SIE Exam Full Test 75 Questions Answers 2023

The par value of a common stock is

Tender offers typically __________ the price of the outstanding shares of a corporation

Which of the following ARE TRUE about ADRs?
I. They are receipts for foreign securities in U.S. markets.
II. Dividends are paid in the foreign currency.
III. Investors do not receive the actual stock certificates.
IV. They are non-negotiable

Perry Payday owns 1,200 shares of ABCD Corporation common stock. ABCD announces a 1 for 2 reverse split. If the price of ABCD closed at $10 the day prior to the split, what would Perry’s position be after the split?

An investor purchased 200 shares of DDD common stock at $41 per share. DDD previously announced a 5 percent stock dividend payable to shareholders of record. On the date prior to the ex-dividend date, DDD closed at $44 per share. What would be the investor’s position on the ex-dividend date?

WXY Corporation common stock closed at $45 on the business day prior to the ex-dividend date. If WXY previously announced a 77-cent dividend, at what price will the stock open the next trading day?

A corporation has issued 6% $100 par cumulative preferred stock. It paid $4 in dividends the first year and $3 in dividends the second year. If the corporation wants to declare a dividend for common shareholders the following year, how much must the company pay per share to preferred stockholders?

Which of the following preferred stocks would most likely pay the highest dividend if issued by the same corporation?

Rights are automatically received by

Which of the following is/are TRUE of warrants?

Jane Q. Investor purchased 100 AA rated bonds issued by COW Corp. Jane purchased the bonds at 105 percent of par value, and they are currently trading in the market at 104. If the coupon rate is 7½ percent, how much annual interest does Jane receive?

Jon Bearishnikoff is a 62-year-old investor who has 50 percent of his portfolio invested in common stock of up-and-coming companies. The other 50 percent of his portfolio is invested in a variety of stocks of more secure companies. Jon would like to start investing in bonds. If Jon’s main concern is the safety of his investment, which of the following bonds would you LEAST likely recommend?

Monique Moneybags purchased one XYZ convertible mortgage bond at 105. Two years later, the bond is trading at 98. If the coupon rate of the bond is 6%, what is the current yield of the bond?

Place the following Standard & Poor’s bond ratings in order from highest to lowest.

I. A+
II. AA
III. A–
IV. BBB+

Issuers would call their bonds when interest rates

ABCD convertible bonds are convertible into 25 shares of common stock. If the stock trades at 36, what is the parity price of the bond?

SNK Surfboard Company wants to import boogie boards from an Italian manufacturer in Sicily. SNK would use which of the following money market instruments to finance the importing of the boogie boards?

A corporate bond indenture includes which of the following?
I. The coupon rate
II. The maturity date
III. Par value
IV. Any collateral securing the bond

Mike Smith has 100 DEF corporate bonds with a coupon rate of 4½ percent. The bonds were purchased at 98 percent of $1,000 par each. How much interest will Mike receive the next time he gets paid?

Which of the following types of corporate bond issues is most likely to have a sinking fund?

All of the following are types of secured bonds EXCEPT

Which of the following is the formula that determines the current yield of a bond?

Melissa R. Corporation has issued $6 million dollars’ worth of 30-year callable bonds with a par value of $1,000, a coupon rate of 5¼%, and 7 years call protection. Melissa R. Corporation would least likely call the bonds when interest rates are generally.

Which of the following are possible maturities for a U.S. Treasury bill?

I. 4 weeks
II. 8 weeks
III. 16 weeks
IV. 26 weeks

Which of the following U.S. government securities has interest payments that vary according to inflation or deflation?

Which of the following securities are money market instruments?
I. Banker’s acceptances
II. T-bills
III. Commercial paper
IV. Treasury notes

Which of the following are direct obligations of the U.S. government?

I. T-bills
II. GNMA
III. FNMA
IV. T-strips

How frequently will a mutual fund with a turnover ratio of 20% replace its total holdings?

All but which of the following are considered securities under the Uniform Securities Act?

When a bond is selling at a premium to par, the yield to maturity (YTM) will always be __________ the bond’s coupon rate. If a bond is selling at a discount to par, the YTM will always be __________ the bond’s coupon rate.

Which of the following elements of FINRA’s Continuing Education Program focuses on compliance, ethical, and sales practice standards? Its content is derived from industry rules and regulations, and accepted standards and practices in the industry.

Which of the following imposed an obligation on the SEC to consider the impacts that any new regulation would have on competition, and empowered the SEC to establish a national market system and a system for nationwide clearing and settlement of securities transactions?

Congress has provided which of the following entities with the power to supervise self-regulatory organizations (SROs) as a matter of public interest?

Which of the following is required by the IRS if a taxpayer uses the substantially equal periodic payment (SEPP) exception to the premature distribution penalty?

Which of the following is a person who, for compensation, makes recommendations regarding securities, manages client accounts, and determines which advice regarding securities should be given?

A long stock position is considered __________, and a short stock position is considered __________.

Pete, an elderly business owner, is interested in establishing a retirement plan that will provide the greatest retirement benefit to himself. Which of the following plans should Pete select?

The S&P index has __________ risk.

Which of the following mutual fund share classes will charge investors a back-end load?

Which of the following provides an exemption from registration for public offerings and includes two offering tiers (Tier 1 and Tier 2)?

Which of the following is a requirement in which financial institutions need to verify the identity of individuals wishing to conduct financial transactions with them?

Which of the following forms of ownership allows an investor to own securities without a certificate?

Which of the following has the mission of protecting investors, municipal entities, and the public interest by promoting a fair and efficient municipal market, regulating firms that engage in municipal securities and advisory activities, and promoting market transparency?

Which of the following projects are MORE likely to be financed by general obligation bonds than revenue bonds (discussed later in this chapter)?
I. New municipal hospital
II. Public sports arena
III. New junior high school
IV. New library

Rank the following municipal bonds in order from safest to riskiest.
I. Revenue bonds
II. Moral obligation bonds
III. Public housing authority bonds
IV. Industrial development revenue bonds

Mrs. Stevenson is an investor who is in the 30-percent tax bracket. Which of the following securities would provide Mrs. Stevenson with the BEST after-tax yield?

According to FINRA Rule 3240, which of the following is correct regarding borrowing and lending arrangements between a Registered Investment Advisor and its customers?

Which of the following investments will provide tax-exempt interest if the proceeds are used to pay for qualifying education expenses?

(1) FNMA funds
(2) Series EE bonds
(3) Treasury bonds
(4) Treasury bills

Which of the following type of bond is unregistered, with no record kept regarding the owner or transactions involving ownership?

Which of the following is/are correct regarding liquidity and marketability?
(1) Liquidity is the ability to sell or redeem an investment quickly and at a known price without incurring a significant loss of principal.
(2) Marketability is the speed and ease with which an investment may be bought or sold.

Which of the following are among the criteria to be an “accredited investor”?

All but which of the following are characteristics of American Depository Receipts (ADRs)?

Which of the following accurately describes the difference between rights and warrants?

(1) A warrant may be attached to new debt or preferred issues to make the issues more attractive to buyers.
(2) Rights and warrants have different lifespans.
(3) Warrants usually expire within a few weeks.
(4) Rights may continue without expiring for up to several years.

Which of the following is the governing body of FINRA, which oversees the administration of its affairs and the promotion of its welfare, objectives, and purposes?

Which of the following municipal securities could have a rating of MIG 2?
I. PN
II. Tax-exempt commercial paper
III. TRAN
IV. IDR

Which of the following is NOT TRUE about general obligation bonds?

A municipal securities broker-dealer sells 100 GO bonds to a customer on a principal basis. How much of a markup may the broker-dealer charge?

Which of the following documents include all relevant information about a municipal issuer?

A special assessment bond is backed by

According to MSRB rules, brokerage firms must keep all municipal securities advertising
I. for a minimum of 3 years
II. for a minimum of 6 years
III. easily accessible for a minimum of 1 year
IV. easily accessible for a minimum of 2 years

Municipal bonds issued by each of the following would be triple tax-free EXCEPT

Municipal bonds settle the regular way in

Under MSRB rules, how often must broker-dealers and municipal securities dealers send out investment brochures to their customers stating that they are registered with the SEC and MSRB?

According to MSRB rules, which of the following are considered forms of advertising?

I. Market letters
II. Seminar text
III. Official statements
IV. Offering circulars

What is the taxable equivalent yield for an investor purchasing a 5% municipal bond if she’s in the 24% tax bracket?

All of the following are types of municipal notes EXCEPT

Which of the following IS NOT a type of municipal fund security?

All things being equal, which of the following municipal bonds would most likely have the lowest coupon rate?

Under MSRB rules, all syndicates must establish an allocation of orders, which states which orders are to be filled first. Place the typical allocation of orders in order from first to be filled to last to be filled.
I. member
II. designated
III. syndicate
IV. presale

Preferred stock that does not have to pay missed dividends is considered which of the following?

Which of the following rules permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time?

Which of the following is/are correct regarding a flat yield curve?
(1) It generally indicates an economic slowdown.
(2) It occurs when there is little difference between short-term and long-term yields for debt instruments of the same credit quality.

Which of the following SEC regulations requires firms to have policies and procedures addressing the protection of customer information and records? This regulation also requires firms to provide initial and annual privacy notices to customers describing information sharing policies.

According to the Telephone Consumer Protection Act, solicitors are prohibited from calling residences before __________ and after __________ local time.

Which of the following describes the illegal practice of excessive buying and selling of securities in a customer’s account without considering the customer’s investment goals? Its primary goal is to generate commissions that benefit the broker.