SIE Exam Full Test 75 Questions Answers 2024

1) As it relates to the bonding of mutual fund employees, which of the following is true?

2) When making markets over the counter, the firm is acting in what capacity?

3) You have recommended a CMO to a sophisticated investor. Which of the following would the investor be most concerned with?

4) INTC has been hitting a lot of resistance at $30. A technical analyst who wants to buy the stock would most likely place what type of order?

5) Mr. and Mrs. Jones, a couple in their early forties, want to start saving for their son’s college expenses, planned for 11 years from now. Which of the following would you recommend?

6) Which of the following could be subject to an investor’s AMT?

7) Issuance of which of the following would require the approval of existing shareholders?

8) A conservative investor wants to invest $100,000 into an instrument that will provide current income and the most protection from interest rate risk. What would you recommend?

9) You are the owner of a restaurant and you would like to have a guitarist play in the lounge on Saturday evenings. You know your representative is a great jazz guitarist. Before accepting your offer, she must notify:

10) Which of the following issues standardized options?

11) You are long 10,000 shares of XYZ at 42 and are concerned about a market decline, and you would like to take in some additional income. You should:

12) All of the following may trade on the floor of the NYSE except:

13) A principal must do all of the following, EXCEPT:

14) XYZ has just gone public and is quoted on the Nasdaq Capital Market. Any investor who buys XYZ must get a prospectus for how long?

15) A client is concerned about the impact of new EPA laws requiring disposal companies to reduce pollution on his investment in a waste management company. What type of risk is he concerned with?

16) The subscription price of a right is:

17) A testimonial by a compensated expert must include which of the following?

1. A statement detailing the expert’s credentials
2. A statement that past performance is not a guarantee of future performance
3. A statement that the individual is a compensated spokesperson
4. The name of the principal who approved the ad

18) Which of the following is true?

19) A couple in their early thirties plans to purchase a new home in the next two years and has saved $40,000. What would you most likely recommend?

20) A bearish investor would establish a short position by entering what type of order?

21) During registration of a new issue, false information is included in the prospectus to buyers. Which of the following may be held liable to investors?

1. Officers of the issuer
2. Accountants
3. Syndicate members
4. People who signed the registration statement

22) Which of the following are bearish?

1. Call seller
2. Put seller
3. Call buyer
4. Put buyer

23) An investor buys 10 XYZ Nov 75 calls at 4.10 on Monday, May 11. The trade will settle on:

24) You sold 10 IBM May 95 puts at 5.70. Your maximum gain is:

25) The SEC has been reviewing a company’s registration statement and would like clarification on a few items. It would most likely:

26) Once a company decides to raise long-term capital to meet its needs, it will:

27) An investor with a conservative attitude towards investing seeks to invest $50,000 into an interest-bearing instrument that will provide current income and safety. Which would you most likely recommend?

28) An investor who may lose part or all of his investment is subject to which of the following?

29) Which of the following is NOT a type of underwriting commitment?

30) A syndicate may enter a stabilizing bid:

31) Which of the following subjects the investor to unlimited risk?

32) FINRA has taken disciplinary action against a member. The decision of the Department of Enforcement becomes final in:

33) During a new issue registration, false information is included in the prospectus to buyers. Which of the following may be held liable to investors?

1. Officers of the issuer
2. Accountants
3. Syndicate members
4. People who signed the registration statement

34) Your brokerage firm acts as a market maker for several high-volume stocks that are quoted on the Nasdaq. What is the firm’s consideration for being a market maker?

35) A firm has been taken to arbitration by a customer. The disputed amount is $47,400. Which of the following is true?

36) The OCC is:

37) A customer wants to sell a large position in GJH, a thinly traded stock that has remained flat. The customer is most subject to which of the following?

38) A syndicate distributing a new issue of common stock contains 9 syndicate members and 12 selling group members. The stock will be listed on the Nasdaq. How many bids may be entered for the syndicate?

39) In the securities industry, which of the following is the ultimate industry authority regulating conduct?

40) A company doing a preemptive right offering would most likely use what type of underwriting agreement?

41) A FINRA member has failed to receive a stock certificate in good form from the selling FINRA firm. Which FINRA bylaw defines good delivery?

42) A syndicate has published a tombstone ad prior to an issue becoming effective. Which of the following must appear in the tombstone?

1. A statement that the registration has not yet become effective
2. A statement that the tombstone ad is not an offer to sell the securities
3. Contact information
4. A no commitment statement

43) A red herring given to a client during the cooling-off period will contain all of the following, EXCEPT:

44) Which of the following are true about an option?

1. It is a contract between two parties that determines the time and place at which a security may be bought or sold.
2. The two parties are known as the buyer and the seller. The money paid by the buyer of the option is known as the option’s premium.
3. The buyer has bought the right to buy or sell the security depending on the type of option.
4. The seller has an obligation to perform under the contract, possibly to buy or sell the stock depending on the option involved.

45) Your customer sells 10 IBM Nov 95 puts to open at 3.15. Their maximum gain is:

46) A bullish investor would enter which of the following orders?

47) The inside market is:

1. Highest offer
2. Lowest offer
3. Highest bid
4. Lowest bid

48) Your brokerage firm has placed an ad in the local newspaper. How long must the firm maintain the ad?

49) Sanctions imposed by FINRA are effective within how many days of a written decision?

50) A long-term growth fund has a portfolio turnover ratio of 25%. How often does the fund replace its total holdings?

51) Which of the following is NOT a violation of the rules of conduct?

52) A member of the selling group assisting in the distribution of securities in an undivided syndicate is:

53) All of the following are types of orders, except:

1. All or none
2. Fill or kill
3. Mini/maxi
4. Best efforts

54) According to Rule 135, which of the following is NOT true regarding generic advertising?

55) An investor seeking a risk-free investment should consider:

56) Which of the following is an associated person of a member firm?

1. Registered representative
2. Trader
3. Director
4. Manager

57) An investor seeking some current income would most likely invest in which of the following?

58) The Securities Exchange Act of 1934 regulates which of the following markets?

59) A firm participating in the offering of a private placement may sell the private placement to:

60) A syndicate has published a tombstone ad prior to the issue becoming effective. Which of the following must appear in the tombstone?

1. A statement that the registration has not yet become eective.
2. A statement that the ad is not an oer to sell the securities.
3. Contact information.
4. No commitment statement

61) Creating false activity in a security to attract new purchases is a fraudulent practice known as:

62) A new investor in the 15% tax bracket is seeking additional current income. Which of the following would you recommend?

63) As it relates to a member firm conducting business with the public, all of the following are violations, EXCEPT:

64) ABC Technologies, a very volatile stock, closes at $180 per share. Your customer has placed an order to sell 500 ABC at 165 stop limit 160 GTC. After the close, the company announces bad earnings, and the stock opens at 145. What happened to your customer’s order?

65) Which act gave the NASD (now part of FINRA) the authority to regulate the OTC market?

66) Corporations may do all of the following, EXCEPT:

67) An investor buys 10 XYZ May 70 calls at 3.10 when XYZ is at 68. At expiration, the stock is at 77 and the investor closes out the position at its intrinsic value. What is the profit or loss?

68) Which of the following is NOT a type of offering?

69) FINRA’s gift rule applies to all of the following, EXCEPT:

70) FINRA considers which of the following to be retail communication?

1. Video displays
2. Listings in phone directories
3. Circulars
4. Telemarketing scripts

71) How would an investor who has held a long stock position for six months end her holding period?

1. Sell an at-the-money call
2. Sell a put
3. Sell a deep in-the-money call
4. Purchase a put

72) At a member firm, which of the following must be registered?

73) An investor gets advance notice of a research report being issued and enters an order to purchase the security that is the subject of the report. This is known as:

74) An investor most concerned with changes in interest rates would least likely purchase which of the following?

75) During an underwriting of a hot issue, the syndicate exercises its greenshoe provision. This will allow them to buy an additional: