SIE Practice Test 4 EXAM REVIEW
WITH EXAM QUESTIONS AND CORRECT
SOLUTIONS A+ GRADED UPDATED
2025/2026||100% GUARANTEED
PASS!!<<LATEST EXAM>>
The SEC "quiet periods" for an IPO of an emerging growth company as applied to
the underwriters are:
A) eliminated
B) shortened
C) lenghtened
D) remain unchanged - ANSWER ✓ A
The SEC "quiet periods" are the periods of time surrounding a public offering of a
new issue when pomotional materials are gneerally prohibited. The periods
generally start from the date a decision is made by the issuer to make a public
offering and extend until a certain number of days after the effective date of
registrartion statement. With respect to an IPO of an emerging growth company,
the quiet periods are eliminated.
Which of the following entities provides a physical and electronic location where
listed options transactions are performed during trading hours in the U.S.?
A) The Options Clearing Corporation (OCC)
B) The Securities and Exchange Commission (SEC)
C) The Chicago Board Options Exchange (CBOE)
D) The Financial Industry Regulatory Authority (FINRA) - ANSWER ✓ C
The Chicago Board Options Exchange (CBOE) is the largest U.S. options
exchange facilitating the majority of listed option transactions during trading hours
in the U.S. The Options Clearing corporation (OCC) is responsible for accepting,
guaranteeing, and cleaing the exercise of listed option contracts and the majority of
option activity in the U.S. The Securities Exchange Commission (SEC) is a
regulatory commission for financial purposes in the U.S, while the Financial
,Industry Regulartory Authority (FINRA) is a self-regulatory organization charged
with the majority of regularory duties within the U.S.
When helping your customer select a mutual fund all of the following would be
primary considerations EXCEPT
A) the NAV (Net Asset Value) of the fund
B) the fund's historical performance
C) sale charges
D) the fund's risk and volatility profile - ANSWER ✓ A
Of the chocies offered, the lcient and RR should be concered with the investment
risk, pperformance, and sales charges. The Net Asset Value is a facotr but
investors generally base investment decisions on objective/risk, performance, and
charges, and the NAV is not an overriding concern during the selection process. Of
course, once the investor owns a fund the NAV is very important.
Which of the following statements is TRUE regarding an SEC Regulation A
Offering?
A) A prospectus must be delivered
B) The offering may not exceed $50 million
C) A registration statement must be filed with the SEC
D) A maximum of 35 accredited investors may purchase the securities - ANSWER
✓B
An SEC Regulation A offering is used for small issues (i.e. not more than $50
million). An offering cirucular is used instead of the satndard registration statement
and prospecturs. "Accredited investors" are exempt from the maximum number of
investors permitted.
Which of the following would not be a consideration in 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
,All but choice B would be consideration. The quality of the securites could be an
important factor in whether the trades were suitable but not generally a factor for
determining churning.
A "hedge fund" is a form of investment that involves:
A) investment in landscaping companies.
B) pooled investment by multiple investors where no specific criteria must be met
to participate.
C) pooled investment by multiple investors where, due to high levels of risk, only
high net worth investors are permitted to participate.
D) investment in securities on both the upside and downside of the market with the
goal of limiting risk and protecting an investor's assets. - ANSWER ✓ C
A hedge fund is a form of pooled investments that is considered to be high risk.
Hedge funds use derivatives such as options and engage in short selling in order to
obtain high rates of return. Because of the high level of risk involved, only high net
worth investors are permitted to participate. Pooled invesments that have no
specific criteria needed to particiapate would likely be investment companies of
various type (mutual funds). The "hedge" in hedge fund does not apply to
landscaping. Also, "hedge fudn" is not a specfici reference to the investment
strategy of "hedging" investments (being on both sides of the market), though
historically, hedge funds engage in more short selling as a means of protecting
agianst losses. Hedge funds have a goal of high return, not limiation of risk and
protection of investor assets.
The type of policy which advocates that the federal government uses taxation and
increasing spending programs to foster a growing economy is called
A) fiscal policy
B) monetary policy
C) supply-side policy
D) trade policy - ANSWER ✓ A
Fiscal policy includes federal taxation and spending policies inteneded to level out
business cycles, achieve full employment and price stability and sustained growth
for the economy. Monetary policy involves the decisions of the Federal Reserve
Board with regard to money supply and the extension of credit. Supply-side
, policies focus on tax cuts. Trade policy, although imporatn, doesn't really apply in
this quesiton.
A floor broker executing an order for a public customer asks the designated
market maker to guarantee a price while giving the floor broker an opportunity to
obtain a better price for the customer. This is known as
A) a stop order
B) stopping stock
C) best efforts order
D) a limit order - ANSWER ✓ B
Stopping stock is a favor that a designated market maker can do for a floor broker.
The floor borker knows they have the stock sold if they are "stopped" but thye can
still try to get better price in the market place.
The Alternative Minimum Tax (AMT) may be applied to shareholders of a mutual
fund that has which of the following securities contained within?
A) U.S. Treasury Bills
B) Convertible bonds
C) Municipal bonds issued for private industry purposes
D) Investments in blue chip securities - ANSWER ✓ C
For individuals, the AMT is computed by adding tax preference items to taxable
income. Among those items is interest earned on private activity municipal bonds.
Which of the following bond offerings would be required to have a trust indenture
under the Trust Indenture Act of 1939?
A) U.S. Treasury Bond
B) airport authority revenue bond
C) general obligation bond
D) mortgage bond - ANSWER ✓ D
Since the Trust Indenture Act of 1939 is applicable onlny to corporate bonds, the
mortgage bonds would bethe only bonds required to have a trust indenture.
All of the following are true about a registration statement EXCEPT:
WITH EXAM QUESTIONS AND CORRECT
SOLUTIONS A+ GRADED UPDATED
2025/2026||100% GUARANTEED
PASS!!<<LATEST EXAM>>
The SEC "quiet periods" for an IPO of an emerging growth company as applied to
the underwriters are:
A) eliminated
B) shortened
C) lenghtened
D) remain unchanged - ANSWER ✓ A
The SEC "quiet periods" are the periods of time surrounding a public offering of a
new issue when pomotional materials are gneerally prohibited. The periods
generally start from the date a decision is made by the issuer to make a public
offering and extend until a certain number of days after the effective date of
registrartion statement. With respect to an IPO of an emerging growth company,
the quiet periods are eliminated.
Which of the following entities provides a physical and electronic location where
listed options transactions are performed during trading hours in the U.S.?
A) The Options Clearing Corporation (OCC)
B) The Securities and Exchange Commission (SEC)
C) The Chicago Board Options Exchange (CBOE)
D) The Financial Industry Regulatory Authority (FINRA) - ANSWER ✓ C
The Chicago Board Options Exchange (CBOE) is the largest U.S. options
exchange facilitating the majority of listed option transactions during trading hours
in the U.S. The Options Clearing corporation (OCC) is responsible for accepting,
guaranteeing, and cleaing the exercise of listed option contracts and the majority of
option activity in the U.S. The Securities Exchange Commission (SEC) is a
regulatory commission for financial purposes in the U.S, while the Financial
,Industry Regulartory Authority (FINRA) is a self-regulatory organization charged
with the majority of regularory duties within the U.S.
When helping your customer select a mutual fund all of the following would be
primary considerations EXCEPT
A) the NAV (Net Asset Value) of the fund
B) the fund's historical performance
C) sale charges
D) the fund's risk and volatility profile - ANSWER ✓ A
Of the chocies offered, the lcient and RR should be concered with the investment
risk, pperformance, and sales charges. The Net Asset Value is a facotr but
investors generally base investment decisions on objective/risk, performance, and
charges, and the NAV is not an overriding concern during the selection process. Of
course, once the investor owns a fund the NAV is very important.
Which of the following statements is TRUE regarding an SEC Regulation A
Offering?
A) A prospectus must be delivered
B) The offering may not exceed $50 million
C) A registration statement must be filed with the SEC
D) A maximum of 35 accredited investors may purchase the securities - ANSWER
✓B
An SEC Regulation A offering is used for small issues (i.e. not more than $50
million). An offering cirucular is used instead of the satndard registration statement
and prospecturs. "Accredited investors" are exempt from the maximum number of
investors permitted.
Which of the following would not be a consideration in 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
,All but choice B would be consideration. The quality of the securites could be an
important factor in whether the trades were suitable but not generally a factor for
determining churning.
A "hedge fund" is a form of investment that involves:
A) investment in landscaping companies.
B) pooled investment by multiple investors where no specific criteria must be met
to participate.
C) pooled investment by multiple investors where, due to high levels of risk, only
high net worth investors are permitted to participate.
D) investment in securities on both the upside and downside of the market with the
goal of limiting risk and protecting an investor's assets. - ANSWER ✓ C
A hedge fund is a form of pooled investments that is considered to be high risk.
Hedge funds use derivatives such as options and engage in short selling in order to
obtain high rates of return. Because of the high level of risk involved, only high net
worth investors are permitted to participate. Pooled invesments that have no
specific criteria needed to particiapate would likely be investment companies of
various type (mutual funds). The "hedge" in hedge fund does not apply to
landscaping. Also, "hedge fudn" is not a specfici reference to the investment
strategy of "hedging" investments (being on both sides of the market), though
historically, hedge funds engage in more short selling as a means of protecting
agianst losses. Hedge funds have a goal of high return, not limiation of risk and
protection of investor assets.
The type of policy which advocates that the federal government uses taxation and
increasing spending programs to foster a growing economy is called
A) fiscal policy
B) monetary policy
C) supply-side policy
D) trade policy - ANSWER ✓ A
Fiscal policy includes federal taxation and spending policies inteneded to level out
business cycles, achieve full employment and price stability and sustained growth
for the economy. Monetary policy involves the decisions of the Federal Reserve
Board with regard to money supply and the extension of credit. Supply-side
, policies focus on tax cuts. Trade policy, although imporatn, doesn't really apply in
this quesiton.
A floor broker executing an order for a public customer asks the designated
market maker to guarantee a price while giving the floor broker an opportunity to
obtain a better price for the customer. This is known as
A) a stop order
B) stopping stock
C) best efforts order
D) a limit order - ANSWER ✓ B
Stopping stock is a favor that a designated market maker can do for a floor broker.
The floor borker knows they have the stock sold if they are "stopped" but thye can
still try to get better price in the market place.
The Alternative Minimum Tax (AMT) may be applied to shareholders of a mutual
fund that has which of the following securities contained within?
A) U.S. Treasury Bills
B) Convertible bonds
C) Municipal bonds issued for private industry purposes
D) Investments in blue chip securities - ANSWER ✓ C
For individuals, the AMT is computed by adding tax preference items to taxable
income. Among those items is interest earned on private activity municipal bonds.
Which of the following bond offerings would be required to have a trust indenture
under the Trust Indenture Act of 1939?
A) U.S. Treasury Bond
B) airport authority revenue bond
C) general obligation bond
D) mortgage bond - ANSWER ✓ D
Since the Trust Indenture Act of 1939 is applicable onlny to corporate bonds, the
mortgage bonds would bethe only bonds required to have a trust indenture.
All of the following are true about a registration statement EXCEPT:
