SIE EXAM SECURITIES INDUSTRY BASICS
BREAKDOWN AND REVISION 2026
◉ The Investment Company Act of 1940 requires that certain
transactions use "forward pricing" (the valuation of mutual fund
share prices as of the next computation). Which of the following
transactions does NOT require "forward pricing"?
a. shares are purchased directly from the principal underwriter by
individual investors
b. shares are sold on behalf of an investor by the investor's broker-
dealer through a wire order
c. share are redeemed directly to the fund by a customer
d. ETF shares are purchased by a customer in the secondary market.
Answer: d. ETF shares are purchased by a customer in the secondary
market
investors who purchase ETFs in the secondary market pay the
market price at the time of purchase, so forward pricing is not used.
ETF- funds that have a portfolio of securities that mirrors a specific
index or industry sector. these securities trade like common stock
,◉ All of the following are considered to be "custodial property" that
can be given by a donor to a minor under the Uniform Gifts to
Minors Act or the newer Uniform Transfer to Minors Act except:
a. bearer bonds
b. a life insurance policy
c. an annuity contract
d. a futures contract. Answer: d. a futures contract
UGMA- gifts of cash or securities
UTMA- custodial property: any type of asset including real estate
and tangible and intangible personal property. future contract
specifically excluded from coverage in most states
◉ A corporate bond called at 108 1/8 would pay the bondholder.
a. $1,084.50
b. $1,081.25 plus accrued interest
c. $1,081.25 minus accrued interest
d. 1,000 plus accrued interest of $1.25. Answer: b. $1,081.25 plus
accrued interest
108 x 10= $1,080
,1/8= 0.125 x 10= $1.25
= $1,081.25
investor would be entitled to accrued interest
◉ All of the following information is required from an individual
customer when completing a new account report form EXCEPT
a. the customer's residential street address
b. the customer's employer's name and address
c. verification of the identity of the customer
d. the source of funds the customer deposits when opening the
account. Answer: d. the source of funds the customer deposits when
opening the account
required:
customer name
residential address
email address
telephone number
annual income, net worth, and bank references
occupation, name, and address of employer
whether person is citizen
, date of birth
social security or tax id
government issued photo id
identity of associated person's rr
trusted contact person
◉ When a member firm receives a sell long order for a customer
account, the member must have reasonable assurance that the
customer will deliver the securities within
a. 2 business days
b. 2 calendar days
c. 4 business days
d. 4 calendar days. Answer: a. 2 business days
◉ Which of the following entities or systems is used to settle the
majority of equity transactions, corporate bond transactions, and
municipal bond transactions in the United States?
a. The New York Stock Exchange (NYSE)
b. The National Association of Securities Dealers Automated
Quotations (NASDAQ)
BREAKDOWN AND REVISION 2026
◉ The Investment Company Act of 1940 requires that certain
transactions use "forward pricing" (the valuation of mutual fund
share prices as of the next computation). Which of the following
transactions does NOT require "forward pricing"?
a. shares are purchased directly from the principal underwriter by
individual investors
b. shares are sold on behalf of an investor by the investor's broker-
dealer through a wire order
c. share are redeemed directly to the fund by a customer
d. ETF shares are purchased by a customer in the secondary market.
Answer: d. ETF shares are purchased by a customer in the secondary
market
investors who purchase ETFs in the secondary market pay the
market price at the time of purchase, so forward pricing is not used.
ETF- funds that have a portfolio of securities that mirrors a specific
index or industry sector. these securities trade like common stock
,◉ All of the following are considered to be "custodial property" that
can be given by a donor to a minor under the Uniform Gifts to
Minors Act or the newer Uniform Transfer to Minors Act except:
a. bearer bonds
b. a life insurance policy
c. an annuity contract
d. a futures contract. Answer: d. a futures contract
UGMA- gifts of cash or securities
UTMA- custodial property: any type of asset including real estate
and tangible and intangible personal property. future contract
specifically excluded from coverage in most states
◉ A corporate bond called at 108 1/8 would pay the bondholder.
a. $1,084.50
b. $1,081.25 plus accrued interest
c. $1,081.25 minus accrued interest
d. 1,000 plus accrued interest of $1.25. Answer: b. $1,081.25 plus
accrued interest
108 x 10= $1,080
,1/8= 0.125 x 10= $1.25
= $1,081.25
investor would be entitled to accrued interest
◉ All of the following information is required from an individual
customer when completing a new account report form EXCEPT
a. the customer's residential street address
b. the customer's employer's name and address
c. verification of the identity of the customer
d. the source of funds the customer deposits when opening the
account. Answer: d. the source of funds the customer deposits when
opening the account
required:
customer name
residential address
email address
telephone number
annual income, net worth, and bank references
occupation, name, and address of employer
whether person is citizen
, date of birth
social security or tax id
government issued photo id
identity of associated person's rr
trusted contact person
◉ When a member firm receives a sell long order for a customer
account, the member must have reasonable assurance that the
customer will deliver the securities within
a. 2 business days
b. 2 calendar days
c. 4 business days
d. 4 calendar days. Answer: a. 2 business days
◉ Which of the following entities or systems is used to settle the
majority of equity transactions, corporate bond transactions, and
municipal bond transactions in the United States?
a. The New York Stock Exchange (NYSE)
b. The National Association of Securities Dealers Automated
Quotations (NASDAQ)
