SIE exam caril 2024 Questions &
Answers 100% Correct!!
What type of risk is unique to a specific industry, business enterprise, or investment type? -
ANSWERNonsystematic risk
Under which of the following circumstances is an investor in a position to acquire stock? -
ANSWERBuy a call, sell a call (The holder of a call has the right to buy stock at the strike price if
exercised. The seller of a put is obligated to buy stock at the strike price if exercised)
Options- a premium - ANSWERthe cost of an option contract, expressed in dollars per share of the
underlying stock
Options- strike price - ANSWERThe price at which the stock will be bought or sold if the contract is
exercised, expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to buy 100 shares right
now. How could the customer use options to profit from an increase in the stock's price? -
ANSWERbuy calls, write puts (both are bullish)
A corporation's offer to current stockholders of the ability to purchase a proportionate number of
new shares at a specific price for a limited time is called a - ANSWERright (they usually expire in 30-
45 days)
American depositary receipts (ADRs) - ANSWERissued by banks, represent a specific number of
shares of a foreign company, and trade and pay dividends in dollars
Which of the following records must be maintained for 6 years? - ANSWERCustomer ledgers
(statements)
While underwriters can assist with preparation and filing, the accuracy and adequacy of these
documents is the responsibility of the - ANSWERIssuing corporation
,What institutions serve as depository and clearing facilities? - ANSWERDepository Trust Company
and National Securities Clearing Corporation (most specifically) then carrying and clearing firms can
act as these as well.
What is a transfer agent? - ANSWER(often a bank) for a corporation is responsible for ensuring that
its securities are issued in the correct owner's name, canceling old and issuing new certificates,
maintaining records of ownership, and handling problems relating to lost, stolen, or destroyed
certificates
What is the function of the clearing corporation? - ANSWERActing as an intermediary in a trade,
examples of these can be a commercial bank, can be a broker-dealer but doesn't have to be
Who is considered a control person (security) - ANSWERthose owned by directors, officers, or
persons (which include corporations, trusts, etc.) who own or control 10% or more of the issuer's
equity securities (an unaffiliated person would have to own 10% or more of the outstanding shares)
What are the two components of Return on Investment? - ANSWERCapital gains and income
To expand the overall economy, we want to - ANSWERbuy securities via open-market operations,
pushing interest rates down
To meet a Regulation T margin call, a customer would have how long? - ANSWERsettlement plus 2
additional business days (or S + 2)
What is A fully disclosed broker-dealer - ANSWERone that introduces its business to a carrying firm to
clear transactions
The regulation enacted by the SEC to protect the privacy of customer information is known as -
ANSWERRegulation S-P
A market maker that does not honor its firm quote is said to be - ANSWER"backing away"
A deficit in the U.S. balance of payments can occur if - ANSWERinterest rates in foreign countries are
higher than U.S. domestic rates and U.S. consumers are purchasing (importing) foreign goods
, The general partner of a limited partnership has responsibility of - ANSWEROrganizing and managing
the partnership, assumes unlimited liability, and is responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to - ANSWERcut taxes (so consumers
have more money to spend) and increase government spending for programs and development (to
create more jobs)
What is the federal funds rate - ANSWERthe rate commercial money center banks charge each other
for an overnight, unsecured loan
The Federal Open Market Committee (FOMC) - ANSWERbuy or sell Treasury securities in the open
market. Purchases add money to the economy, making the money available to lend more plentiful,
and sales take money out of the economy, making money available to lend less plentiful.
Reports of rising inventories generally occur during which period of the business cycle? -
ANSWERContraction, due to a lack of consumer demand
Who is exempt from registering with SIPC? - ANSWERThose who deal exclusively with US
Government securities (i.e.-Treasury bonds), exclusively municipality securities, and in redeemable
investment company securities
Retail investor - ANSWERAn individual who makes investments such as the purchase of securities for
his or her account rather than for an organization
Market maker - ANSWERAny entity, individual or organization, willing to accept the risk of holding a
particular security in its own account to facilitate trading and provide liquidity in that security
When the Federal Reserve Board wants to expand (loosen) the money supply, it will - ANSWERbuy
Treasury securities from banks in the open market
SROs functioning under the SEC include... - ANSWERFINRA, MSRB and CBOE
Mild inflation can - ANSWERencourage growth and stimulate the economy
Discount rate - ANSWERThe rate the FRB charges member banks
Answers 100% Correct!!
What type of risk is unique to a specific industry, business enterprise, or investment type? -
ANSWERNonsystematic risk
Under which of the following circumstances is an investor in a position to acquire stock? -
ANSWERBuy a call, sell a call (The holder of a call has the right to buy stock at the strike price if
exercised. The seller of a put is obligated to buy stock at the strike price if exercised)
Options- a premium - ANSWERthe cost of an option contract, expressed in dollars per share of the
underlying stock
Options- strike price - ANSWERThe price at which the stock will be bought or sold if the contract is
exercised, expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to buy 100 shares right
now. How could the customer use options to profit from an increase in the stock's price? -
ANSWERbuy calls, write puts (both are bullish)
A corporation's offer to current stockholders of the ability to purchase a proportionate number of
new shares at a specific price for a limited time is called a - ANSWERright (they usually expire in 30-
45 days)
American depositary receipts (ADRs) - ANSWERissued by banks, represent a specific number of
shares of a foreign company, and trade and pay dividends in dollars
Which of the following records must be maintained for 6 years? - ANSWERCustomer ledgers
(statements)
While underwriters can assist with preparation and filing, the accuracy and adequacy of these
documents is the responsibility of the - ANSWERIssuing corporation
,What institutions serve as depository and clearing facilities? - ANSWERDepository Trust Company
and National Securities Clearing Corporation (most specifically) then carrying and clearing firms can
act as these as well.
What is a transfer agent? - ANSWER(often a bank) for a corporation is responsible for ensuring that
its securities are issued in the correct owner's name, canceling old and issuing new certificates,
maintaining records of ownership, and handling problems relating to lost, stolen, or destroyed
certificates
What is the function of the clearing corporation? - ANSWERActing as an intermediary in a trade,
examples of these can be a commercial bank, can be a broker-dealer but doesn't have to be
Who is considered a control person (security) - ANSWERthose owned by directors, officers, or
persons (which include corporations, trusts, etc.) who own or control 10% or more of the issuer's
equity securities (an unaffiliated person would have to own 10% or more of the outstanding shares)
What are the two components of Return on Investment? - ANSWERCapital gains and income
To expand the overall economy, we want to - ANSWERbuy securities via open-market operations,
pushing interest rates down
To meet a Regulation T margin call, a customer would have how long? - ANSWERsettlement plus 2
additional business days (or S + 2)
What is A fully disclosed broker-dealer - ANSWERone that introduces its business to a carrying firm to
clear transactions
The regulation enacted by the SEC to protect the privacy of customer information is known as -
ANSWERRegulation S-P
A market maker that does not honor its firm quote is said to be - ANSWER"backing away"
A deficit in the U.S. balance of payments can occur if - ANSWERinterest rates in foreign countries are
higher than U.S. domestic rates and U.S. consumers are purchasing (importing) foreign goods
, The general partner of a limited partnership has responsibility of - ANSWEROrganizing and managing
the partnership, assumes unlimited liability, and is responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to - ANSWERcut taxes (so consumers
have more money to spend) and increase government spending for programs and development (to
create more jobs)
What is the federal funds rate - ANSWERthe rate commercial money center banks charge each other
for an overnight, unsecured loan
The Federal Open Market Committee (FOMC) - ANSWERbuy or sell Treasury securities in the open
market. Purchases add money to the economy, making the money available to lend more plentiful,
and sales take money out of the economy, making money available to lend less plentiful.
Reports of rising inventories generally occur during which period of the business cycle? -
ANSWERContraction, due to a lack of consumer demand
Who is exempt from registering with SIPC? - ANSWERThose who deal exclusively with US
Government securities (i.e.-Treasury bonds), exclusively municipality securities, and in redeemable
investment company securities
Retail investor - ANSWERAn individual who makes investments such as the purchase of securities for
his or her account rather than for an organization
Market maker - ANSWERAny entity, individual or organization, willing to accept the risk of holding a
particular security in its own account to facilitate trading and provide liquidity in that security
When the Federal Reserve Board wants to expand (loosen) the money supply, it will - ANSWERbuy
Treasury securities from banks in the open market
SROs functioning under the SEC include... - ANSWERFINRA, MSRB and CBOE
Mild inflation can - ANSWERencourage growth and stimulate the economy
Discount rate - ANSWERThe rate the FRB charges member banks
