STC SIE Exam Final Practice Questions
& Answers 100% Accurate!
Which of the following statements is TRUE concerning periodic payment variable annuities?
A. A client's number of annuity units never changes
B. A client's number of accumulation units never changes
C. Annuity contracts never have a beneficiary
D. The monthly payout is fixed by the inflation index - ANSWERA. A client's number of annuity units
never changes
Which of the following securities would be subject to federal securities registration requirements?
A. Securities offered through a private placement
B. GNMA securities
C. Municipal bonds
D. Mutual fund shares - ANSWERD. Mutual fund shares
Mutual fund shares would be subject to registration requirements at the state and federal level. The
other securities are exempt from federal and state registration requirements.
Which of the following is the likely result of persistent deflation?
A. A decrease in interest rates
B. A decrease in the level of inflation
C. A decrease in bond prices
D. An increase in the value of equities - ANSWERA. A decrease in interest rates
An investor purchases a 20-year 5.30% bond at par value that will yield 5.75% if called at the first call
date in five years. The yield to maturity on the bond is:
,A. 5.30%
B. More than 5.30%
C. Between 5.30% and 5.75%
D. 5.75% - ANSWERA. 5.30%
As it relates to private securities transactions that are executed by an associated person of a broker-
dealer, compensation does NOT include:
A. Being paid a commission by the employing broker-dealer
B. Being paid a commission by another broker-dealer
C. Receiving tax benefits received by the employee
D. Being given warrants by another firm - ANSWERA. Being paid a commission by the employing
broker-dealer
A convertible bond has a conversion price of $50 and is currently selling in the market at $1,100. The
conversion ratio is:
A. 20
B. 22
C. 55
D. 50 - ANSWERA. 20
To find the conversion ratio of a convertible bond, the bond's par value ($1,000) is divided by the
conversion price ($50).
Which of the following statements is NOT TRUE about a fidelity bond?
A. It protects customers in the event their broker-dealer goes bankrupt.
B. It's insurance that protects a broker-dealer in case of fraud such as forgery or counterfeit currency.
C. FINRA must be notified if the bond is cancelled or substantially modified.
D. It covers securities that are held at the brokerage firm as well as those in transit. - ANSWERA. It
protects customers in the event their broker-dealer goes bankrupt.
, A fidelity bond does not protect customers in the event of broker-dealer bankruptcy; that's the role
of SIPC.
If a market maker has a current quote of 50.00 - 50.05 (15 x 20), this indicates that the firm is willing
to:
A. Sell 200 shares at $50.00 and buy 150 shares at $50.05
B. Buy 150 shares at $50.00 and sell 200 shares at $50.05
C. Sell 1,500 shares at $50.00 and buy 2,000 shares at $50.05
D. Buy 1,500 shares at $50.00 and sell 2,000 shares at $50.05 - ANSWERD. Buy 1,500 shares at
$50.00 and sell 2,000 shares at $50.05
The purchase price of a no-load fund is determined by the:
A. Net asset value plus a commission
B. Net asset value plus a sales charge
C. Supply and demand for the fund
D. Net asset value - ANSWERD. Net asset value
SPDR is considered a type of:
A. Index option
B. Exchange-traded fund
C. Mutual fund
D. World currency option - ANSWERB. Exchange-traded fund
Standard & Poor's Depositary Receipt (SPDR) is a type of exchange-traded fund (ETF). It can be used
to refer to a specific exchange-traded fund that tracks the S&P 500 or a group of ETFs.
Which of the following is NOT a benefit of investing in a real estate investment trust (REIT)?
& Answers 100% Accurate!
Which of the following statements is TRUE concerning periodic payment variable annuities?
A. A client's number of annuity units never changes
B. A client's number of accumulation units never changes
C. Annuity contracts never have a beneficiary
D. The monthly payout is fixed by the inflation index - ANSWERA. A client's number of annuity units
never changes
Which of the following securities would be subject to federal securities registration requirements?
A. Securities offered through a private placement
B. GNMA securities
C. Municipal bonds
D. Mutual fund shares - ANSWERD. Mutual fund shares
Mutual fund shares would be subject to registration requirements at the state and federal level. The
other securities are exempt from federal and state registration requirements.
Which of the following is the likely result of persistent deflation?
A. A decrease in interest rates
B. A decrease in the level of inflation
C. A decrease in bond prices
D. An increase in the value of equities - ANSWERA. A decrease in interest rates
An investor purchases a 20-year 5.30% bond at par value that will yield 5.75% if called at the first call
date in five years. The yield to maturity on the bond is:
,A. 5.30%
B. More than 5.30%
C. Between 5.30% and 5.75%
D. 5.75% - ANSWERA. 5.30%
As it relates to private securities transactions that are executed by an associated person of a broker-
dealer, compensation does NOT include:
A. Being paid a commission by the employing broker-dealer
B. Being paid a commission by another broker-dealer
C. Receiving tax benefits received by the employee
D. Being given warrants by another firm - ANSWERA. Being paid a commission by the employing
broker-dealer
A convertible bond has a conversion price of $50 and is currently selling in the market at $1,100. The
conversion ratio is:
A. 20
B. 22
C. 55
D. 50 - ANSWERA. 20
To find the conversion ratio of a convertible bond, the bond's par value ($1,000) is divided by the
conversion price ($50).
Which of the following statements is NOT TRUE about a fidelity bond?
A. It protects customers in the event their broker-dealer goes bankrupt.
B. It's insurance that protects a broker-dealer in case of fraud such as forgery or counterfeit currency.
C. FINRA must be notified if the bond is cancelled or substantially modified.
D. It covers securities that are held at the brokerage firm as well as those in transit. - ANSWERA. It
protects customers in the event their broker-dealer goes bankrupt.
, A fidelity bond does not protect customers in the event of broker-dealer bankruptcy; that's the role
of SIPC.
If a market maker has a current quote of 50.00 - 50.05 (15 x 20), this indicates that the firm is willing
to:
A. Sell 200 shares at $50.00 and buy 150 shares at $50.05
B. Buy 150 shares at $50.00 and sell 200 shares at $50.05
C. Sell 1,500 shares at $50.00 and buy 2,000 shares at $50.05
D. Buy 1,500 shares at $50.00 and sell 2,000 shares at $50.05 - ANSWERD. Buy 1,500 shares at
$50.00 and sell 2,000 shares at $50.05
The purchase price of a no-load fund is determined by the:
A. Net asset value plus a commission
B. Net asset value plus a sales charge
C. Supply and demand for the fund
D. Net asset value - ANSWERD. Net asset value
SPDR is considered a type of:
A. Index option
B. Exchange-traded fund
C. Mutual fund
D. World currency option - ANSWERB. Exchange-traded fund
Standard & Poor's Depositary Receipt (SPDR) is a type of exchange-traded fund (ETF). It can be used
to refer to a specific exchange-traded fund that tracks the S&P 500 or a group of ETFs.
Which of the following is NOT a benefit of investing in a real estate investment trust (REIT)?
