SIE Assessment Exam with all Correct & 100% Verified
Answers |Latest Update |Already Graded A+
In which of the following ways may a company declare dividends?
I. Cash
II. Stock
III. Stock of a subsidiary company ✔Correct Answer-I, II and III
The statement "I believe that government intervention is necessary in order for an economy to
grow and reach a point of stability" was most likely made by ✔Correct Answer-an adherent of
Keynesian economic theory (Exp: Keynesian economic theory espouses that the government
needs to be the leading force in promoting economic growth and stability. Supply-side
economics advocates that tax cuts provide incentives for consumers to save and invest, thereby
producing benefits that will encompass the broad economy.)
Shares of an IPO become marginable after how many days? ✔Correct Answer-30 days
following issuance (Exp. Shares of an initial public offering (IPO) become marginable (or may be
used as collateral) after 30 days.)
A "not-held" order means ✔Correct Answer-that the commission house broker will not be
held responsible if he does not get an immediate execution of the market order (Exp. A "market,
not-held" order means that the customer is letting the RR use her own best judgment as to the
price and time at which the transaction will be executed, and will not hold the RR responsible if
she misses the market for a security.)
What is a discretionary trade? ✔Correct Answer-Discretionary trades are trades where the
customer does not specify the type of security, type of transaction or quantity. For a
discretionary trade, a registered rep must have discretionary authority. An order that leaves the
time and price open is not considered discretionary.
A retirement plan where contributions must be made on an after-tax basis is a ✔Correct
Answer-Non-qualified plan (Exp. In a non-qualified retirement plan, participants contribute
funds on an after-tax basis. The invested funds then grow on a tax-deferred basis until they are
withdrawn by the employee.)
What is statutory disqualification? ✔Correct Answer-A statutory disqualifcation will occur if a
registered representative is conviction of any felony or a securities or fraud related
misdemeanor in the past 10 years. Once statutory disqualified, the individual cannot be
associated with a FINRA member firm unless they receive a waiver from FINRA.
Which of the following activities would least likely raise a red flag within a broker-dealer of
suspicious activity? A. Customer request to shred account information or B. Frequent orders
, being placed by a day trading account ✔Correct Answer-B. Frequent orders being placed by a
day trading account (Exp. A day trading account will place numerous orders throughout the
trading day, and should not, in and of itself, be a cause for concern. The other listed activities
are all potential signs of suspicious activity.)
Transactions with individuals on the Specially Designated Nationals list ✔Correct Answer-Are
specifically prohibited by federal law (Exp. The Specially Designated National List must be
created pursuant to the USA Patriot Act, and transactions with parties on this list are strictly
prohibited.)
Becky has been approached by her client Tom, who is also a personal friend, for a loan to cover
some expenses that Tom needs help with. Becky may lend funds to Tom ✔Correct Answer-
With advance written consent from her firm (Exp. This activity would be permitted, with
advance notification to, and pre-approval from, the broker-dealer. FINRA does not need to be
notified.)
A correspondence includes any written communication that is distributed or made available to
✔Correct Answer-25 or fewer retail investors within any 30 calendar-day period (Exp. A
correspondence includes any written communication that is distributed or made available to 25
or fewer retail investors within any 30 calendar-day period. Examples of correspondences
include emails and instant messages. Correspondences do not need principal approval before
first use.)
What are STRIPS? ✔Correct Answer-STRIPS are zero coupon bonds (typically with maturities
of at least 10 years) that are backed by the US Treasury. Because they are zero coupon bonds,
they have no reinvestment rate risk since there is no cash flows to reinvest each year into the
market. Instead of receiving coupon payments, investors buy the bond for a discount and
receive the full face value at maturity, which is treated as interest income for the investor and
only taxed at the federal level.
What are industrial development revenue bonds? ✔Correct Answer-Industrial development
revenue bonds are a type of taxable municipal security that is issued by a municipality on behalf
of a corporation. Specifically, the municipality will issue to debt to build a facility on behalf of a
corporation and then lease that facility to the corporation. Because the bonds are backed by
lease payments made by the corporation, the debt is the responsibility and credit quality of the
corporation.
The interest income on federal agency securities is taxed at what level(s)? ✔Correct Answer-
The interest income on federal agency securities (GNMA, FNMA) is taxed at the federal, state,
and local level. As a reminder, the interest income on treasury securities is taxed at the federal
level only.
Answers |Latest Update |Already Graded A+
In which of the following ways may a company declare dividends?
I. Cash
II. Stock
III. Stock of a subsidiary company ✔Correct Answer-I, II and III
The statement "I believe that government intervention is necessary in order for an economy to
grow and reach a point of stability" was most likely made by ✔Correct Answer-an adherent of
Keynesian economic theory (Exp: Keynesian economic theory espouses that the government
needs to be the leading force in promoting economic growth and stability. Supply-side
economics advocates that tax cuts provide incentives for consumers to save and invest, thereby
producing benefits that will encompass the broad economy.)
Shares of an IPO become marginable after how many days? ✔Correct Answer-30 days
following issuance (Exp. Shares of an initial public offering (IPO) become marginable (or may be
used as collateral) after 30 days.)
A "not-held" order means ✔Correct Answer-that the commission house broker will not be
held responsible if he does not get an immediate execution of the market order (Exp. A "market,
not-held" order means that the customer is letting the RR use her own best judgment as to the
price and time at which the transaction will be executed, and will not hold the RR responsible if
she misses the market for a security.)
What is a discretionary trade? ✔Correct Answer-Discretionary trades are trades where the
customer does not specify the type of security, type of transaction or quantity. For a
discretionary trade, a registered rep must have discretionary authority. An order that leaves the
time and price open is not considered discretionary.
A retirement plan where contributions must be made on an after-tax basis is a ✔Correct
Answer-Non-qualified plan (Exp. In a non-qualified retirement plan, participants contribute
funds on an after-tax basis. The invested funds then grow on a tax-deferred basis until they are
withdrawn by the employee.)
What is statutory disqualification? ✔Correct Answer-A statutory disqualifcation will occur if a
registered representative is conviction of any felony or a securities or fraud related
misdemeanor in the past 10 years. Once statutory disqualified, the individual cannot be
associated with a FINRA member firm unless they receive a waiver from FINRA.
Which of the following activities would least likely raise a red flag within a broker-dealer of
suspicious activity? A. Customer request to shred account information or B. Frequent orders
, being placed by a day trading account ✔Correct Answer-B. Frequent orders being placed by a
day trading account (Exp. A day trading account will place numerous orders throughout the
trading day, and should not, in and of itself, be a cause for concern. The other listed activities
are all potential signs of suspicious activity.)
Transactions with individuals on the Specially Designated Nationals list ✔Correct Answer-Are
specifically prohibited by federal law (Exp. The Specially Designated National List must be
created pursuant to the USA Patriot Act, and transactions with parties on this list are strictly
prohibited.)
Becky has been approached by her client Tom, who is also a personal friend, for a loan to cover
some expenses that Tom needs help with. Becky may lend funds to Tom ✔Correct Answer-
With advance written consent from her firm (Exp. This activity would be permitted, with
advance notification to, and pre-approval from, the broker-dealer. FINRA does not need to be
notified.)
A correspondence includes any written communication that is distributed or made available to
✔Correct Answer-25 or fewer retail investors within any 30 calendar-day period (Exp. A
correspondence includes any written communication that is distributed or made available to 25
or fewer retail investors within any 30 calendar-day period. Examples of correspondences
include emails and instant messages. Correspondences do not need principal approval before
first use.)
What are STRIPS? ✔Correct Answer-STRIPS are zero coupon bonds (typically with maturities
of at least 10 years) that are backed by the US Treasury. Because they are zero coupon bonds,
they have no reinvestment rate risk since there is no cash flows to reinvest each year into the
market. Instead of receiving coupon payments, investors buy the bond for a discount and
receive the full face value at maturity, which is treated as interest income for the investor and
only taxed at the federal level.
What are industrial development revenue bonds? ✔Correct Answer-Industrial development
revenue bonds are a type of taxable municipal security that is issued by a municipality on behalf
of a corporation. Specifically, the municipality will issue to debt to build a facility on behalf of a
corporation and then lease that facility to the corporation. Because the bonds are backed by
lease payments made by the corporation, the debt is the responsibility and credit quality of the
corporation.
The interest income on federal agency securities is taxed at what level(s)? ✔Correct Answer-
The interest income on federal agency securities (GNMA, FNMA) is taxed at the federal, state,
and local level. As a reminder, the interest income on treasury securities is taxed at the federal
level only.
