SIE Practice Exam questions and answers
with solutions
Which corporate voting procedures entitles a shareholder to one vote per share, and votes
must be divided evenly among the candidates being voted on? - ANSWER Statutory voting
What market refers to the trading of exchange-listed securities in the over-the-counter market?
These trades allow institutional investors to trade blocks of securities directly, rather than
through an exchange, providing liquidity and anonymity to buyers. - ANSWER Third market
An investor sells a naked call on Omikron for a $250 premium. What is true regarding the
investors position? - ANSWER The investor's potential loss is unlimited
Which act created the SEC and empowered it with broad authority over all aspects of the
securities industry? - ANSWER Securities Exchange Act of 1934
A free tool provided by FINRA that is intended to help consumers research the professional
backgrounds of brokers and brokerage firms, as well as investment advisor firms and advisors? -
ANSWER BrokerCheck
The Federal Reserve Board performs what actions? - ANSWER It sets monetary policy, but does
not set tax policy
An offering of shares to existing stockholders on a pro-rata basis is called a - ANSWER Rights
offering
The difference between a bond's price and the conversion parity price is referred to as -
ANSWER conversion premium
, An individual who meets what criteria must register as an investment adviser? - ANSWER The
individual provides advice or analyses concerning securities
The individual is in the business of providing investment advice
The individual provides investment advice for compensation
A type of preferred stock that gives the investor the right to receive dividends equal to the
normally specified rate, as well as an additional dividend based on a specific predetermined
condition is called a - ANSWER participating preferred stock
Profit sharing plans have what characteristic? - ANSWER they can be invested entirely in
company stock
What is true regarding the Central Registration Depository (CRD)? - ANSWER It was developed
by NASAA and the NASD
It consolidated a multiple paper-based state licensing and regulatory process into a single,
nationwide computer system
Its computerized database contains the licensing and disciplinary histories on more than
650,000 securities professionals and 5,200 securities firms
Who is responsible for maintaining fair and orderly markets for an assigned set of listed firms?
They operate both manually and electronically to facilitate price discovery during market opens,
closes, and during periods of trading imbalances and instability. - ANSWER Designated Market
Makers
If real GDP declined the last 3 quarters, how many more consecutive quarters of decline would
be needed to be classified as an economic depression? - ANSWER 3 quarters
What is a correct reason to purchase a particular investment for a client's portfolio? - ANSWER
Blue chip common stocks because they provide a hedge against inflation
with solutions
Which corporate voting procedures entitles a shareholder to one vote per share, and votes
must be divided evenly among the candidates being voted on? - ANSWER Statutory voting
What market refers to the trading of exchange-listed securities in the over-the-counter market?
These trades allow institutional investors to trade blocks of securities directly, rather than
through an exchange, providing liquidity and anonymity to buyers. - ANSWER Third market
An investor sells a naked call on Omikron for a $250 premium. What is true regarding the
investors position? - ANSWER The investor's potential loss is unlimited
Which act created the SEC and empowered it with broad authority over all aspects of the
securities industry? - ANSWER Securities Exchange Act of 1934
A free tool provided by FINRA that is intended to help consumers research the professional
backgrounds of brokers and brokerage firms, as well as investment advisor firms and advisors? -
ANSWER BrokerCheck
The Federal Reserve Board performs what actions? - ANSWER It sets monetary policy, but does
not set tax policy
An offering of shares to existing stockholders on a pro-rata basis is called a - ANSWER Rights
offering
The difference between a bond's price and the conversion parity price is referred to as -
ANSWER conversion premium
, An individual who meets what criteria must register as an investment adviser? - ANSWER The
individual provides advice or analyses concerning securities
The individual is in the business of providing investment advice
The individual provides investment advice for compensation
A type of preferred stock that gives the investor the right to receive dividends equal to the
normally specified rate, as well as an additional dividend based on a specific predetermined
condition is called a - ANSWER participating preferred stock
Profit sharing plans have what characteristic? - ANSWER they can be invested entirely in
company stock
What is true regarding the Central Registration Depository (CRD)? - ANSWER It was developed
by NASAA and the NASD
It consolidated a multiple paper-based state licensing and regulatory process into a single,
nationwide computer system
Its computerized database contains the licensing and disciplinary histories on more than
650,000 securities professionals and 5,200 securities firms
Who is responsible for maintaining fair and orderly markets for an assigned set of listed firms?
They operate both manually and electronically to facilitate price discovery during market opens,
closes, and during periods of trading imbalances and instability. - ANSWER Designated Market
Makers
If real GDP declined the last 3 quarters, how many more consecutive quarters of decline would
be needed to be classified as an economic depression? - ANSWER 3 quarters
What is a correct reason to purchase a particular investment for a client's portfolio? - ANSWER
Blue chip common stocks because they provide a hedge against inflation
