirement account (IRA) plans share which of the following
features? - ANSWERQualified distributions are excluded from federal income tax
UTMA accounts are opened under the tax ID of the: - ANSWERminor
A registered representative is reviewing the following portfolio:
• 30% ABC Energy Company
• 30% XYZ Health Care Company
• 30% Exchange-traded fund (tracks the S&P 500)
• 10% Money market funds
Which of the following risks is inherent in this portfolio? - ANSWERNonsystematic
Under a system of statutory voting, a common stockholder has as many votes for each vacancy on
the board of directors as the number of: - ANSWERshares owned by the stockholder
The owner of which of the following products is most exposed to inflationary risk? -
ANSWERTreasury bonds
A customer has a cash balance in her account together with long positions in several securities. She
has made no securities transactions in the account during the past 18 months. How often must the
firm send her an account statement? - ANSWERQuarterly
At issue, which of the following debt securities mature in one year or less? - ANSWERMoney market
instruments
Call protection is most valuable to a bond owner when bond prices are generally: - ANSWERRising
If a market maker posts a quote of 10.00 - 10.10 [25×10], which of the following actions is the market
maker willing to take? - ANSWERBuy 2,500 shares at $10.00 and sell 1,000 shares at $10.10 ; In this
scenario, the market maker is quoting a bid-ask spread of 10.00 - 10.10 with a size of 25x10,
Consequently, the market maker is prepared to purchase 2,500 shares at $10 per share and sell 1,000
shares at $10.10 per share
Which of the following security types provides investors with a stated maturity date, a floating
interest rate, and an option to put the security back to a financial intermediary on a daily or weekly
basis? - ANSWERVariable rate demand note
Regular way settlement on Treasury bonds is: - ANSWERnext business day
Under FINRA rules, noncash compensation connected with the sale of variable contracts includes all
of the following items except: - ANSWERcommissions
, A firm is a participant in a public offering. To sell a substantial amount of the securities to its
customers, the firm agrees to repurchase the shares at no less than the original sales price. Such
agreements are: - ANSWERprohibited as fraudulent and manipulative
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? - ANSWER1,000
Direct participation programs (DPPs) provide: - ANSWERexposure to non-correlated assets
What are non-correlated assets? - ANSWERIn simple terms, assets that move in the same direction at
the same time have positive correlation, while assets that move in opposite directions have negative
correlation. Non-correlated assets are those that move independently of each other, with a
correlation of 0.
When selling a fixed amount of a base currency to purchase a counter currency, which of the
following factors is primarily used to determine how much of the counter currency the customer will
receive? - ANSWERThe spot exchange rate
Which of the following comparisons best describes the essential difference between a primary
distribution and a secondary distribution? - ANSWERA primary distribution involves a sale of newly
issued shares by the issuer while a secondary distribution involves the sale of already issued and
outstanding shares.
Which of the following statements is true about all U.S. government agency issues? - ANSWERThey
are exempt from registration under the Securities Act of 1933
No-load mutual funds may have lower expense ratios than load mutual funds for which of the
following reasons? - ANSWERNo-load funds are not permitted to charge a 12b-1 fee greater than 25
basis points
Which of the following actions violates FINRA rules regarding selling away? - ANSWEREngaging in
private securities transactions without written prior consent of the employing BD
A decline in the gross domestic product (GDP) must last for at least how many quarters to be
considered a recession? - ANSWER2 quarters
Which of the following considerations should a registered representative explain to a customer when
recommending a 529 savings plan? - ANSWER
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: - ANSWERan accredited investor
When a broker-dealer charges a commission on a securities transaction, it has acted as: - ANSWERan
agent
Which of the following products is adversely impacted if the issuer's credit rating is downgraded? -
ANSWERExchange-traded notes (ETNS)
Which of the following investment risks is the greatest risk in a variable life insurance policy? -
ANSWERMarket risk
PERSONAL STUDY SET(100% Correct)
An investor owns 100 shares of XYZ common stock at the current market price of $50 per share. If
XYZ conducts a 1-for-2 reverse stock split, the investor's post-split stock position will be: - ANSWER50
shares at $100 per share
Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and
closes which of the following positions? - ANSWERThe same stock in a cash account without paying
for the stock in full.
Under industry regulations, an initial purchase of $3,000 of common stock in a margin account
requires a cash deposit of: - ANSWER$2,000
Upon expiration, all in-the-money S&P 100 Index call options are settled by the delivery of which of
the following? - ANSWERCash
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? - ANSWERTransfer agent
Which of the following statements is true regarding a customer account held as tenants in common?
- ANSWERThe ownership of the decedent's assets is governed by their will or state law.
An associated person who is not a registered representative is permitted to engage in which of the
following activities? - ANSWERProvide account opening forms to a new customer.
Under Rule 144A, an issuer of restricted stock is permitted to sell to which of the following investors?
- ANSWERQualified institutional buyers (QIBs)
The last transaction in XYZ 5.50s 2030 was at 102. This bond is selling at: - ANSWERa premium
Which of the following represents the effect of a stock split?The price per share of common stock
decreases - ANSWERThe price per share of common stock decreases.
To offer its shareholders a privilege to obtain its shares at a fixed price, which of the following
products does a corporation issue? - ANSWERRights
In a period of low inflation and economic recession, the Federal Reserve is expected to take which of
the following actions? - ANSWERBuy bonds in the open market.
Which of the following communications with the public is considered misleading? -
ANSWERLiterature providing 10-year performance information to support predictions of future
performance.
Which of the following statements is true regarding the concept of an annuity contract? -
ANSWERThe kind of annuity selected partly determines the payment amounts to the annuitant.
Which of the following outcomes are possible for the writer of a cover call option? - ANSWERProfit
limited and loss limited.
,Which of the following actions is required when a firm receives cash in excess of $10,000 from one
customer in one business day? - ANSWERFile a Currency Transaction Report (CTR)
Which of the following responses describes an advantage of index funds? - ANSWERLower
management fees due to passive management of the fund.
Roth 401(k) and Roth individual retirement account (IRA) plans share which of the following
features? - ANSWERQualified distributions are excluded from federal income tax
UTMA accounts are opened under the tax ID of the: - ANSWERminor
A registered representative is reviewing the following portfolio:
• 30% ABC Energy Company
• 30% XYZ Health Care Company
• 30% Exchange-traded fund (tracks the S&P 500)
• 10% Money market funds
Which of the following risks is inherent in this portfolio? - ANSWERNonsystematic
Under a system of statutory voting, a common stockholder has as many votes for each vacancy on
the board of directors as the number of: - ANSWERshares owned by the stockholder
The owner of which of the following products is most exposed to inflationary risk? -
ANSWERTreasury bonds
A customer has a cash balance in her account together with long positions in several securities. She
has made no securities transactions in the account during the past 18 months. How often must the
firm send her an account statement? - ANSWERQuarterly
At issue, which of the following debt securities mature in one year or less? - ANSWERMoney market
instruments
Call protection is most valuable to a bond owner when bond prices are generally: - ANSWERRising
If a market maker posts a quote of 10.00 - 10.10 [25×10], which of the following actions is the market
maker willing to take? - ANSWERBuy 2,500 shares at $10.00 and sell 1,000 shares at $10.10 ; In this
scenario, the market maker is quoting a bid-ask spread of 10.00 - 10.10 with a size of 25x10,
Consequently, the market maker is prepared to purchase 2,500 shares at $10 per share and sell 1,000
shares at $10.10 per share
Which of the following security types provides investors with a stated maturity date, a floating
interest rate, and an option to put the security back to a financial intermediary on a daily or weekly
basis? - ANSWERVariable rate demand note
Regular way settlement on Treasury bonds is: - ANSWERnext business day
Under FINRA rules, noncash compensation connected with the sale of variable contracts includes all
of the following items except: - ANSWERcommissions
, A firm is a participant in a public offering. To sell a substantial amount of the securities to its
customers, the firm agrees to repurchase the shares at no less than the original sales price. Such
agreements are: - ANSWERprohibited as fraudulent and manipulative
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? - ANSWER1,000
Direct participation programs (DPPs) provide: - ANSWERexposure to non-correlated assets
What are non-correlated assets? - ANSWERIn simple terms, assets that move in the same direction at
the same time have positive correlation, while assets that move in opposite directions have negative
correlation. Non-correlated assets are those that move independently of each other, with a
correlation of 0.
When selling a fixed amount of a base currency to purchase a counter currency, which of the
following factors is primarily used to determine how much of the counter currency the customer will
receive? - ANSWERThe spot exchange rate
Which of the following comparisons best describes the essential difference between a primary
distribution and a secondary distribution? - ANSWERA primary distribution involves a sale of newly
issued shares by the issuer while a secondary distribution involves the sale of already issued and
outstanding shares.
Which of the following statements is true about all U.S. government agency issues? - ANSWERThey
are exempt from registration under the Securities Act of 1933
No-load mutual funds may have lower expense ratios than load mutual funds for which of the
following reasons? - ANSWERNo-load funds are not permitted to charge a 12b-1 fee greater than 25
basis points
Which of the following actions violates FINRA rules regarding selling away? - ANSWEREngaging in
private securities transactions without written prior consent of the employing BD
A decline in the gross domestic product (GDP) must last for at least how many quarters to be
considered a recession? - ANSWER2 quarters
Which of the following considerations should a registered representative explain to a customer when
recommending a 529 savings plan? - ANSWER
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: - ANSWERan accredited investor
When a broker-dealer charges a commission on a securities transaction, it has acted as: - ANSWERan
agent
Which of the following products is adversely impacted if the issuer's credit rating is downgraded? -
ANSWERExchange-traded notes (ETNS)
Which of the following investment risks is the greatest risk in a variable life insurance policy? -
ANSWERMarket risk
