SIE Practice Exam #2 (score 93%) Questions With Complete Solutions

A registered person who fails to complete the Regulatory Element of the industry's Continuing Education Program will [A] have his registration suspended until the program is completed.* [B] be able to perform only a limited number of registered duties. [C] be required to re-take the license exam within 60 days. [D] be put under review by FINRA to determine if license suspension is warranted. correct answer: EXPLANATION If a registered person does not complete the Regulatory Element of the industry's Continuing Education Program within the required time period, that person's registration will be suspended (or made inactive) until the program is completed. As a result, that person cannot perform any duties that require registration while the license is not active. There is no FINRA review period. Re-taking the exam within 60 days is not a requirement. One of your clients has large holdings of a few blue-chip corporations. The investor wishes to hold onto the stock for multiple reasons, but she is uncertain about price fluctuations in the short-term future. How can she use options to provide the MOST downside protection? [A] She can purchase call options on the securities in her portfolio. [B] She can sell call options on the securities in her portfolio. [C] She can purchase put options on the securities in her portfolio.* [D] She can sell put options on the securities in her portfolio. correct answer: EXPLANATION If an investor is looking for the "most" or "maximum" amount of protection on the downside and currently has holdings in a security, the investor should purchase put options on