SIE Practice Exam/Questions & Answers/
A+Rated/Latest Solution
A broker-dealer is permitted to accept payment for a new issue from a new customer
when the: - Answer-registration is effective
/.Which of the following actions is required when a firm receives cash in excess of
$10,000 from one customer in one business day? - Answer-File a Currency Transaction
Report (CTR)
/.A transaction in which a writer covers a position by purchasing on option is called? -
Answer-a closing purchase
/.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? - Answer-Quarterly
/.To offer its shareholders a privilege to obtain its shares at a fixed price, which of the
following products does a corporation issue? - Answer-Rights
/.Which of the following responses describes an advantage of index funds? - Answer-
Lower management fees due to passive management of the fund
/.Blue-sky laws are regulated by which of the following entities? - Answer-State
securities regulators
/.Company ABC announces a 20% stock dividend for its common shareholders. If a
customer holds 1,000 shares at $50.00, what is the new price and number of shares
following the payment of the stock dividend? - Answer-1,200 shares at $41.67
/.An associated person who is not a registered representative is permitted to engage in
which of the following activities? - Answer-Provide account opening forms to a new
customer
/.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 weekly basis? - Answer-Variable rate demand note
/.The primary purpose of a syndicate desk in the context of an equity offering is to: -
Answer-Build an order book and allocate the stock
/.At the time of issuance, which of the following securities normally has the longest
period to expiration? - Answer-Warrants
,/.All of the following risks apply to both foreign and domestic debt instruments except: -
Answer-Exchange
/.A savings account at a bank is guaranteed by which of the following entities? -
Answer-FDIC
/.Which of the following stakeholders has first claim priority in a Chapter 11 proceeding?
- Answer-Secured debt holders
/.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 professor who
resides in the town and works for ABC contributed $200 to the mayor's re-election
campaign 13 months ago. If the employee wants to support the campaign further
without impacting the municipal securities business of the firm., he is permitted to make
an additional contribution of up to what amount? - Answer-$50
/.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 required by the corporation.
/.What is the cost basis of an inherited mutual fund? - Answer-The net asset value
(NAV) of the shares when the owner dies
/.At issue, which of the following debt securities mature in one year or less? - Answer-
Money market instruments
/.Which of the following investment risks is the greatest risk in a variable life insurance
policy? - Answer-Market risk
/.Under normal circumstances, a customer's letter of intent on a mutual fund purchase is
valid for what maximum period of time? - Answer-13 months
/.Under SEC Regulation S-P (Consumer Privacy). which of the following information
must a firm include in its customer privacy and opt-out notices? - Answer-The policies to
protect the security of nonpublic information
/.In the over-the-counter market, the term "spread" refers to the difference between the:
- Answer-Bid and asked prices
/.Regular way settlement on Treasury bonds is: - Answer-Next business day
, /.If a market maker posts a quote of 10.00 - 10.10 [25x10], which of the following actions
is the market maker willing to take? - Answer-Buy 2,500 shares at $10.00 and sell 1,000
shares at $10.10
/.A customer is an officer of a company that is involved in some significant changes. All
of the following items are examples of corporate affairs that could be considered inside
information if the customer shares them with his registered representative except: -
Answer-declare stock dividend
/.FinCen accomplishes its mission to safeguard the financial system from the abuses of
financial crime, including terrorist financing and money laundering, by enforcing: -
Answer-the Bank Secrecy Act
/.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 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
/.Which of the following From U4 reportable events results in a statutory
disqualification? - Answer-A felony conviction for a driving under the influence (DUI)
charge
/.The lsat transaction in XYZ 5.50s 2030 was at 102. This bond is selling at: - Answer-a
premium
/.Which of the following outcomes are possible for the writer of a covered call option? -
Answer-Profit limited and loss limited
/.The call provision of a bond stipulates which of the following factors? - Answer-Call
date and call price
/.Which of the following products is adversely impacted if the issuer's credit rating is
downgraded? - Answer-Exchange-trade notes (ETNs)
/.Direct participation programs (DPPs) provide: - Answer-exposure to non-correlated
assets with steady returns.
/.The computation of dollar prices and accrued interest on municipal bonds is normally
on what calendar basis? - Answer-30/360
/.A member of a stock exchange responsible for providing liquidity on a security by
being willing to buy and sell at all times is known as: - Answer-a market maker.
A+Rated/Latest Solution
A broker-dealer is permitted to accept payment for a new issue from a new customer
when the: - Answer-registration is effective
/.Which of the following actions is required when a firm receives cash in excess of
$10,000 from one customer in one business day? - Answer-File a Currency Transaction
Report (CTR)
/.A transaction in which a writer covers a position by purchasing on option is called? -
Answer-a closing purchase
/.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? - Answer-Quarterly
/.To offer its shareholders a privilege to obtain its shares at a fixed price, which of the
following products does a corporation issue? - Answer-Rights
/.Which of the following responses describes an advantage of index funds? - Answer-
Lower management fees due to passive management of the fund
/.Blue-sky laws are regulated by which of the following entities? - Answer-State
securities regulators
/.Company ABC announces a 20% stock dividend for its common shareholders. If a
customer holds 1,000 shares at $50.00, what is the new price and number of shares
following the payment of the stock dividend? - Answer-1,200 shares at $41.67
/.An associated person who is not a registered representative is permitted to engage in
which of the following activities? - Answer-Provide account opening forms to a new
customer
/.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 weekly basis? - Answer-Variable rate demand note
/.The primary purpose of a syndicate desk in the context of an equity offering is to: -
Answer-Build an order book and allocate the stock
/.At the time of issuance, which of the following securities normally has the longest
period to expiration? - Answer-Warrants
,/.All of the following risks apply to both foreign and domestic debt instruments except: -
Answer-Exchange
/.A savings account at a bank is guaranteed by which of the following entities? -
Answer-FDIC
/.Which of the following stakeholders has first claim priority in a Chapter 11 proceeding?
- Answer-Secured debt holders
/.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 professor who
resides in the town and works for ABC contributed $200 to the mayor's re-election
campaign 13 months ago. If the employee wants to support the campaign further
without impacting the municipal securities business of the firm., he is permitted to make
an additional contribution of up to what amount? - Answer-$50
/.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 required by the corporation.
/.What is the cost basis of an inherited mutual fund? - Answer-The net asset value
(NAV) of the shares when the owner dies
/.At issue, which of the following debt securities mature in one year or less? - Answer-
Money market instruments
/.Which of the following investment risks is the greatest risk in a variable life insurance
policy? - Answer-Market risk
/.Under normal circumstances, a customer's letter of intent on a mutual fund purchase is
valid for what maximum period of time? - Answer-13 months
/.Under SEC Regulation S-P (Consumer Privacy). which of the following information
must a firm include in its customer privacy and opt-out notices? - Answer-The policies to
protect the security of nonpublic information
/.In the over-the-counter market, the term "spread" refers to the difference between the:
- Answer-Bid and asked prices
/.Regular way settlement on Treasury bonds is: - Answer-Next business day
, /.If a market maker posts a quote of 10.00 - 10.10 [25x10], which of the following actions
is the market maker willing to take? - Answer-Buy 2,500 shares at $10.00 and sell 1,000
shares at $10.10
/.A customer is an officer of a company that is involved in some significant changes. All
of the following items are examples of corporate affairs that could be considered inside
information if the customer shares them with his registered representative except: -
Answer-declare stock dividend
/.FinCen accomplishes its mission to safeguard the financial system from the abuses of
financial crime, including terrorist financing and money laundering, by enforcing: -
Answer-the Bank Secrecy Act
/.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 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
/.Which of the following From U4 reportable events results in a statutory
disqualification? - Answer-A felony conviction for a driving under the influence (DUI)
charge
/.The lsat transaction in XYZ 5.50s 2030 was at 102. This bond is selling at: - Answer-a
premium
/.Which of the following outcomes are possible for the writer of a covered call option? -
Answer-Profit limited and loss limited
/.The call provision of a bond stipulates which of the following factors? - Answer-Call
date and call price
/.Which of the following products is adversely impacted if the issuer's credit rating is
downgraded? - Answer-Exchange-trade notes (ETNs)
/.Direct participation programs (DPPs) provide: - Answer-exposure to non-correlated
assets with steady returns.
/.The computation of dollar prices and accrued interest on municipal bonds is normally
on what calendar basis? - Answer-30/360
/.A member of a stock exchange responsible for providing liquidity on a security by
being willing to buy and sell at all times is known as: - Answer-a market maker.
