SIE PROGRESS EXAM- CHAPTERS 1-
5 QUESTIONS & VERIFIED CORRECT
ANSWERS
Which of the following securities has the longest period until expiration? CORRECT ANSWER -
Warrant
Order these securities in terms of expiration. CORRECT ANSWER - Warrants (may never expire),
options (9 months), rights (45 days)
A bond is selling at a premium. This indicates that: CORRECT ANSWER - Interest rates have
decreased since the bond was issued
Order yields from highest to lowest when a bond is selling at a premium. CORRECT ANSWER -
Nominal yield (highest), current, yield-to-maturity or basis (lowest)
Banks savings account, including CDs in a bank account, up to 250K are guaranteed and insured
by the: CORRECT ANSWER - FDIC
Corporate and municipal bonds trade in increments of _____, while T-notes and T-bonds trade
in increments of _______. CORRECT ANSWER - 1/8 of a point; 1/32 of a point
Which SRO enforces municipal securities regulations for broker-dealers? CORRECT ANSWER -
FINRA
Which SRO creates rules governing municipal securities broker-dealers but cannot enforce?
CORRECT ANSWER - MSRB
, When a broker-dealer buys a security from a customer by using its own funds and places the
securities into its inventory, it has acted as a ______. CORRECT ANSWER - Dealer (principal).
Principals charge customer a _____ for their services. CORRECT ANSWER - Markdown/Markup
If a firm bought a security for a customer without being the other side of the transaction, it
would be acting as a ____ charging a _______. CORRECT ANSWER - broker (agent); commission
The firm that controls trading on an exchange for a specific stock is referred to as a ____ _____
_____. CORRECT ANSWER - designated market maker (DMM).
A U.S. government bond is selling in the market at 95.28. The dollar value of this bond is:
CORRECT ANSWER - 95.875% of the par value of $1,000. $1,000 x 95.875% = $958.75. U.S.
government bonds are quoted as a percentage of par with a fraction in 32nds of a point
When a bond is called, the bondholder receives the: CORRECT ANSWER - Call Price (par or
premium) + Accrued Interest
Which rule regulates the resale of restricted securities? CORRECT ANSWER - Rule 144
Which rule sets the regulations for raising capital through private placements. CORRECT
ANSWER - Regulation D
A municipal bond that's backed by revenues of a project or facility is referred to as a ______
bond. When the income is insufficient to make the debt service payments (i.e., interest and/or
principal payments), what will happen? CORRECT ANSWER - The issuer will default.
5 QUESTIONS & VERIFIED CORRECT
ANSWERS
Which of the following securities has the longest period until expiration? CORRECT ANSWER -
Warrant
Order these securities in terms of expiration. CORRECT ANSWER - Warrants (may never expire),
options (9 months), rights (45 days)
A bond is selling at a premium. This indicates that: CORRECT ANSWER - Interest rates have
decreased since the bond was issued
Order yields from highest to lowest when a bond is selling at a premium. CORRECT ANSWER -
Nominal yield (highest), current, yield-to-maturity or basis (lowest)
Banks savings account, including CDs in a bank account, up to 250K are guaranteed and insured
by the: CORRECT ANSWER - FDIC
Corporate and municipal bonds trade in increments of _____, while T-notes and T-bonds trade
in increments of _______. CORRECT ANSWER - 1/8 of a point; 1/32 of a point
Which SRO enforces municipal securities regulations for broker-dealers? CORRECT ANSWER -
FINRA
Which SRO creates rules governing municipal securities broker-dealers but cannot enforce?
CORRECT ANSWER - MSRB
, When a broker-dealer buys a security from a customer by using its own funds and places the
securities into its inventory, it has acted as a ______. CORRECT ANSWER - Dealer (principal).
Principals charge customer a _____ for their services. CORRECT ANSWER - Markdown/Markup
If a firm bought a security for a customer without being the other side of the transaction, it
would be acting as a ____ charging a _______. CORRECT ANSWER - broker (agent); commission
The firm that controls trading on an exchange for a specific stock is referred to as a ____ _____
_____. CORRECT ANSWER - designated market maker (DMM).
A U.S. government bond is selling in the market at 95.28. The dollar value of this bond is:
CORRECT ANSWER - 95.875% of the par value of $1,000. $1,000 x 95.875% = $958.75. U.S.
government bonds are quoted as a percentage of par with a fraction in 32nds of a point
When a bond is called, the bondholder receives the: CORRECT ANSWER - Call Price (par or
premium) + Accrued Interest
Which rule regulates the resale of restricted securities? CORRECT ANSWER - Rule 144
Which rule sets the regulations for raising capital through private placements. CORRECT
ANSWER - Regulation D
A municipal bond that's backed by revenues of a project or facility is referred to as a ______
bond. When the income is insufficient to make the debt service payments (i.e., interest and/or
principal payments), what will happen? CORRECT ANSWER - The issuer will default.
