SIE NEW EXAM QUESTIONS AND 100% CORRECT ANSWERS
LATEST UPDATE
You are comparing two bond issues. The bonds have the same coupon rate, face value
and maturity date. One is labeled high quality and the other is labeled low quality. Which
of the following would you expect of the high quality issue in comparison to the lower
quality issue?
a. lower market value
b. higher market value
c. higher price volatility
d. higher yield - ANSWER b. higher market value
Where a bond is rated above other bonds of the same category, one should expect its
market price to be higher and a lower yield. This is because the bond is less risky. The
prices of high-quality bonds have lower volatility compared to low-quality bonds.
A customer buys 100 shares of XYZ at $33/share and buys 1 XYZ July 35 put @ 5. The
stock then increases to $44/share and the customer closes the option at 1 and sells the
stock in the market. The customer's gain or loss?
a. $400 loss
b. $500 gain
c. $700 gain
d. $1,100 loss - ANSWER c. $700 gain
B-3,300
B-500
S+100
,S+4,400
= $700 gain
Which of the following would NOT be a factor when determining whether a customer
account has been excessively traded (churned) by the RR?
a. RR discretionary authority over the account
b. the quality of the securities
c. the RR's reasons for the trades
d. the account turnover - ANSWER b. the quality of the securities
The quality of the securities may be an important factor in determining if the trades were
suitable but generally would not be a factor in determining churning
When assisting your customer in selecting a mutual fund all of the following would be a
primary consideration EXCEPT
a. the NAV of the fund
b. the fund's historical performance
c. sale charges
d. the fund's risk and volatility profile - ANSWER a. the NAV of the fund
NAV is important once the investor owns a fund but not typically a consideration before
The exercise price of a listed equity option would be adjusted for all of the following
EXCEPT?
a. a 2:1 stock split
b. dividends paid in cash
,c. rights issued on common stock
d. dividends paid in stock - ANSWER b. dividends paid in cash
no change in number of shares that customer will own or that option will represent. all
others answers represent a change in number of shares
Which of the following is a CORRECT statement about trade confirmations being
delivered to customers?
a. confirmations need NOT be delivered to customers in most cases
b. confirmations MUST be delivered as requested by the customer
c. confirmations MUST be delivered at or prior to completion of the trade
d. confirmations MUST be delivered no later than 4 business days after trade date -
ANSWER c. confirmations MUST be delivered at or prior to completion of the trade
A customer buys 100 shares of ABC at 50.50 and sells 1 ABC 50 call @ 5. At what price
will the customer breakeven?
a. $45
b. $45.50
c. $55
d. $55.50 - ANSWER b. $45.50
B-5,050
S+500
= -4,550/100
= $45.50
All of the following securities can be bought on margin in a margin account EXCEPT?
, a. US government securities
b. listed securities
c. NASDQZ securities
d. new issues - ANSWER d. new issues
any security sold with a prospectus can not be purchased on margin, new issues must
be paid in full
Foreign exchange rates are determined in which of the following markets?
a. they are determined in the equity securities market
b. they are determined in the primary market
c. they are determined in the fourth market
d. they are determined in the interbank -
ANSWER d. they are determined in the interbank
interbank- system where currencies are traded between certain banks and financial
institutions
An investor who is interested in buying Class A mutual fund shares would have which of
the following characteristics?
a. small amount available to invest
b. short-term time horizon
c. moderate to large sum to invest
d. speculation as an investment goal - ANSWER c. moderate to large sum to invest
Class A mutual fund shares typically have a front-end shares load and sales charge
breakpoints, but usually have lower annual 12b-1 fees. Usually well suited for investors
with a moderate to large amount of money they wish to invest because the sales charge
LATEST UPDATE
You are comparing two bond issues. The bonds have the same coupon rate, face value
and maturity date. One is labeled high quality and the other is labeled low quality. Which
of the following would you expect of the high quality issue in comparison to the lower
quality issue?
a. lower market value
b. higher market value
c. higher price volatility
d. higher yield - ANSWER b. higher market value
Where a bond is rated above other bonds of the same category, one should expect its
market price to be higher and a lower yield. This is because the bond is less risky. The
prices of high-quality bonds have lower volatility compared to low-quality bonds.
A customer buys 100 shares of XYZ at $33/share and buys 1 XYZ July 35 put @ 5. The
stock then increases to $44/share and the customer closes the option at 1 and sells the
stock in the market. The customer's gain or loss?
a. $400 loss
b. $500 gain
c. $700 gain
d. $1,100 loss - ANSWER c. $700 gain
B-3,300
B-500
S+100
,S+4,400
= $700 gain
Which of the following would NOT be a factor when determining whether a customer
account has been excessively traded (churned) by the RR?
a. RR discretionary authority over the account
b. the quality of the securities
c. the RR's reasons for the trades
d. the account turnover - ANSWER b. the quality of the securities
The quality of the securities may be an important factor in determining if the trades were
suitable but generally would not be a factor in determining churning
When assisting your customer in selecting a mutual fund all of the following would be a
primary consideration EXCEPT
a. the NAV of the fund
b. the fund's historical performance
c. sale charges
d. the fund's risk and volatility profile - ANSWER a. the NAV of the fund
NAV is important once the investor owns a fund but not typically a consideration before
The exercise price of a listed equity option would be adjusted for all of the following
EXCEPT?
a. a 2:1 stock split
b. dividends paid in cash
,c. rights issued on common stock
d. dividends paid in stock - ANSWER b. dividends paid in cash
no change in number of shares that customer will own or that option will represent. all
others answers represent a change in number of shares
Which of the following is a CORRECT statement about trade confirmations being
delivered to customers?
a. confirmations need NOT be delivered to customers in most cases
b. confirmations MUST be delivered as requested by the customer
c. confirmations MUST be delivered at or prior to completion of the trade
d. confirmations MUST be delivered no later than 4 business days after trade date -
ANSWER c. confirmations MUST be delivered at or prior to completion of the trade
A customer buys 100 shares of ABC at 50.50 and sells 1 ABC 50 call @ 5. At what price
will the customer breakeven?
a. $45
b. $45.50
c. $55
d. $55.50 - ANSWER b. $45.50
B-5,050
S+500
= -4,550/100
= $45.50
All of the following securities can be bought on margin in a margin account EXCEPT?
, a. US government securities
b. listed securities
c. NASDQZ securities
d. new issues - ANSWER d. new issues
any security sold with a prospectus can not be purchased on margin, new issues must
be paid in full
Foreign exchange rates are determined in which of the following markets?
a. they are determined in the equity securities market
b. they are determined in the primary market
c. they are determined in the fourth market
d. they are determined in the interbank -
ANSWER d. they are determined in the interbank
interbank- system where currencies are traded between certain banks and financial
institutions
An investor who is interested in buying Class A mutual fund shares would have which of
the following characteristics?
a. small amount available to invest
b. short-term time horizon
c. moderate to large sum to invest
d. speculation as an investment goal - ANSWER c. moderate to large sum to invest
Class A mutual fund shares typically have a front-end shares load and sales charge
breakpoints, but usually have lower annual 12b-1 fees. Usually well suited for investors
with a moderate to large amount of money they wish to invest because the sales charge
