STC SIE FINAL REVIEW SCRIPT 2026
TESTED ANSWERS GRADED A+
● A limited partner would be in jeopardy of losing her limited liability if
the partner:
A. Received a portion of the project's income and deductions
B. assisted in the decision of which properties to acquire
C. insisted on examining the partnership's financial records
D. made a loan to the partnership. Answer: B
Limited partners have the right to receive their portion of income and
losses, examine books and records, and make loans to the partnership. If
they get involved in the management of the program, such as deciding
which properties to acquire, they could be considered general partners
and lose their limited liability.
● Which of the following is NOT a type of unsystematic risk?
A. Political Risk
B. Business risk
C. Credit risk
D. Market risk. Answer: D
Market risk is a form of systematic risk and cannot be avoided by
securities investor. For example, if the overall stock market is declining,
it will negatively affect all of the stocks in the market. Conversely,
,unsystematic risk is able to be reduced through appropriate
diversification.
● A registered person has received a gift that's valued at $150 from the
FINRA member firm through which her firm clears trades. This gift is
considered:
A. Excessive
B. Acceptable, but only it it's documented by the gifting firm
C. Acceptable, but only if it's documented by the receiving firm
D. Acceptable. Answer: A
If an associated person of a member firm provides a gift that exceeds
$100 from another FINRA member firm, it's unacceptable and a
violation of FINRA rules.
● Three-month and six-month Treasury bills are auctioned by the
Federal Reserve Board:
A. Daily
B. Weekly
C. Monthly
D. Annually. Answer: B
Three-month and six-month Treasury Bills are sold at public auctions
each Monday.
,● An uncle would like to invest for his nephew's college education.
Which of the following factors is a benefit of a 529 plan?
A. Uniformity of state taxation
B. Pretax contributions
C. Change of beneficiaries allowed
D. No limits on contributions. Answer: C
The owner of a 529 plan may change beneficiaries. Contributions are
made on an after-tax basis, and are based on state rules, which vary from
state to state. Contributions are limited, and vary by state.
● A brokerage firm will generally distribute which of the folloing to
employees of the firm?
A. The restricted list
B. The watch list
C. A list of the mutual funds it recommends to customers
D. A list of the stocks in which it makes a market. Answer: A
Restricted and watch lists include securities that employees are either
restricted or prohibited from trading, or issues that are subject to closer
scrutiny by the brokerage firm. The restriction or limitations associated
with the lists apply to the employee transactions and to solicited
transactions with customers. The restricted list must be distributed to
employees; however, the content of the watch list is generally known
only to selected members of the legal and compliance departments.
, ● Which of the following is the rate that commercial banks charge on
loans to broker-dealers for margin purposes?
A. Prime rate
B. discount rate
C. Federal funds rate
D. Call rate. Answer: D
The call rate is what commercial banks charge on loans to broker-dealers
for margin purposes. The prime rate is the rate that commercial banks
charge to their best corporate clients. The discount rate is what the
Federal Reserve charges when lending to member banks. The federal
funds rate is the rate charged on overnight loans between member banks.
● An investor has a portfolio of bonds that yields 6%. Interest rates have
been falling and most of the bonds in the portfolio are due to mature
which will force the investor to seek new bonds at lower yields. This
investor is experiencing:
A. Opportunity risk
B. Repayment risk
C. prepayment risk
D. Credit risk. Answer: B
Reinvestment risk is the result of not being able to reinvest funds at the
same rate after a bond matures or is called. Opportunity risk it eh risk
that the yield of a chosen investment will be less that the yield of another
investment that was not chose. When interest fall, mortgages may be
refinanced and paid off early, resulting in prepayment risk for mortgage-
TESTED ANSWERS GRADED A+
● A limited partner would be in jeopardy of losing her limited liability if
the partner:
A. Received a portion of the project's income and deductions
B. assisted in the decision of which properties to acquire
C. insisted on examining the partnership's financial records
D. made a loan to the partnership. Answer: B
Limited partners have the right to receive their portion of income and
losses, examine books and records, and make loans to the partnership. If
they get involved in the management of the program, such as deciding
which properties to acquire, they could be considered general partners
and lose their limited liability.
● Which of the following is NOT a type of unsystematic risk?
A. Political Risk
B. Business risk
C. Credit risk
D. Market risk. Answer: D
Market risk is a form of systematic risk and cannot be avoided by
securities investor. For example, if the overall stock market is declining,
it will negatively affect all of the stocks in the market. Conversely,
,unsystematic risk is able to be reduced through appropriate
diversification.
● A registered person has received a gift that's valued at $150 from the
FINRA member firm through which her firm clears trades. This gift is
considered:
A. Excessive
B. Acceptable, but only it it's documented by the gifting firm
C. Acceptable, but only if it's documented by the receiving firm
D. Acceptable. Answer: A
If an associated person of a member firm provides a gift that exceeds
$100 from another FINRA member firm, it's unacceptable and a
violation of FINRA rules.
● Three-month and six-month Treasury bills are auctioned by the
Federal Reserve Board:
A. Daily
B. Weekly
C. Monthly
D. Annually. Answer: B
Three-month and six-month Treasury Bills are sold at public auctions
each Monday.
,● An uncle would like to invest for his nephew's college education.
Which of the following factors is a benefit of a 529 plan?
A. Uniformity of state taxation
B. Pretax contributions
C. Change of beneficiaries allowed
D. No limits on contributions. Answer: C
The owner of a 529 plan may change beneficiaries. Contributions are
made on an after-tax basis, and are based on state rules, which vary from
state to state. Contributions are limited, and vary by state.
● A brokerage firm will generally distribute which of the folloing to
employees of the firm?
A. The restricted list
B. The watch list
C. A list of the mutual funds it recommends to customers
D. A list of the stocks in which it makes a market. Answer: A
Restricted and watch lists include securities that employees are either
restricted or prohibited from trading, or issues that are subject to closer
scrutiny by the brokerage firm. The restriction or limitations associated
with the lists apply to the employee transactions and to solicited
transactions with customers. The restricted list must be distributed to
employees; however, the content of the watch list is generally known
only to selected members of the legal and compliance departments.
, ● Which of the following is the rate that commercial banks charge on
loans to broker-dealers for margin purposes?
A. Prime rate
B. discount rate
C. Federal funds rate
D. Call rate. Answer: D
The call rate is what commercial banks charge on loans to broker-dealers
for margin purposes. The prime rate is the rate that commercial banks
charge to their best corporate clients. The discount rate is what the
Federal Reserve charges when lending to member banks. The federal
funds rate is the rate charged on overnight loans between member banks.
● An investor has a portfolio of bonds that yields 6%. Interest rates have
been falling and most of the bonds in the portfolio are due to mature
which will force the investor to seek new bonds at lower yields. This
investor is experiencing:
A. Opportunity risk
B. Repayment risk
C. prepayment risk
D. Credit risk. Answer: B
Reinvestment risk is the result of not being able to reinvest funds at the
same rate after a bond matures or is called. Opportunity risk it eh risk
that the yield of a chosen investment will be less that the yield of another
investment that was not chose. When interest fall, mortgages may be
refinanced and paid off early, resulting in prepayment risk for mortgage-
