Kaplan SIE Final Exam with all Correct & 100% Verified
Answers |Latest Version |Already Graded A+
An investor has a bond maturing during a time when interest rates are falling. It is likely that the
investor, wanting to keep the funds invested, would be most concerned with ✔Correct
Answer-reinvestment risk
Which of the following would be most susceptible to currency risk?
A. Common stock of a small cap company in the United States
b. Common stock of a large, well established company in England
c. Treasury bonds
d. Municipal bonds ✔Correct Answer-b
Preferred shares have ✔Correct Answer-characteristics of both equity and debt securities
By virtue of a stocks listing for trading on a U.S. stock exchange, which of the following risks is
reduced or even recognized as eliminated? ✔Correct Answer-liquidity risk
A bank trustee holds the titles to assets a corporation has purchased and utilizes in its day-to-
day business. The corporation issues debt securities backed by these assets. These securities are
✔Correct Answer-equipment trust certificates
An investor interested in quarterly income should invest in ✔Correct Answer-utility company
stock
Interest on a 7% corporate bond would be paid to the investor as ✔Correct Answer-Two
semiannual checks for $35 each
Interest on corporate bonds is paid twice per year, or semiannually. The interest rate reported,
however, is an annual rate. Thus a 7% bond would pay 7% of par ($1,000), or $70, per year as
two semiannual checks for $35 each
Which of the following can encourage economic growth because gradually increasing prices
tend to stimulate business investment? ✔Correct Answer-mild inflation
the measure of the inflation rate is ✔Correct Answer-the consumer price index
If a customer sold calls to open, which of the following transactions would be allowed if the
options agreement was not returned signed within 15 days? ✔Correct Answer-buy calls to
close
,The coupon rate on a debt security represents ✔Correct Answer-the interest rate the issuer
has agreed to pay the investor
Someone who purchases shares of a corporation's common stock has ✔Correct Answer-
limited liability and voting rights
The options disclosure document (ODD) must be provided ✔Correct Answer-at or before the
time of account approval
If a registered representative allows a customer to unknowingly buy investment company shares
in an amount just under a dollar bracket that would qualify for a reduced sales charge, or
encourages such a purchase, this is known as ✔Correct Answer-a breakpoint sale violation
The ratings on the debt instruments of a foreign country with outstanding loans from a number
of other countries worldwide have been downgraded. The impact felt due to the risk of possible
default is known as ✔Correct Answer-sovereign risk
While it can be noted that sovereign risk is a type of political risk, the risk of default by a country
on its debt instruments is specifically recognized as sovereign risk.
All of the following statements are true except
A) a closed-end company may issue preferred stock.
b) a bond mutual fund may not issue bonds.
c) a bond mutual fund may issue bonds.
D) a closed-end company may issue bonds ✔Correct Answer-c
T-bonds and T-notes ✔Correct Answer-are both priced as a percentage of par
A stock's market value is directly determined by which of the following? ✔Correct Answer-
supply and demand
An investor purchases a bond in the secondary market at $950. Assuming $1,000 par value, this
bond is trading at ✔Correct Answer-a discount
A registered representative wants to place advertisements in his daughters youth athletic
league quarterly sponsorship booklet. He wants to convey in the weekly bulletin at his church
that he specializes in retirement planning and 529 plans. Which of the following statements
regarding these advertisements is true?
a) no approval is required because both the youth athletic league and the church would be
recognized as bona fide non-profits.
b) The piece will be regulated as correspondence because it is only being forwarded to two
organizations.
, c) The advertisement is considered institutional communications and therefore no principal pre-
approval is required.
d) Pre-approval by a principal of the broker-dealer is required. ✔Correct Answer-d
A corporation has a shareholders' meeting coming up wherein several controversial proposals
will be made. A number of persons will be actively soliciting proxies, and the corporation plans
to send out up-to-date material on the proposals to shareholders to permit them to make
informed decisions. Which of the following must review this material before it is sent out?
a) the regional exchange where the stock is traded
b) The Securities and Exchange Commission (SEC)
c) None; review not required
d) The Financial Industry Regulatory Authority (FINRA) ✔Correct Answer-b
Limited partnerships sold through private placements involve ✔Correct Answer-a small group
of investors, each contributing a large sum
Limited partnerships sold through private placements generally consist of a small group of
accredited investors, each contributing a large sum to the partnership.
A mutual fund can offer all of the following to investors except
a) the ability to do transfers by telephone or online.
b) physical custody of the fund's portfolio cash and securities.
c) check-writing privileges for redemptions.
d) acting as custodian for retirement accounts ✔Correct Answer-b
As interest rates rise, prices of preferred stock will ✔Correct Answer-fall
All of the following would be acceptable methods for the customer opting out of allowing the
broker-dealer to share their nonpublic personal information except
a) calling a toll-free number.
b) writing a letter.
c) opting out electronically
d) checking a box ✔Correct Answer-b
a breakpoint sale is ✔Correct Answer-the sale of investment company shares in dollar
amounts just below the point at which the sales charge is reduced on quantity transactions to
incur the higher sales charge.
What are the two basic types of return on an investment? ✔Correct Answer-capital gains and
income
Answers |Latest Version |Already Graded A+
An investor has a bond maturing during a time when interest rates are falling. It is likely that the
investor, wanting to keep the funds invested, would be most concerned with ✔Correct
Answer-reinvestment risk
Which of the following would be most susceptible to currency risk?
A. Common stock of a small cap company in the United States
b. Common stock of a large, well established company in England
c. Treasury bonds
d. Municipal bonds ✔Correct Answer-b
Preferred shares have ✔Correct Answer-characteristics of both equity and debt securities
By virtue of a stocks listing for trading on a U.S. stock exchange, which of the following risks is
reduced or even recognized as eliminated? ✔Correct Answer-liquidity risk
A bank trustee holds the titles to assets a corporation has purchased and utilizes in its day-to-
day business. The corporation issues debt securities backed by these assets. These securities are
✔Correct Answer-equipment trust certificates
An investor interested in quarterly income should invest in ✔Correct Answer-utility company
stock
Interest on a 7% corporate bond would be paid to the investor as ✔Correct Answer-Two
semiannual checks for $35 each
Interest on corporate bonds is paid twice per year, or semiannually. The interest rate reported,
however, is an annual rate. Thus a 7% bond would pay 7% of par ($1,000), or $70, per year as
two semiannual checks for $35 each
Which of the following can encourage economic growth because gradually increasing prices
tend to stimulate business investment? ✔Correct Answer-mild inflation
the measure of the inflation rate is ✔Correct Answer-the consumer price index
If a customer sold calls to open, which of the following transactions would be allowed if the
options agreement was not returned signed within 15 days? ✔Correct Answer-buy calls to
close
,The coupon rate on a debt security represents ✔Correct Answer-the interest rate the issuer
has agreed to pay the investor
Someone who purchases shares of a corporation's common stock has ✔Correct Answer-
limited liability and voting rights
The options disclosure document (ODD) must be provided ✔Correct Answer-at or before the
time of account approval
If a registered representative allows a customer to unknowingly buy investment company shares
in an amount just under a dollar bracket that would qualify for a reduced sales charge, or
encourages such a purchase, this is known as ✔Correct Answer-a breakpoint sale violation
The ratings on the debt instruments of a foreign country with outstanding loans from a number
of other countries worldwide have been downgraded. The impact felt due to the risk of possible
default is known as ✔Correct Answer-sovereign risk
While it can be noted that sovereign risk is a type of political risk, the risk of default by a country
on its debt instruments is specifically recognized as sovereign risk.
All of the following statements are true except
A) a closed-end company may issue preferred stock.
b) a bond mutual fund may not issue bonds.
c) a bond mutual fund may issue bonds.
D) a closed-end company may issue bonds ✔Correct Answer-c
T-bonds and T-notes ✔Correct Answer-are both priced as a percentage of par
A stock's market value is directly determined by which of the following? ✔Correct Answer-
supply and demand
An investor purchases a bond in the secondary market at $950. Assuming $1,000 par value, this
bond is trading at ✔Correct Answer-a discount
A registered representative wants to place advertisements in his daughters youth athletic
league quarterly sponsorship booklet. He wants to convey in the weekly bulletin at his church
that he specializes in retirement planning and 529 plans. Which of the following statements
regarding these advertisements is true?
a) no approval is required because both the youth athletic league and the church would be
recognized as bona fide non-profits.
b) The piece will be regulated as correspondence because it is only being forwarded to two
organizations.
, c) The advertisement is considered institutional communications and therefore no principal pre-
approval is required.
d) Pre-approval by a principal of the broker-dealer is required. ✔Correct Answer-d
A corporation has a shareholders' meeting coming up wherein several controversial proposals
will be made. A number of persons will be actively soliciting proxies, and the corporation plans
to send out up-to-date material on the proposals to shareholders to permit them to make
informed decisions. Which of the following must review this material before it is sent out?
a) the regional exchange where the stock is traded
b) The Securities and Exchange Commission (SEC)
c) None; review not required
d) The Financial Industry Regulatory Authority (FINRA) ✔Correct Answer-b
Limited partnerships sold through private placements involve ✔Correct Answer-a small group
of investors, each contributing a large sum
Limited partnerships sold through private placements generally consist of a small group of
accredited investors, each contributing a large sum to the partnership.
A mutual fund can offer all of the following to investors except
a) the ability to do transfers by telephone or online.
b) physical custody of the fund's portfolio cash and securities.
c) check-writing privileges for redemptions.
d) acting as custodian for retirement accounts ✔Correct Answer-b
As interest rates rise, prices of preferred stock will ✔Correct Answer-fall
All of the following would be acceptable methods for the customer opting out of allowing the
broker-dealer to share their nonpublic personal information except
a) calling a toll-free number.
b) writing a letter.
c) opting out electronically
d) checking a box ✔Correct Answer-b
a breakpoint sale is ✔Correct Answer-the sale of investment company shares in dollar
amounts just below the point at which the sales charge is reduced on quantity transactions to
incur the higher sales charge.
What are the two basic types of return on an investment? ✔Correct Answer-capital gains and
income
