SIE exam Questions and Answers Graded
A+
What type of risk is unique to a specific industry, business enterprise, or
investment type? - Correct answer-Nonsystematic risk
Under which of the following circumstances is an investor in a position to acquire
stock? - Correct answer-Buy a call, sell a call (The holder of a call has the right to
buy stock at the strike price if exercised. The seller of a put is obligated to buy
stock at the strike price if exercised)
Options- a premium - Correct answer-the cost of an option contract, expressed in
dollars per share of the underlying stock
Options- strike price - Correct answer-The price at which the stock will be bought
or sold if the contract is exercised, expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to
buy 100 shares right now. How could the customer use options to profit from an
increase in the stock's price? - Correct answer-buy calls, write puts (both are
bullish)
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,A corporation's offer to current stockholders of the ability to purchase a
proportionate number of new shares at a specific price for a limited time is called a
- Correct answer-right (they usually expire in 30-45 days)
American depositary receipts (ADRs) - Correct answer-issued by banks, represent
a specific number of shares of a foreign company, and trade and pay dividends in
dollars
Which of the following records must be maintained for 6 years? - Correct answer-
Customer ledgers (statements)
While underwriters can assist with preparation and filing, the accuracy and
adequacy of these documents is the responsibility of the - Correct answer-Issuing
corporation
What institutions serve as depository and clearing facilities? - Correct answer-
Depository Trust Company and National Securities Clearing Corporation (most
specifically) then carrying and clearing firms can act as these as well.
What is a transfer agent? - Correct answer-(often a bank) for a corporation is
responsible for ensuring that its securities are issued in the correct owner's name,
canceling old and issuing new certificates, maintaining records of ownership, and
handling problems relating to lost, stolen, or destroyed certificates
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,What is the function of the clearing corporation? - Correct answer-Acting as an
intermediary in a trade, examples of these can be a commercial bank, can be a
broker-dealer but doesn't have to be
Who is considered a control person (security) - Correct answer-those owned by
directors, officers, or persons (which include corporations, trusts, etc.) who own or
control 10% or more of the issuer's equity securities (an unaffiliated person would
have to own 10% or more of the outstanding shares)
What are the two components of Return on Investment? - Correct answer-Capital
gains and income
To expand the overall economy, we want to - Correct answer-buy securities via
open-market operations, pushing interest rates down
To meet a Regulation T margin call, a customer would have how long? - Correct
answer-settlement plus 2 additional business days (or S + 2)
What is A fully disclosed broker-dealer - Correct answer-one that introduces its
business to a carrying firm to clear transactions
The regulation enacted by the SEC to protect the privacy of customer information
is known as - Correct answer-Regulation S-P
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, A market maker that does not honor its firm quote is said to be - Correct answer-
"backing away"
A deficit in the U.S. balance of payments can occur if - Correct answer-interest
rates in foreign countries are higher than U.S. domestic rates and U.S. consumers
are purchasing (importing) foreign goods
The general partner of a limited partnership has responsibility of - Correct answer-
Organizing and managing the partnership, assumes unlimited liability, and is
responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to - Correct answer-
cut taxes (so consumers have more money to spend) and increase government
spending for programs and development (to create more jobs)
What is the federal funds rate - Correct answer-the rate commercial money center
banks charge each other for an overnight, unsecured loan
The Federal Open Market Committee (FOMC) - Correct answer-buy or sell
Treasury securities in the open market. Purchases add money to the economy,
making the money available to lend more plentiful, and sales take money out of the
economy, making money available to lend less plentiful.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
A+
What type of risk is unique to a specific industry, business enterprise, or
investment type? - Correct answer-Nonsystematic risk
Under which of the following circumstances is an investor in a position to acquire
stock? - Correct answer-Buy a call, sell a call (The holder of a call has the right to
buy stock at the strike price if exercised. The seller of a put is obligated to buy
stock at the strike price if exercised)
Options- a premium - Correct answer-the cost of an option contract, expressed in
dollars per share of the underlying stock
Options- strike price - Correct answer-The price at which the stock will be bought
or sold if the contract is exercised, expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to
buy 100 shares right now. How could the customer use options to profit from an
increase in the stock's price? - Correct answer-buy calls, write puts (both are
bullish)
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,A corporation's offer to current stockholders of the ability to purchase a
proportionate number of new shares at a specific price for a limited time is called a
- Correct answer-right (they usually expire in 30-45 days)
American depositary receipts (ADRs) - Correct answer-issued by banks, represent
a specific number of shares of a foreign company, and trade and pay dividends in
dollars
Which of the following records must be maintained for 6 years? - Correct answer-
Customer ledgers (statements)
While underwriters can assist with preparation and filing, the accuracy and
adequacy of these documents is the responsibility of the - Correct answer-Issuing
corporation
What institutions serve as depository and clearing facilities? - Correct answer-
Depository Trust Company and National Securities Clearing Corporation (most
specifically) then carrying and clearing firms can act as these as well.
What is a transfer agent? - Correct answer-(often a bank) for a corporation is
responsible for ensuring that its securities are issued in the correct owner's name,
canceling old and issuing new certificates, maintaining records of ownership, and
handling problems relating to lost, stolen, or destroyed certificates
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,What is the function of the clearing corporation? - Correct answer-Acting as an
intermediary in a trade, examples of these can be a commercial bank, can be a
broker-dealer but doesn't have to be
Who is considered a control person (security) - Correct answer-those owned by
directors, officers, or persons (which include corporations, trusts, etc.) who own or
control 10% or more of the issuer's equity securities (an unaffiliated person would
have to own 10% or more of the outstanding shares)
What are the two components of Return on Investment? - Correct answer-Capital
gains and income
To expand the overall economy, we want to - Correct answer-buy securities via
open-market operations, pushing interest rates down
To meet a Regulation T margin call, a customer would have how long? - Correct
answer-settlement plus 2 additional business days (or S + 2)
What is A fully disclosed broker-dealer - Correct answer-one that introduces its
business to a carrying firm to clear transactions
The regulation enacted by the SEC to protect the privacy of customer information
is known as - Correct answer-Regulation S-P
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, A market maker that does not honor its firm quote is said to be - Correct answer-
"backing away"
A deficit in the U.S. balance of payments can occur if - Correct answer-interest
rates in foreign countries are higher than U.S. domestic rates and U.S. consumers
are purchasing (importing) foreign goods
The general partner of a limited partnership has responsibility of - Correct answer-
Organizing and managing the partnership, assumes unlimited liability, and is
responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to - Correct answer-
cut taxes (so consumers have more money to spend) and increase government
spending for programs and development (to create more jobs)
What is the federal funds rate - Correct answer-the rate commercial money center
banks charge each other for an overnight, unsecured loan
The Federal Open Market Committee (FOMC) - Correct answer-buy or sell
Treasury securities in the open market. Purchases add money to the economy,
making the money available to lend more plentiful, and sales take money out of the
economy, making money available to lend less plentiful.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
