SIE FINRA EXAM PACKAGE EXAM
SCRIPT 2026 QUESTIONS WITH
ANSWERS GRADED A+
◉ Primary Distribution. Answer: Sale of a new issue of stocks or
bonds, as distinguished from a SECONDARY DISTRIBUTION, which
involves previously issued stock.
◉ Secondary Distribution. Answer: Public sale of previously issued
securities held by large investors, as distinguished from a NEW ISSUE
or PRIMARY DISTRIBUTION, where the seller is the issuing
corporation.
◉ How often must firm send account statements. Answer: Quarterly
◉ Systematic Risk (Market Risk). Answer: risk that is inherent in the
macro economy and cannot be eliminated through diversification
◉ Non-systematic risk. Answer: risk that can be eliminated by
diversification
◉ When is interest on Treasury notes paid?. Answer: Semiannually
,◉ How long is a customers letter of intent on a mutual fund
purchase valid for?. Answer: 13 months
◉ Which is adversely impacted if the issuer's credit rating is
downgraded?. Answer: ETN's
◉ Exchange Traded Notes (ETNs). Answer: are debt instruments in
which the issuer promises to pay a return based on the performance
of a specific debt index after deducting specified fees.
◉ Exchange Traded Fund (ETF). Answer: Collections of stocks and
bonds that are traded on securities exchanges, but are traded more
like individual stocks than mutual funds.
◉ Which debt security issues in one year or less?. Answer: Money
market instruments
◉ Money Market Instruments. Answer: debt obligations of large
corporations and governments with an original maturity of one year
or less (treasury bills, federal funds and repurchase agreements,
commercial paper, negotiable certificates of deposit, banker's
acceptances)
◉ US Gov Agency Issues are exempt from. Answer: Registration
under securities act of 1933
, ◉ 529 plan. Answer: A savings plan operated by a state or
educational institution designed to help families set aside funds for
future college costs. Potential deductions from state taxes
◉ Advantage of index funds. Answer: Lower management fees due
to passive management of the fund
◉ Bid and Ask. Answer: A pair of prices, where "bid" is the price at
which a trader is prepared to buy and "ask" is the price at which the
trader is prepared to sell the security (note that "ask" is sometimes
referred to as "offer").
◉ Why may no load funds have lower expense ratios than load
funds?. Answer: Not permitted to charge a 12b-1 fee greater than 25
basis points
◉ 12b-1 fees. Answer: annual fees charged by a mutual fund to pay
for marketing and distribution costs
◉ Broker-Dealer (BD). Answer: A person or firm in the business of
buying and selling securities. A firm may act as both broker (agent)
and dealer (principal), but not in the same transaction.
Broker/dealers normally must register with the SEC, the appropriate
sros, and any state in which they do business. Related item(s): agent;
broker; dealer; principal.
SCRIPT 2026 QUESTIONS WITH
ANSWERS GRADED A+
◉ Primary Distribution. Answer: Sale of a new issue of stocks or
bonds, as distinguished from a SECONDARY DISTRIBUTION, which
involves previously issued stock.
◉ Secondary Distribution. Answer: Public sale of previously issued
securities held by large investors, as distinguished from a NEW ISSUE
or PRIMARY DISTRIBUTION, where the seller is the issuing
corporation.
◉ How often must firm send account statements. Answer: Quarterly
◉ Systematic Risk (Market Risk). Answer: risk that is inherent in the
macro economy and cannot be eliminated through diversification
◉ Non-systematic risk. Answer: risk that can be eliminated by
diversification
◉ When is interest on Treasury notes paid?. Answer: Semiannually
,◉ How long is a customers letter of intent on a mutual fund
purchase valid for?. Answer: 13 months
◉ Which is adversely impacted if the issuer's credit rating is
downgraded?. Answer: ETN's
◉ Exchange Traded Notes (ETNs). Answer: are debt instruments in
which the issuer promises to pay a return based on the performance
of a specific debt index after deducting specified fees.
◉ Exchange Traded Fund (ETF). Answer: Collections of stocks and
bonds that are traded on securities exchanges, but are traded more
like individual stocks than mutual funds.
◉ Which debt security issues in one year or less?. Answer: Money
market instruments
◉ Money Market Instruments. Answer: debt obligations of large
corporations and governments with an original maturity of one year
or less (treasury bills, federal funds and repurchase agreements,
commercial paper, negotiable certificates of deposit, banker's
acceptances)
◉ US Gov Agency Issues are exempt from. Answer: Registration
under securities act of 1933
, ◉ 529 plan. Answer: A savings plan operated by a state or
educational institution designed to help families set aside funds for
future college costs. Potential deductions from state taxes
◉ Advantage of index funds. Answer: Lower management fees due
to passive management of the fund
◉ Bid and Ask. Answer: A pair of prices, where "bid" is the price at
which a trader is prepared to buy and "ask" is the price at which the
trader is prepared to sell the security (note that "ask" is sometimes
referred to as "offer").
◉ Why may no load funds have lower expense ratios than load
funds?. Answer: Not permitted to charge a 12b-1 fee greater than 25
basis points
◉ 12b-1 fees. Answer: annual fees charged by a mutual fund to pay
for marketing and distribution costs
◉ Broker-Dealer (BD). Answer: A person or firm in the business of
buying and selling securities. A firm may act as both broker (agent)
and dealer (principal), but not in the same transaction.
Broker/dealers normally must register with the SEC, the appropriate
sros, and any state in which they do business. Related item(s): agent;
broker; dealer; principal.
