FINRA SIE Exam Questions and Answers Updated 2026

FINRA SIE Exam
Questions and Answers
Updated 2026
IfBinterestBRatesBfallBtheBissuerBwillBmostBlikelyBcallBwhichBbondsBfirst?B-
BAnswerHighBDividendBRateBpreferredBissuesBtradingBatBaBpremium



WhatBareBsomeBactionsBbyBaBcorporationBwillBaffectBanBindividualsBcommonBsharehold
er'sBequityB-BAnswerConversionBofBconvertibleBpreferredBstocksBorBbond

RepurchaseBofBcommonBsharesB

IssuanceBofBadditionalBcommonBsharesB



(StockBsplitsBdoBnotBeffectBshareholdersBequityBbutBitBmustBbeBvotedBonBbecauseBitBe
ffectsBParBValue)



BenefitsBtoBaBConvertibleBstockBcomparedBtoBaBregularBdebentureB-
BAnswerConvertibleBstockBwillBhaveBaBslightlyBlowerByieldBthanBnon-
convertibleBhoweverBitBwillBraiseBinBvalueBasBtheBmarketBpriceBofBcommonBstockBrises



WhatBtraitsBdoBpreferredBstockBandBbondsBhaveBinBcommon?BHowBareBtheyBdifferent?
B-
BAnswerCanBbeBcallableBbyBissuer,BbothBhaveBperiodicBpayments.BBothBareBseniorBsec
uritiesBtoBcommonBstock.B

NeitherBhaveBvotingBrights

PreferredBisBpaidBdividendsBonBaBpercentageBofBfaceBvalueBmuchBlikeBtheByieldBofBaB
bond.B

PreferredBstockBhasBnoBmaturityBdateBandBcanBbeBheldBperpetuallyBwhileBbondsBhave
BaBsetBmaturityBdate.B

PaymentsBtoBpreferredBstockBareBnotBmandatoryBunlessBaBdeclaredBdividendBhasBbeen
BissuedBtoBcommonBstockB

,PaymentsBtoBbondBholdersBareBmandatory



WhenBareBcommonBdividendsBdeclaredBandBpaid?B-BAnswerQuarterlyBforBboth



ABcustomerBownsB256BsharesBofBABCBcommonBstock.BABCBdeclaresBaBrightsBoffering,B
withBtheBtermsBbeingBthatBforBeveryB15BrightsBaBshareholderBmayBpurchaseBoneBaddit
ionalBshare.atB$24BaBshare.BAnyBfractionalBrightsBmayBbeBroundedBupBtoBbuyBanBaddi
tionalBshare.B

HowBmanyBsharesBmayBtheBcustomerBbuyBwithBtheseBright?B-
BAnswerABshareBholderBcanBbuyBaBmaximumBofB18BsharesBwithBtheseBrightsBpayingB$
432BforBthem.B



TheB17.06BsharesBmayBbeBroundedBupBtoB18.



XXYZBADRB(AmericanBDepositoryBReceipt)BrepresentsB10%BofBtheBvalueBofBanBXXYZBor
dinaryBshare.BTheBordinaryBsharesBtradeBonBtheBLondonBStockBExchange,BwhereBtheBc
urrentBpriceBisB400BBritishBPoundsB(BP).BTheBcurrentBexchangeBrateBforBtheBBritishBPo
undBagainstBtheBUSBDollarBisB$1.40.BTheBordinaryBshareBpaysBanBannualizedBdividendB
ofB12BBP.BTheBXXYZBADRBisBlistedBonBtheBNYSE.BIfBaBcustomerBplacesBanBorderBtoBbu
yB$560,000BofBtheBADRBonBtheBcustomerBwillBbuyBhowBmanyBsharesBofBtheBADR?B-
BAnswer10,000BSharesBwithB$560.,000B

ExplanationB



400BBPBxB$1.4B=B560



$560,000B/B560BBP/shareB=B10,000BSharesBofBXXYZ



PreferredBStockBmarketBvaluationBisBbasedBprimarilyBonBwhat?



PerformanceBofBstock?

Inflation?

, InterestBrates?B-
BAnswerInterestBRatesBisBtheBcorrectBanswer,BrememberBthatBpreferredBstockBisBmuch
BlikeBaBbondBinBthatBitBhasBfixedBpaymentsBandBisBconsideredBfixedBincome.B



LongBtermBmarketBinterestBrateBlevelsBdetermineBtheBvaluation.



RightsBare?B-BAnswerExerciserable,BNegotiableB(canBbeBtraded),BGiftable



DividendsBcanBbeBpaidBinBtheBformBof?B-BAnswerCashBorBproductsB

AdditionalBsharesBofBANOTHERBcompanyB(yesBanotherBcompany)B

AdditionalBsharesBofBthatBcompanyB



NOTBOptionsBandBNotBTaxBdeferments



PreferredBStockBis?B-BAnswerPerformanceBbased,Bparticipating,BcumulativeB(dividends)B



ItBisBnotBrefundableBorBredeemable



ABcorporateBbondBwhichBisBbackedBsolelyBbyBfullBfaithBandBcreditBofBtheBissuer..B-
BAnswerDebenture



TradesBofBallBofBtheBfollowingBwillBsettleBinBFedBFundsBExcept?



1)BUSBTreasuryBBonds

2)BTreasuryBBills

3)BPrimeBCommercialBPaper

4)BPrimeBBanker'sBAcceptancesB-
BAnswer3)BPrimeBcommercialBpaperBisBnotBtradedBbyBtheBFederalBReserveBthereforeBd
oesBnotBsettleBinBFedBFunds