SIE Practice Test [PDF]: Download the Securities Industry Essentials license Exam free printable PDF with review questions answers by Financial Industry Regulatory Authority (FINRA).
Don’t be fooled. Exam creators love to trip you up by making you jump ahead and answer the question — incorrectly — before you read the entire problem. Often one of the last words in the call (specific inquiry) of the question is worded in the negative, like “all of the following are true except,” or “which of the following is the least likely to,” and so on
SIE Practice Test
| Exam Name | SIE Practice Test 2024 |
| Number of Questions | 25 |
| Format | Multiple Choice |
| Duration | N/A |
| Passing Score: | passing score is 70 (on a scale of 0 to 100) |
| Printable PDF | Download Link is given below |
1. A trade surplus results from which of the following?
- (A) A country having a current account deficit.
- (B) A country exporting more than it imports.
- (C) A country exporting less than it imports.
- (D) None of the above are correct.
2. Which of the following agreements specify that any unsold securities are retained by the underwriters?
I. Firm commitment
II. All or none
III. Best efforts
IV. Mini-max
- (A) I only
- (B) II only
- (C) I, II, and IV
- (D) II, III, and IV
3. William, age 56, recently retired from Epsilon Inc., and would like to take a distribution from a retirement plan to pay for medical expenses. Which of the following plans would allow William to take a penalty free withdrawal?
- (A) Single premium deferred annuity
- (B) Traditional IRA
- (C) Money purchase plan from his employer before Epsilon Inc.
- (D) 401(k) from Epsilon Inc.
4. All but which of the following are characteristics of a REIT?
- (A) It is a publicly traded open-end investment company.
- (B) A mortgage REIT is a specific type of REIT.
- (C) A REIT can sell at a premium or discount to its NAV.
- (D) All of the above are correct.
5. All of the following are types of state securities registration EXCEPT:
- (A) filing
- (B) cooperation
- (C) qualification
- (D) coordination
6. Which of the following can an investor sign which allows him or her to receive breakpoint discounts based upon a commitment to buy a specified number of mutual fund shares over a period of time, usually 13 months?
- (A) Investment advisory contract
- (B) Investment memorandum
- (C) Letter of intent
- (D) Prospectus
7. An issuer is offering 1,000,000 shares of their common stock. 800,000 of the shares are from shares that have never been offered and 200,000 shares are treasury stock. What kind of offering is this?
- (A) An IPO
- (B) A primary offering
- (C) A secondary offering
- (D) A combined offering
8. Which of the following is a type of exchange rate system in which a country ties its currency to a basket of other currencies or to another measure of value, such as gold?
- (A) Adjustable exchange rate system
- (B) Commodity exchange rate system
- (C) Fixed exchange rate system
- (D) Variable exchange rate system
9. Which of the following will result if money distributed from a 529 plan is not used to pay for qualifying education expenses?
- (A) The gain is taxed at capital gains rates, and a 10% penalty is applied.
- (B) The gain is taxed at capital gains rates, and a 20% penalty is applied.
- (C) The gain is taxed as ordinary income, and a 10% penalty is applied.
- (D) The gain is taxed as ordinary income, and a 20% penalty is applied.
10. Which of the following are exempt transactions?
I. Private placements
II. Securities issued by the US government
III. Intrastate offerings
IV. Commercial paper
- (A) I and III
- (B) I, II, and IV
- (C) II and IV
- (D) I, II, III, and IV
11. An investor who believes that an economic recession is imminent should purchase which of the following type of stocks?
- (A) Defensive stocks because they tend to underperform during economic downturns.
- (B) Defensive stocks because they tend to outperform during economic downturns.
- (C) Cyclical stocks because they tend to outperform during economic downturns.
- (D) Cyclical stocks because they tend to underperform during economic downturns.
12. The trading volume for BBB Corporation for the previous 5 weeks is as follows:
March 31: 50,000 shares
March 24: 38,000 shares
March 17: 44,000 shares
March 10: 40,000 shares
March 3: 42,000 shares
BBB Corporaton is listed on an exchange and has 4,200,000 shares outstanding. What is the maximum number of shares an insider can sell under Rule 144 on April 4th of the following year?
- (A) 41,000
- (B) 42,000
- (C) 43,000
- (D) 44,000
13. Which of the following is/are correct regarding dividends paid by growth stocks and value stocks?
(1) Because they are growing and expanding, growth stocks typically do not pay large dividends.
(2) Most of the earnings generated from value stocks are reinvested back into the company.
- (A) (1) only
- (B) (2) only
- (C) Both (1) and (2) are correct.
- (D) Neither (1) or (2) are correct.
14. Bullbear Broker Dealer is offering an IPO that will not be on the NYSE, NASDAQ, or any exchange. How long after the effective date must Bullbear provide a final prospectus to all purchasers of the security?
- (A) 25 days
- (B) 40 days
- (C) 45 days
- (D) 90 days
15. Which of the following is a type of broker that acts as a liaison between an investor and a clearing corporation by helping to ensure that trades are settled appropriately and transactions are successfully completed?
- (A) Carrying broker
- (B) Clearing broker
- (C) Executing broker
- (D) Introducing broker
16. A preliminary prospectus would include which of the following?
I. An SEC disclaimer
II. The names of the officers of the issuing corporation
III. The public offering price
IV. An explanation of what the funds raised by the offering would be used for
- (A) I and IV
- (B) I, II, and IV
- (C) II, III, and IV
- (D) I, II, III, and IV
17. Which of the following forms must broker-dealers, investment advisers, or issuers of securities fill out in order to terminate the registration of an individual in the appropriate jurisdiction? It is also known as the Uniform Termination Notice for Securities Industry Registration.
- A. Form U4
- B. Form U5
- C. Form U6
- D. Form U7
18. Which of the following is an order to sell a stock at a price below the current market price?
- (A) Sell discount order
- (B) Sell limit order
- (C) Sell market order
- (D) Sell stop order
19. Which of the following was adopted to update short sale regulations and to address concerns regarding potentially abusive naked short selling?
- (A) Regulation BTR
- (B) Regulation HFT
- (C) Regulation NMS
- (D) Regulation SHO
20. The federal law which regulates the initial sale of stock to the public is:
- (A) the Securities Act of 1933
- (B) the Securities Exchange Act of 1934
- (C) the Trust Indenture Act of 1939
- (D) all of the above
21. Which of the following may not be included in a tombstone advertisement?
- (A) the number of securities to be sold
- (B) the issuer’s name
- (C) the final offering price
- (D) all underwriter’s name
22. Which of the following is a self-regulatory organization (SRO)?
- (A) FINRA
- (B) NYSE
- (C) SIPC
- (D) All of the above are correct.
23. Which of the following is the largest options exchange in the U.S., and focuses on options contracts for individual equities and indexes?
- (A) AMEX
- (B) CBOE
- (C) NASDAQ
- (D) NYSE
24. The cooling-off period usually lasts about:
- (A) 20 days
- (B) 30 days
- (C) 45 days
- (D) 90 days
25. Which of the following is the formula to calculate an investment’s real return?
- A. Real return = Nominal return – Inflation
- B. Real return = Nominal return + Inflation
- C. Real return = Nominal return ÷ Inflation
- D. Real return = Inflation ÷ Nominal return
Download SIE Practice Test PDF
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