FINRA SIE TEST PRACTICE EXAM
Questions with Correct Answers
100% Verified Graded A+
1. The redemption value of an open-end investment company's shares is based on
the
previous offering price
previous closing NAV
NAV computed after the order is received
offering price computed after the order is received
Answer NAV computed after the order is received
2. The computation of dollar prices and accrued interest on municipal bonds is normal on
what calendar basis?
30/360
30/365
Actual/360
Actual/365
,Answer 30/360
3. Blue-sky laws are regulated by which of the following entities? SEC
MSRB
FINRA
state securities regulators
Answer State securities regulators
4. At the time of issuance, which of the following securities normally has the longest
period to expiration?
Rights
Options
Warrants
Repurchase agreements
Answer Warrants
5. Regular way settlement on Treasury Bonds is
same day
next business day second
business day
fifth business day
,Answer next business day
6. A firm is a participant in a public offering. To sell a substantial amount of the securities
to its customers, the firm agrees to repurchase the shares at no less than the original sales
price. Such agreements are
prohibited as fraudulent and manipulative. Permissible if the
securities are deposited into escrow.
prohibited unless the firm immediately sets aside funds for the repurchase permissible if
the customers retain the right to sell the securities into the open market.
Answer prohibited as fraudulent and manipulative
7. Under SEC S-P (Consumer Privacy), which of the following information must a firm
include in its customer privacy and opt-out notices?
the address of the firm's website
the fee to opt out from the privacy program
the deadline by which to opt out from the privacy program
the policies to protect the security of nonpublic information
Answer the policies to protect the security of nonpublic information
8. UTMA accounts are opened under the tax ID number of the minor
donor
, parent
custodian
Answer minor
9. Under FINRA rules, noncash compensation connected with the sale of variable
contracts includes all of the following items EXCEPT
gifts
meals
lodging
commissions
Answer commissions
10. Describe the difference between primary distribution and secondary dis- tribution.
Answer a primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares
11. If a market maker posts a quotes of 10.00 - 10.10 (25x10), which of the following
actions is the market maker willing to take?
sell 1,000 shares at $10 and buy 2,500 shares at $10.10 buy
2,500 shares at $10 and sell 1,000 shares at $10.10 sell 100
shares at $10 and buy 250 shares at $10.10
Questions with Correct Answers
100% Verified Graded A+
1. The redemption value of an open-end investment company's shares is based on
the
previous offering price
previous closing NAV
NAV computed after the order is received
offering price computed after the order is received
Answer NAV computed after the order is received
2. The computation of dollar prices and accrued interest on municipal bonds is normal on
what calendar basis?
30/360
30/365
Actual/360
Actual/365
,Answer 30/360
3. Blue-sky laws are regulated by which of the following entities? SEC
MSRB
FINRA
state securities regulators
Answer State securities regulators
4. At the time of issuance, which of the following securities normally has the longest
period to expiration?
Rights
Options
Warrants
Repurchase agreements
Answer Warrants
5. Regular way settlement on Treasury Bonds is
same day
next business day second
business day
fifth business day
,Answer next business day
6. A firm is a participant in a public offering. To sell a substantial amount of the securities
to its customers, the firm agrees to repurchase the shares at no less than the original sales
price. Such agreements are
prohibited as fraudulent and manipulative. Permissible if the
securities are deposited into escrow.
prohibited unless the firm immediately sets aside funds for the repurchase permissible if
the customers retain the right to sell the securities into the open market.
Answer prohibited as fraudulent and manipulative
7. Under SEC S-P (Consumer Privacy), which of the following information must a firm
include in its customer privacy and opt-out notices?
the address of the firm's website
the fee to opt out from the privacy program
the deadline by which to opt out from the privacy program
the policies to protect the security of nonpublic information
Answer the policies to protect the security of nonpublic information
8. UTMA accounts are opened under the tax ID number of the minor
donor
, parent
custodian
Answer minor
9. Under FINRA rules, noncash compensation connected with the sale of variable
contracts includes all of the following items EXCEPT
gifts
meals
lodging
commissions
Answer commissions
10. Describe the difference between primary distribution and secondary dis- tribution.
Answer a primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares
11. If a market maker posts a quotes of 10.00 - 10.10 (25x10), which of the following
actions is the market maker willing to take?
sell 1,000 shares at $10 and buy 2,500 shares at $10.10 buy
2,500 shares at $10 and sell 1,000 shares at $10.10 sell 100
shares at $10 and buy 250 shares at $10.10
