FREE SIE Exam Practice Test 2025 Official Study Guide [PDF]

Last Updated on January 16, 2025

FREE SIE Exam Practice Test 2025 Official Study Guide [PDF]What Is the SIE Exam, Anyway? Initially, the SIE (Securities Industry Essentials) exam information was included in books that covered Series 6, Series 7, Series 22, and so on. The Financial Industry Regulatory Authority’s (FINRA) idea was to strip similar information from these exams and create the SIE exam.

I’ve found that besides stripping the information from these other exams, unfortunately for you and other exam takers, FINRA added a lot more information. This means you will have to study a lot of information to answer 75 randomized questions.

Table of Contents

SIE Exam Practice Test 2025

Time yourself to know how much time you have left to complete the exam. One way to do so is to figure out which question you must be up to at the end of each 15 minutes; use that as a benchmark to keep track of your progress. You have one hour and 45 minutes to complete the exam.

SIE Exam Practice Test (Quiz)

1 / 60

1) Which of the following could trade in the money market?

A) (A) Short-term equity

B) (B) Newly issued corporate bonds

C) (C) Newly issued options contracts

D) (D) A Treasury note issued nine years ago

2 / 60

2) An ABC corporate bond is quoted at 110 and is convertible into ABC common at 20 per share. The parity price for the stock is:

A) (A) 21

B) (B) 22

C) (C) 23

D) (D) 24

3 / 60

3) All of the following are reasons a corporation would attach a warrant to their bond, except to:

A) (A) Save money

B) (B) Make the bond more attractive

C) (C) Increase the number of shares outstanding when the warrants are exercised

D) (D) Lower the coupon

4 / 60

4) Authorized stock is all of the following, except:

A) (A) The maximum number of shares a company may sell

B) (B) Arbitrarily determined at the time of incorporation and may not be changed

C) (C) May be sold in total or in part when the company goes public

D) (D) Sold to investors to raise operating capital for the company

5 / 60

5) An investor purchased a treasury bond at 95.03. How much did he pay for the bond?

A) (A) $9,530.00

B) (B) $9,500.9375

C) (C) $950.9375

D) (D) $953.00

6 / 60

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

A) (A) Thursday, May 14

B) (B) Tuesday, May 12

C) (C) Monday, May 11

D) (D) Monday, May 18

7 / 60

7) An investor has purchased shares of a foreign company through an ADR. Which of the following is not true?

A) (A) The ADR may represent one or more shares of the company’s common stock.

B) (B) The dividend will be paid in U.S. dollars.

C) (C) The investor may elect to exchange the ADR for the underlying common shares.

D) (D) The investor is subject to currency risk.

8 / 60

8) Which type of bonds require the investor to deposit coupons to receive their interest payments but have the owner’s name recorded on the books of the issuer?

A) (A) Registered bonds

B) (B) Bearer bonds

C) (C) Book entry/journal entry bonds

D) (D) Principal-only bonds

9 / 60

9) If a 5% stock dividend is paid to an investor who owns 800 shares of stock already, the investor will receive how many shares?

A) (A) 4 shares

B) (B) 8 shares

C) (C) 40 shares

D) (D) 80 shares

10 / 60

10) Collateral trust certificates use which of the following as collateral?

A) (A) Real estate

B) (B) Mortgage

C) (C) Stocks and bonds issued by the same company

D) (D) Stocks and bonds issued by another company

11 / 60

11) As the owner of a cumulative preferred stock, an investor would have all of the following rights, except:

A) (A) Voting if dividends are missed for a significant period of time

B) (B) Right to receive past dividends not paid by the corporation

C) (C) Right to exchange the preferred for the underlying common shares

D) (D) The right to receive the past dividends before common holders receive a dividend

12 / 60

12) All of the following indicate a downturn in the business cycle, except:

A) (A) Rising inventories

B) (B) High consumer debt

C) (C) Falling inventories

D) (D) Falling stock prices

13 / 60

13) The Federal Reserve Board sets all of the following except:

A) (A) Monetary policy

B) (B) Reserve requirement

C) (C) Governmental spending

D) (D) Discount rate

14 / 60

14) Which one of the following interest rates is controlled by the Federal Reserve Board?

A) (A) Prime rate

B) (B) Federal funds rate

C) (C) Broker call loan rate

D) (D) Discount rate

15 / 60

15) All of the following are true regarding the Federal National Mortgage Association (Fannie Mae) except:

A) (A) It purchases mortgages and packages them to create mortgage-backed securities that pay interest semiannually.

B) (B) It provides an investment free of federal, state, and local taxes.

C) (C) It is a public for-profit corporation.

D) (D) Its purpose is to earn a profit by providing mortgage capital.

16 / 60

16) 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?

A) (A) $7,000 profit

B) (B) $7,000 loss

C) (C) $3,100 loss

D) (D) $3,900 profit

17 / 60

17) An investor would expect to realize the largest capital gain by buying bonds that are:

A) (A) Long term when rates are high

B) (B) Short term when rates are low

C) (C) Short term when rates are high

D) (D) Long term when rates are low

18 / 60

18) Your customer buys a U.S. T-bond at 103.16. How much did he pay for the bond?

A) (A) $1,031.60

B) (B) $103.16

C) (C) $1,035.00

D) (D) $10,316.00

19 / 60

19) An investor owns 100 shares of XYZ 8% participating preferred stock. XYZ’s common stock pays a quarterly dividend of $0.25. How much will the investor earn each year in dividends?

A) (A) $825

B) (B) $90

C) (C) $180

D) (D) $900

20 / 60

20) A mutual fund investor has 500 shares of XYZ growth fund, which has an NAV of 22.30 and a POP of 23.05. The investor wants to invest the money in the biotech fund offered by XYZ, which has an NAV of 17.10 and a POP of 18. If XYZ offers conversion privileges, how many shares will the investor be able to purchase of the biotech fund?

A) (A) 652

B) (B) 619

C) (C) 640

D) (D) 605

21 / 60

21) The maximum duration for a piece of commercial paper is:

A) (A) 45 days

B) (B) 10 years

C) (C) 1 year

D) (D) 9 months

22 / 60

22) During an inflationary period, the price of which one of the following will fall the most?

A) (A) Preferred stock

B) (B) Treasury bills

C) (C) Treasury bonds

D) (D) Common stock

23 / 60

23) A mutual fund’s custodian bank does which of the following?

A) (A) Holds customer’s securities

B) (B) Cancels certificates

C) (C) Maintains records for accumulation plans

D) (D) Issues certificates

24 / 60

24) All of the following benefit an investor, except:

A) (A) Combination privileges

B) (B) Emergency withdrawal privileges

C) (C) Breakpoint sale

D) (D) Form 1099

25 / 60

25) An investor buys 100 shares of XYZ 7% convertible preferred stock, which is convertible into XYZ common stock at $20 per share. How many shares of common stock upon conversion?

A) 5

B) 400

C) 500

D) 5,000

26 / 60

26) An investor buys a 10% preferred stock at 110. What is their current yield?

A) 10.4%

B) 9.1%

C) 10%

D) 9.5%

27 / 60

27) ABC common stock has declined dramatically in value over the last quarter, but the dividend it has declared for payment this quarter has remained the same. The dividend yield on the stock has:

A) Not changed because the board has to declare the dividend amount

B) Gone down because the yield is a stated rate

C) Gone up as the price of ABC has fallen

D) Been fixed at the time of issuance

28 / 60

28) Which bonds are issued as a physical certificate without the owner’s name on them and require whoever possesses these bonds to clip the coupons to receive their interest payments and to surrender the bond at maturity in order to receive the principal payment?

A) (A) Registered bonds

B) (B) Book entry/journal entry bonds

C) (C) Principal-only registered bonds

D) (D) Bearer bonds

29 / 60

29) Common dividends are all of the following except:

A) (A) A portion of the earnings of the company

B) (B) A source of income for the investor

C) (C) Generally paid quarterly

D) (D) A figure determined by subtracting the current yield from the current market price

30 / 60

30) An investor buys $10,000 of 10% corporate bonds with 5 years left to maturity. The investor pays 120 for the bonds. What is the investor's current yield?

A) (A) 5.45%

B) (B) 8.33%

C) (C) 6%

D) (D) 9.2%

31 / 60

31) An investor has purchased 10 corporate bonds at a price of 135. At the end of the day, the bonds are quoted at 136.25. How much have the bonds risen in dollars?

A) (A) $125

B) (B) $12.50

C) (C) $1.25

D) (D) $0.125

32 / 60

32) It may be necessary for a company to repurchase some of its stock, to increase its treasury stock, for which one of the following reasons:

A) (A) To maintain control of the company

B) (B) To allow the company to pay out smaller dividends

C) (C) To increase the funding in the company’s treasury

D) (D) To reassure its investors that all is well

33 / 60

33) Common stockholders do not have the right to vote on which of the following issues?

A) (A) Election of the board of directors

B) (B) Stock splits

C) (C) Issuance of additional common shares

D) (D) Bankruptcy

34 / 60

34) Which of the following are bearish?

Call seller
Put seller
Call buyer
Put buyer

A) (A) II and III

B) (B) II and IV

C) (C) I and IV

D) (D) I and II

35 / 60

35) A corporation may pay a dividend in which of the following ways?

A) Stock

B) Cash

C) Stock of another company

D) All of the above

36 / 60

36) All of the following are rights of common stockholders, except:

A) Right to elect the board of directors

B) Right to vote for executive compensation

C) Right to vote for a stock split

D) Right to maintain their percentage of ownership in the company

37 / 60

37) An investor with $20,000 invested in the XYZ growth fund is:

A) (A) A stockholder in XYZ

B) (B) An owner of XYZ

C) (C) An owner of an undivided interest in the XYZ growth portfolio

D) (D) Both an owner of XYZ and an owner of an undivided interest in the XYZ growth portfolio

38 / 60

38) Which of the following is not true regarding American Depositary Receipts (ADRs)?

A) They are receipts of ownership of foreign shares being held abroad in a U.S. bank.

B) Each ADR represents 100 shares of foreign stock, and the ADR holder may request delivery of the foreign shares.

C) ADR holders have the right to vote and to receive dividends that the foreign corporation declares for shareholders.

D) The foreign country may issue restrictions on the foreign ownership of stock.

39 / 60

39) All qualified dividends for ordinary income earners are:

A) Taxed as ordinary income each year

B) Tax-free income

C) • Taxed as special interest-free income

D) Taxed at a set rate of 15%

40 / 60

40) A bank with a shortfall meeting their reserve requirement could borrow money from another bank and pay the:

A) (A) Federal funds rate

B) (B) Broker call loan rate

C) (C) Prime rate

D) (D) Discount rate

41 / 60

41) The government has two tools it can use to try to influence the direction of the economy; they are:

A) (A) Monetary policy and fiscal policy

B) (B) Prime rate policy and fiscal policy

C) (C) Monetary policy and prime rate policy

D) (D) Fiscal policy and money market policy

42 / 60

42) Which of the following is NOT true of money market instruments?

A) (A) They are highly liquid fixed-income securities.

B) (B) They are issued by corporations with high credit ratings and are thus considered safe.

C) (C) They are considered risky because of the short-term maturities.

D) (D) They are a method used to obtain short-term financing.

43 / 60

43) Which of the following issues standardized options?

A) (A) Exchanges

B) (B) OCC

C) (C) Company

D) (D) Nasdaq

44 / 60

44) Fiscal policy is controlled by:

President
FOMC
Congress
FRB

A) (A) I and IV

B) (B) I and II

C) (C) II and IV

D) (D) I and III

45 / 60

45) When is interest on a T-bill paid?

A) (A) At maturity

B) (B) Annually

C) (C) Quarterly

D) (D) Monthly

46 / 60

46) A no-load mutual fund may charge a 12B-1 fee that is:

A) (A) Up to 0.25% of the NAV

B) (B) Less than 0.25% of the NAV

C) (C) Up to 0.25% of the POP

D) (D) Less than 0.25% of the POP

47 / 60

47) The money market is a place where issuers go to:

A) (A) Obtain long-term financing.

B) (B) Obtain short-term financing.

C) (C) Offer higher interest rates for a higher yield.

D) (D) Exchange money market instruments to their mutual benefit.

48 / 60

48) A decline in the GDP must last at least how long to be considered a recession?

A) (A) Two quarters

B) (B) One quarter

C) (C) Six quarters

D) (D) Four quarters

49 / 60

49) An investor holding an 8% subordinated debenture will receive how much at maturity?

A) (A) $1,000

B) (B) $1,080

C) (C) $1,040

D) (D) Depends on the purchase price

50 / 60

50) Economic theories believe all of the following to be true, except:

A) (A) As supply rises, prices tend to fall.

B) (B) As supply rises, prices tend to rise.

C) (C) A moderately increasing money supply promotes price stability.

D) (D) As demand rises, prices tend to rise.

51 / 60

51) In response to a customer’s request for information on how inflation will affect their return realized from their semiannual coupon payments, you would look at the:

A) (A) Real interest rate

B) (B) Adjusted interest rate

C) (C) Interest conversion rate

D) (D) Current interest rate

52 / 60

52) Which of the following may always trade in the money market?

A) (A) T-bond

B) (B) T-note

C) (C) ADR

D) (D) Bankers’ acceptance

53 / 60

53) The OCC is:

A) (A) Options Clearing Corporation

B) (B) Options Counseling Committee

C) (C) Options and Claims Corporation

D) (D) Options Clearing Committee

54 / 60

54) All of the following are bullish for the stock market, except:

A) (A) Falling taxes

B) (B) Increasing government spending

C) (C) Increasing money supply

D) (D) Increasing interest rates

55 / 60

55) An investor who buys a 7% cumulative preferred stock will receive semiannual dividends of:

A) (A) $7 per share

B) (B) 7% of the corporate profits

C) (C) $3.50 per share

D) (D) 3.5% of the corporate profits

56 / 60

56) The type of bond that is secured by real estate is called:

A) (A) Real estate trust certificates

B) (B) Mortgage bond

C) (C) Equipment trust certificates

D) (D) Collateral trust certificates

57 / 60

57) XYZ has 8% subordinated debentures trading in the marketplace at $120. They are convertible into XYZ common stock at $25 per share. What is the parity price of the common stock?

A) (A) 29

B) (B) 31

C) (C) 30

D) (D) 28

58 / 60

58) Which of the following is NOT a corporate money market instrument?

A) (A) Negotiable certificates of deposit

B) (B) Treasury bills

C) (C) Federal funds

D) (D) Commercial paper

59 / 60

59) Which one of the following debt securities pays interest?

A) (A) Commercial paper

B) (B) T-bill

C) (C) Industrial revenue bond

D) (D) Banker’s acceptance

60 / 60

60) Your customer wants to invest in a conservative income-producing investment and is inquiring about GNMAs. She wants to know the minimum dollar amount required to purchase a pass-through certificate. You should tell her:

A) (A) $1,000

B) (B) $10,000

C) (C) There is no minimum; you can invest almost any sum.

D) (D) $5,000

Your score is

You have to answer 85 questions (10 don’t count toward your score). This gives you roughly 1.23 minutes (1 minute and 13.8 seconds) to answer each question.

Start Sample Tests

SIE Exam

The SIE is an introductory-level exam designed to test your basic knowledge of the securities industry and is open to anyone age 18 or older. Fortunately, association with a securities firm is not required — individuals may take the SIE exam before or after being hired by a firm.

You will need to know certain terminology used in the securities industry, different securities products, how the market is structured and functions, different regulatory agencies and their purposes, and regulated and prohibited practices.

SIE Exam Details
Detail	Description
Exam Name	SIE (Securities Industry Essentials)
Number of Questions	75
Format	Multiple Choice
Duration	1 hour and 45 minutes
Passing Score	Passing score for the SIE is 70 (on a scale of 0 to 100)
Exam Cost	$80
Age Requirements	18 years or older
Citizenship	US and Others

Since unsponsored individuals are allowed to take the exam, you can take a step toward becoming a securities professional before being hired.

The exam aims to protect the investing public by ensuring that the individuals who sell or give information about securities have mastered the skills and general knowledge that competent practicing representatives need. The SIE exam is a computer-based exam given at Prometric (www.prometric.com/finra) test centers throughout the United States.

The 75-question exam, administered by the FINRA, is 105 minutes in duration. A 70 percent or better score gets candidates a passing grade and puts big smiles on their faces. After passing the SIE, the results remain valid for four years from the date you pass. Later in this chapter, the sections explain the setup of the SIE Exam and give a rundown of how to register for the exam.

SIE Exam Questions

The sections and question count are as follows:

Exam Topic Breakdown
Topic	Number of Questions	Percent of Exam
Knowledge of capital markets	12	16%
Understanding products and their risks	33	44%
Understanding trading, customer accounts, and prohibited activities	23	31%
Overview of the regulatory framework	7	9%
Total	75	100%

Each of these topics falls under multiple areas of study. For example, to correctly answer questions that address the topic of handling customer accounts, you have to know enough about different types of stocks, bonds, and so on to be able to guide your customers, including which investments are more beneficial to retirees and which work better for investors who are just entering the workforce.

Series 6: Investment Company and Variable Products Representative Exam

Most banks and insurance companies require Series 6 licenses. This license allows the holder to sell products such as mutual funds, variable annuities, and variable life insurance (along with having an insurance license).

Series 7: General Securities Representative Exam

Most people will take Series 7, the license exam required by most broker-dealers. Series 7 allows you to sell equity securities, mutual funds, bonds, direct participation programs, options, and more.

Series 22: DPP Representative Exam

If you’re planning on focusing your career on selling direct participation programs (DPPs), Series 22 is the one for you. This license allows you to solicit and sell limited partnership interest in DPPs like real estate programs, oil and gas programs, equipment leasing programs, and so on.

Series 57: Securities Trader Exam

The Series 57 license allows holders to execute trades in securities. Typically, a Series 57––licensed individual works in the trading department, executing trades for individuals or firms.

Series 79: Investment Banking Representative Exam

The Series 79 Investment Banking Representative exam allows holders to work in the investment banking realm. As such, the holders’ functions may include advising or facilitating equity or debt securities offerings through public offerings, private placements, and mergers and acquisitions.

Series 82: Private Securities Offerings Representative Exam

If you’re planning on selling securities privately rather than publicly, the Series 82 exam is the one you’ll need to pass. It tests your knowledge of the functions of a private securities offerings rep, including the solicitation and sale of Regulation D private placement securities as part of a primary offering.

Series 7 + Series 86 + Series 87: Research Analyst Exam

If you love taking exams, this is the one for you. You have to pass the SIE exam, the Series 7, Series 86, Series 87, and either the Series 63 or Series 66 — yikes! However, if you want to be a research analyst, this is the route you’ll need to go. A research analyst must prepare written and/or electronic communications that analyze company securities and industry sectors.

Series 99: Operations Professional Exam

Persons with a Series 99 license have proved that they have the knowledge needed to perform the critical functions of an operations professional. As such, their functions include client onboarding (welcoming new clients, addressing client concerns, making sure clients understand services available to them, and so on), receipt and delivery of securities and funds, account transfers, reinvestment and disbursement of funds, and so on.

SIE Exam Official Study Guide

Practice Test

Frequently Asked Questions

Securities Industry Essentials (SIE) Exam Content Outline

To see the complete outline of what is covered, go to www.finra.org

If you have other questions, contact the FINRA Support Team at 240-386- 4040 or visit www.finra.org/industry/qualification-exams.