FINRA Practice SIE Exam

The redemption value of an open-end investment company's shares is based on the: previous offering price previous closing NAV NAV computed after the order is received offering price computed after the order is received NAV computed after the order is received The computation of dollar prices and accrued interest on municipal bonds is normal on what calendar basis? 30/360 30/365 Actual/360 Actual/365 30/360 01:02 01:31 Blue-sky laws are regulated by which of the following entities? SEC MSRB FINRA state securities regulators State securities regulators At the time of issuance, which of the following securities normally has the longest period to expiration? Rights Options Warrants Repurchase agreements Warrants Regular way settlement on Treasury Bonds is: same day next business day second business day fifth business day next business day A firm is a participant in a public offering. To sell a substantial amount of the securities to its customers, the firm agrees to repurchase the shares at no less than the original sales price. Such agreements are: prohibited as fraudulent and manipulative. Permissible if the securities are deposited into escrow. prohibited unless the firm immediately sets aside funds for the repurchase permissible if the customers retain the right to sell the securities into the open market. prohibited as fraudulent and manipulative Under SEC S-P (Consumer Privacy), which of the following information must a firm include in its customer privacy and opt-out notices? the address of the firm's website the fee to opt out from the privacy program the deadline by which to opt out from the privacy program the policies to protect the security of nonpublic information the policies to protect the security of nonpublic information UTMA accounts are opened under the tax ID number of the: minor donor parent custodian minor Under FINRA rules, noncash compensation connected with the sale of variable contracts includes all of the following items EXCEPT: gifts meals lodging commissions commissions Describe the difference between primary distribution and secondary distribution. a primary distribution involves a sale of newly issued shares by the issuer while a secondary distribution involves the sale of already issued and outstanding shares If a market maker posts a quotes of 10.00 - 10.10 (25x10), which of the following actions is the market maker willing to take? sell 1,000 shares at $10 and buy 2,500 shares at $10.10 buy 2,500 shares at $10 and sell 1,000 shares at $10.10 sell 100 shares at $10 and buy 250 shares at $10.10 buy 250 shares at $10 and sell 100 shares at $10.10 buy 2,500 shares at $10 and sell 1,000 shares at $10.10 All of the following risks apply to both foreign and domestic debt instruments EXCEPT: political exchange repayment interest rate exchange A married couple who earned income that exceeded $300k in each of the prior two years and reasonably expects the same for this current year is: a qualified investor an accredited investor an institutional investor a qualified institutional buyer an accredited investor The owner of which of the following products is MOST exposed to inflationary risks? utility stocks treasury bills treasury bonds blue chip industrials treasury bonds What is the concept of an annuity contract? the kind of annuity selected partly determines the payment amounts to the annuitant Which of the following statement is true about all US Gov agency issues? they are exempt from federal taxes they are exempt from registration under the Securities Act of 1933 they are issued in bearer form only they are general obligations of the fed gov they are exempt from registration under the Securities Act of 1933 Direct participation programs (DPP's) provide: liquidity and transparency exposure to non-correlated assets with steady returns market-related correlations with higher average returns investors with direct purchases of stock from public companies exposure to non-correlated assets with steady returns Which of the following outcomes are possible for the writer of a covered call option? profit limited and loss limited profit limited and loss unlimited profit unlimited and loss limited profit unlimited and loss unlimited profit limited and loss limited when is interest on treasury notes paid? quarterly semiannually annually at maturity semiannually an associated person who is not a registered representative is permitted to engage in which of the following activities? accept an unsolicited customer order provide account opening forms to a new customer discuss the attributes of a particular investment product prequalify prospective customers as to investment objectives provide account opening forms to a new customer a transaction in which a writer covers a position by purchasing an option is called: closing sale closing purchase opening sale opening purchase closing purchase which of the following actions is required of a broker-dealer's anti-money laundering program? designating an AML compliance officer filing of the firm's AML program with FINRA conducting background checks of all employees identifying to regulators the employees responsible for Currency Transaction Reports designating an AML compliance officer Under the Securities Act of 1933, registration is required for which of the following securities? Eurodollar bonds municipal securities American depository receipts (ADR's) securities issued by the federal government ADR's Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes which of the following positions? same stock on the same day in a margin account same stock in different accounts on the same day the same stock in different account in the same household the same stock in a cash account without paying for the stock in full the same stock in a cash account without paying for the stock in full the last transaction in XYZ 5.50s 2030 was at 102. this bond is selling at par premium discount asset value premium Upon expiration, all in-the-money S&P 100 index call options are settled by the delivery of which of the following? cash S&P 100 index stocks S&P ETF's same number of S&P 100 index put options cash Roth 401(K) and Roth individual retirement accounts (IRA's) plans share which of the following features? contributions are made pretax neither account has maximum contribution limits neither account is subject to early distribution penalties qualified distributions are excluded from federal income tax qualified distributions are excluded from federal income tax a customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. the customer will break even when the stock is selling at what price per share at expiration? $3 $32 $35 $38 $38 Under FINRA rules, which of the following activities by a registered representative requires written notification to her firm? volunteering as a youth soccer league coach gambling resulting in winnings in excess of $10k driving part time for a transportation network company on weekend selling nonproprietary investment company securities products through her firm driving part time for a transportation network company on weekends