FINRA SIE Practice Test (Answered 2022) Graded A+
Upon Expiration, all in-the-money S&P 100 Index call options are settled by the delivery
of which of the following?
Cash
Which of the following statements is true about treasury stock?
It is issued stock that has been subsequently reacquired by the corporation
In the event of a stock split, which of the following parties is required to maintain a
record of the shareholders eligible to receive the additional shares?
Transfer Agent
Which of the following actions is required of a broker-dealer's anti-money laundering
(AML) program?
Designating an AML compliance officer
A registered representative (RR) wants to participate in a private securities transaction.
Which of the following actions must the RR take?
Send written notice to his supervisor outlining the activity and compensation structure
A customer BUYS a 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?
$38
The call provision of a bond stipulates which of the following factors?
Call date and call price
When is interest on Treasury notes paid?
Semiannually
The owner of which of the following products is MOST exposed to inflationary risk?
Treasury bonds (because it's long-term)
A registered representative (RR) who wants to place a mutual fund advertisement must
obtain written approval from which of the following parties?
A registered principal of the RR's firm
A company announces a tender offer to its shareholders with the intent to buy a
maximum of 1 million shares of its outstanding stock at $10 per share and sets no
minimum number of shares to be purchased. An investor wants to participate in this
offer and tenders his 1,000 share position. At the close of the offer period, only 900,000
shares have been tendered. How many, if any, of the investor's shares will the company
purchase?
1,000 (1,000 x 100 = 100,000 shares; 1 million - 900k = 100k)
Broker-dealer ABC seeks to underwrite a municipal securities offering by a local town in
which the mayor is currently seeking re-election. A municipal finance professional who
resides in the town and works for ABC contributed $200 to the mayor's re-election
campaign 13 months ago. If the employee wants to support the campaign further
without impacting the municipal securities business of the firm, he is permitted to make
an additional contribution of up to what amount?
, $50 ($250 is the limit PER election)
Which of the following stakeholders has first claim priority in a Chapter 11 proceeding?
Secured debt holders
[Order of liquidation at bankruptcy:
1. Unpaid wages
2. Taxes (IRS)
3. Secured claims (mortgages)
4. Secured liabilities (bonds)
5. Unsecured liabilities (debentures) and general creditors
6. Subordinated debt
7. Preferred Stockholders
8. Common stockholders]
An investors owns 100 shares of XYZ common stock at the current market price of $50
per share. If XYZ conducts a 1-for-2 REVERSE stock split, the investor's post-split stock
position will be:
50 shares at $100 per share
The primary purpose of a syndicate desk in the context of an equity offering is to:
build an order book and allocate the stock
Which of the following investments are generally traded according to their average life
rather than their stated maturity dates?
Asset-backed securities
UTMA (Minor) accounts are opened under the tax ID of the:
minor
Stability in the value of debt portfolio is greatest when:
maturities of the debt securities are short
Which of the following statements is true about all U.S. government agency issues?
They are exempt from registration under the Securities Act of 1933
Which of the following products is adversely impacted if the issuer's credit rating is
downgraded?
Exchange-traded notes (ETNs)
Company ABC announces a 20% stock dividend for its common shareholders. If a
customer holds 1,000 shares at $50.00, what is the new price and number of shares
following the payment of the stock dividend?
1,200 shares at $41.67 (20% increase in number of stock BUT market cap remains the
same)
A married couple who earned income that exceeded $300,000 in each of the prior two
years ad reasonably expects the same for the current year is:
an accredited investor
Which of the following statements is true regarding the concept of an annuity contract?
The kind of annuity selected partly determines the payment amounts to the annuitant.
Roth 401(k) and Roth IRA individual retirement account (IRA) plans are share which of
the following features?
Qualified distributions are excluded from federal income tax
Under normal circumstances, a customer's letter of intent on a mutual fund purchase is
valid for what maximum period of time?
Upon Expiration, all in-the-money S&P 100 Index call options are settled by the delivery
of which of the following?
Cash
Which of the following statements is true about treasury stock?
It is issued stock that has been subsequently reacquired by the corporation
In the event of a stock split, which of the following parties is required to maintain a
record of the shareholders eligible to receive the additional shares?
Transfer Agent
Which of the following actions is required of a broker-dealer's anti-money laundering
(AML) program?
Designating an AML compliance officer
A registered representative (RR) wants to participate in a private securities transaction.
Which of the following actions must the RR take?
Send written notice to his supervisor outlining the activity and compensation structure
A customer BUYS a 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?
$38
The call provision of a bond stipulates which of the following factors?
Call date and call price
When is interest on Treasury notes paid?
Semiannually
The owner of which of the following products is MOST exposed to inflationary risk?
Treasury bonds (because it's long-term)
A registered representative (RR) who wants to place a mutual fund advertisement must
obtain written approval from which of the following parties?
A registered principal of the RR's firm
A company announces a tender offer to its shareholders with the intent to buy a
maximum of 1 million shares of its outstanding stock at $10 per share and sets no
minimum number of shares to be purchased. An investor wants to participate in this
offer and tenders his 1,000 share position. At the close of the offer period, only 900,000
shares have been tendered. How many, if any, of the investor's shares will the company
purchase?
1,000 (1,000 x 100 = 100,000 shares; 1 million - 900k = 100k)
Broker-dealer ABC seeks to underwrite a municipal securities offering by a local town in
which the mayor is currently seeking re-election. A municipal finance professional who
resides in the town and works for ABC contributed $200 to the mayor's re-election
campaign 13 months ago. If the employee wants to support the campaign further
without impacting the municipal securities business of the firm, he is permitted to make
an additional contribution of up to what amount?
, $50 ($250 is the limit PER election)
Which of the following stakeholders has first claim priority in a Chapter 11 proceeding?
Secured debt holders
[Order of liquidation at bankruptcy:
1. Unpaid wages
2. Taxes (IRS)
3. Secured claims (mortgages)
4. Secured liabilities (bonds)
5. Unsecured liabilities (debentures) and general creditors
6. Subordinated debt
7. Preferred Stockholders
8. Common stockholders]
An investors owns 100 shares of XYZ common stock at the current market price of $50
per share. If XYZ conducts a 1-for-2 REVERSE stock split, the investor's post-split stock
position will be:
50 shares at $100 per share
The primary purpose of a syndicate desk in the context of an equity offering is to:
build an order book and allocate the stock
Which of the following investments are generally traded according to their average life
rather than their stated maturity dates?
Asset-backed securities
UTMA (Minor) accounts are opened under the tax ID of the:
minor
Stability in the value of debt portfolio is greatest when:
maturities of the debt securities are short
Which of the following statements is true about all U.S. government agency issues?
They are exempt from registration under the Securities Act of 1933
Which of the following products is adversely impacted if the issuer's credit rating is
downgraded?
Exchange-traded notes (ETNs)
Company ABC announces a 20% stock dividend for its common shareholders. If a
customer holds 1,000 shares at $50.00, what is the new price and number of shares
following the payment of the stock dividend?
1,200 shares at $41.67 (20% increase in number of stock BUT market cap remains the
same)
A married couple who earned income that exceeded $300,000 in each of the prior two
years ad reasonably expects the same for the current year is:
an accredited investor
Which of the following statements is true regarding the concept of an annuity contract?
The kind of annuity selected partly determines the payment amounts to the annuitant.
Roth 401(k) and Roth IRA individual retirement account (IRA) plans are share which of
the following features?
Qualified distributions are excluded from federal income tax
Under normal circumstances, a customer's letter of intent on a mutual fund purchase is
valid for what maximum period of time?
