SIE Exam with all Correct & 100% Verified Answers |
Latest Version |Already Graded A+
4 stages of the business cycle ✔Correct Answer-expansion (recovery), peak (prosperity),
contraction (decline), trough, and then expansion (recovery) again
A client of a member broker-dealer has just found a new job requiring relocation with a salary
paying 50% more than the old job. The client should ✔Correct Answer-should notify the
broker-dealer of the change within 30 days
A convertible feature for a corporate bond allows ✔Correct Answer-a bondholder to convert a
debt instrument into securities that give the investor ownership rights
A corporation with 1 million shares of stock outstanding wishes to sell another 250,000 shares.
When management conducts a rights offering, a shareholder owning 100 shares will be given
stock rights to purchase how many additional shares? ✔Correct Answer-25 additional shares.
This investor must thus go from owning 100 shares out of 1,000,000 to 125 shares out of
1,250,000.
A corporation's offer to current stockholders of the ability to purchase a proportionate number
of new shares at a specific price for a limited time is called a ✔Correct Answer-right (they
usually expire in 30-45 days)
A customer believes that ABC's price will go up but does not have the money to buy 100 shares
right now. How could the customer use options to profit from an increase in the stock's price?
✔Correct Answer-buy calls, write puts (both are bullish)
A deficit in the U.S. balance of payments can occur if ✔Correct Answer-interest rates in
foreign countries are higher than U.S. domestic rates and U.S. consumers are purchasing
(importing) foreign goods
A depository ✔Correct Answer-A business entity that performs the function of receiving and
delivering payments and securities on behalf of both parties to a securities transaction
A market maker owning 70,000 shares of HCHS stock noted that it is down .25 on the day so far.
Near the very end of the trading day the market maker enters an order to buy 100 shares at the
market. This is an example of ✔Correct Answer-Marking the close - Effecting trades at or near
the close of the trading day to influence the closing price of a stock is called marking the close.
In this example the buy order at the close is likely intended to push the stock up so that the
MM's position in the stock would be marked at a higher price.
,A market maker provides a firm quote to another broker/dealer then refuses to buy or sell at
the price quoted. This is a violation where the market maker is said to be ✔Correct Answer-
backing away- not honoring the quote
A market maker that does not honor its firm quote is said to be ✔Correct Answer-"backing
away"
A member firm holding stock in street name may vote the shares as it sees fit if ✔Correct
Answer-the customer does not return the signed proxy statement by the 10th day before the
shareholders' meeting, and if the matters to be voted on are of minor importance.
A preemptive right for existing shareholders is best described as ✔Correct Answer-the right to
purchase shares in an amount that would keep a shareholder's proportionate ownership in the
corporation unchanged when a company issues additional shares
A registered representative speaks to a customer about a particular 6% municipal bond quoted
on a 6.5% basis. What does this mean? ✔Correct Answer-6% is the bond's coupon, while 6.5%
is the bond's yield to maturity
A select pair or group of companies organized to underwrite corporate or municipal securities is
BEST known as a(n) ✔Correct Answer-A syndicate: Two or more broker-dealers (investment
bankers) which work with an issuer through, for example, the registration process in the case of
corporate securities and bring the issuer's securities to the market by selling them to investors
A strong US dollar leads to.. ✔Correct Answer-more affordablility for U.S. consumers to buy
more foreign goods, so U.S. imports increase. As more imported goods flow in, more money
flows out—deficit.
Access equals delivery rule ✔Correct Answer-Applies to the final prospectus and aftermarket
prospectus delivery obligations. It does not apply to preliminary prospectuses. No prospectus
can be delivered before the registration date
Adjusted cost basis problem ✔Correct Answer-see example on page 129 under dividends
All corporations will issue what type of stock? ✔Correct Answer-All corporations will issue
common stock, but not all corporations will issue preferred stock.
All GTC orders are automatically cancelled if gone unexecuted on... ✔Correct Answer-The last
day business day of April and the last business day of October. They are valid until they are
cancelled and must be reentered on these days if they don't want them to be cancelled
American depositary receipts (ADRs) ✔Correct Answer-issued by banks, represent a specific
number of shares of a foreign company, and trade and pay dividends in dollars
, American-style vs. European-style option ✔Correct Answer-American: call or put buyers can
exercise a contract any time BEFORE expiration
European: call or put buyers can exercise a contract on the expiration day only (last day of
trading)
An affiliate holding unregistered shares can sell under Rule 144 ✔Correct Answer-4 times a
year, or every 90 days (every 3 months).
An investment that allows for a share in the income, gains, losses, deductions, and tax credits of
the business entity to pass through to investors is known as ✔Correct Answer-limited
partnership
An investor has a long position in OMQ stock. After selling the stock at a loss, the investor could
purchase which of the following and not violate the wash sale rule? ✔Correct Answer-
Purchasing the put options would not violate the wash sale rule because these can be exercised
to sell the stock, not purchase it.
An investor holds a 6% callable bond purchased at 105. If the issuer calls the bond before
maturity, the yield to call realized by the investor would be ✔Correct Answer-less than the
coupon because they purchased the bond at a premium (105, bonds sell at 100)
An investor in a direct participation program wishes to divest of a partnership interest
purchased some time ago. You would correctly advise that ✔Correct Answer-There is no
secondary market making them highly illiquid
An investor is convinced that CDT stock will soon decline in value for a number of reasons. What
investment strategy will allow the investor to take advantage of the anticipated decline in share
value with the smallest cash investment? ✔Correct Answer-purchasing a put option because
the investor is bearish on the stock. If the stock declines as anticipated, the investor could
exercise the right to sell the stock at the strike price and then repurchase it at its lower current
market price for a profit
An investor is convinced that CDT stock will soon decline in value for a number of reasons.
Which investment strategy will allow the investor to take advantage of the anticipated decline in
share value with the smallest cash investment? ✔Correct Answer-Basic option strategy when
one is bearish on a stock, if the stock declines as anticipated, the investor can exercise the right
to sell the stock then repurchase it later at a lower price for a profit
An investor is long 1 July 40 call at 2. This investor ✔Correct Answer-has paid $200 for the call
contract and has the right to exercise the contract to purchase 100 shares of stock at the strike
price ($40).
An investor lending money to an entity receives back the principal amount of the loan on the
✔Correct Answer-maturity date
Latest Version |Already Graded A+
4 stages of the business cycle ✔Correct Answer-expansion (recovery), peak (prosperity),
contraction (decline), trough, and then expansion (recovery) again
A client of a member broker-dealer has just found a new job requiring relocation with a salary
paying 50% more than the old job. The client should ✔Correct Answer-should notify the
broker-dealer of the change within 30 days
A convertible feature for a corporate bond allows ✔Correct Answer-a bondholder to convert a
debt instrument into securities that give the investor ownership rights
A corporation with 1 million shares of stock outstanding wishes to sell another 250,000 shares.
When management conducts a rights offering, a shareholder owning 100 shares will be given
stock rights to purchase how many additional shares? ✔Correct Answer-25 additional shares.
This investor must thus go from owning 100 shares out of 1,000,000 to 125 shares out of
1,250,000.
A corporation's offer to current stockholders of the ability to purchase a proportionate number
of new shares at a specific price for a limited time is called a ✔Correct Answer-right (they
usually expire in 30-45 days)
A customer believes that ABC's price will go up but does not have the money to buy 100 shares
right now. How could the customer use options to profit from an increase in the stock's price?
✔Correct Answer-buy calls, write puts (both are bullish)
A deficit in the U.S. balance of payments can occur if ✔Correct Answer-interest rates in
foreign countries are higher than U.S. domestic rates and U.S. consumers are purchasing
(importing) foreign goods
A depository ✔Correct Answer-A business entity that performs the function of receiving and
delivering payments and securities on behalf of both parties to a securities transaction
A market maker owning 70,000 shares of HCHS stock noted that it is down .25 on the day so far.
Near the very end of the trading day the market maker enters an order to buy 100 shares at the
market. This is an example of ✔Correct Answer-Marking the close - Effecting trades at or near
the close of the trading day to influence the closing price of a stock is called marking the close.
In this example the buy order at the close is likely intended to push the stock up so that the
MM's position in the stock would be marked at a higher price.
,A market maker provides a firm quote to another broker/dealer then refuses to buy or sell at
the price quoted. This is a violation where the market maker is said to be ✔Correct Answer-
backing away- not honoring the quote
A market maker that does not honor its firm quote is said to be ✔Correct Answer-"backing
away"
A member firm holding stock in street name may vote the shares as it sees fit if ✔Correct
Answer-the customer does not return the signed proxy statement by the 10th day before the
shareholders' meeting, and if the matters to be voted on are of minor importance.
A preemptive right for existing shareholders is best described as ✔Correct Answer-the right to
purchase shares in an amount that would keep a shareholder's proportionate ownership in the
corporation unchanged when a company issues additional shares
A registered representative speaks to a customer about a particular 6% municipal bond quoted
on a 6.5% basis. What does this mean? ✔Correct Answer-6% is the bond's coupon, while 6.5%
is the bond's yield to maturity
A select pair or group of companies organized to underwrite corporate or municipal securities is
BEST known as a(n) ✔Correct Answer-A syndicate: Two or more broker-dealers (investment
bankers) which work with an issuer through, for example, the registration process in the case of
corporate securities and bring the issuer's securities to the market by selling them to investors
A strong US dollar leads to.. ✔Correct Answer-more affordablility for U.S. consumers to buy
more foreign goods, so U.S. imports increase. As more imported goods flow in, more money
flows out—deficit.
Access equals delivery rule ✔Correct Answer-Applies to the final prospectus and aftermarket
prospectus delivery obligations. It does not apply to preliminary prospectuses. No prospectus
can be delivered before the registration date
Adjusted cost basis problem ✔Correct Answer-see example on page 129 under dividends
All corporations will issue what type of stock? ✔Correct Answer-All corporations will issue
common stock, but not all corporations will issue preferred stock.
All GTC orders are automatically cancelled if gone unexecuted on... ✔Correct Answer-The last
day business day of April and the last business day of October. They are valid until they are
cancelled and must be reentered on these days if they don't want them to be cancelled
American depositary receipts (ADRs) ✔Correct Answer-issued by banks, represent a specific
number of shares of a foreign company, and trade and pay dividends in dollars
, American-style vs. European-style option ✔Correct Answer-American: call or put buyers can
exercise a contract any time BEFORE expiration
European: call or put buyers can exercise a contract on the expiration day only (last day of
trading)
An affiliate holding unregistered shares can sell under Rule 144 ✔Correct Answer-4 times a
year, or every 90 days (every 3 months).
An investment that allows for a share in the income, gains, losses, deductions, and tax credits of
the business entity to pass through to investors is known as ✔Correct Answer-limited
partnership
An investor has a long position in OMQ stock. After selling the stock at a loss, the investor could
purchase which of the following and not violate the wash sale rule? ✔Correct Answer-
Purchasing the put options would not violate the wash sale rule because these can be exercised
to sell the stock, not purchase it.
An investor holds a 6% callable bond purchased at 105. If the issuer calls the bond before
maturity, the yield to call realized by the investor would be ✔Correct Answer-less than the
coupon because they purchased the bond at a premium (105, bonds sell at 100)
An investor in a direct participation program wishes to divest of a partnership interest
purchased some time ago. You would correctly advise that ✔Correct Answer-There is no
secondary market making them highly illiquid
An investor is convinced that CDT stock will soon decline in value for a number of reasons. What
investment strategy will allow the investor to take advantage of the anticipated decline in share
value with the smallest cash investment? ✔Correct Answer-purchasing a put option because
the investor is bearish on the stock. If the stock declines as anticipated, the investor could
exercise the right to sell the stock at the strike price and then repurchase it at its lower current
market price for a profit
An investor is convinced that CDT stock will soon decline in value for a number of reasons.
Which investment strategy will allow the investor to take advantage of the anticipated decline in
share value with the smallest cash investment? ✔Correct Answer-Basic option strategy when
one is bearish on a stock, if the stock declines as anticipated, the investor can exercise the right
to sell the stock then repurchase it later at a lower price for a profit
An investor is long 1 July 40 call at 2. This investor ✔Correct Answer-has paid $200 for the call
contract and has the right to exercise the contract to purchase 100 shares of stock at the strike
price ($40).
An investor lending money to an entity receives back the principal amount of the loan on the
✔Correct Answer-maturity date
