FINRA SIE Practice Test Exam Latest Update
2024-2025 Actual Exam from Credible Sources
with 450 Questions and Verified Correct Answers
Golden Ticket to Guaranteed A+ Verified by
Professor
A corporate bond which is backed solely by full faith and credit of the issuer.. -
CORRECT ANSWER: Debenture
A corporation has issued 9%, $1,000 par convertible debenture which convert at $50.
The common stock is currently trading at $60. If the bond and the common stock are
trading at parity a customer purchasing 5M of the bonds will pay: - CORRECT
ANSWER: Answer $6,000.
The bonds are convertible at $50, based on a $1,000 par value therefore each bond
convert into 20 shares at $50. If the common stock is trading at $60 the bond must be
trading at $60 x 20 = $1,200
Since they are buying 5M that means that are paying 5 x $1,200 = $6,000
A corporation has issued bonds at 8%. Three years later similar issues are being offered
in the primary market at 7% which of the following statements will be true about the
current yield and the nominal yield? - CORRECT ANSWER: The current yield will be
lower than the nominal yield. The dollar price of the bond will be at a premium.
Nominal (stated) = .08
Market price of bond = .08/.07 = 1,143
Current Yield = = .06999
,A corporation issued a 7% AA sinking fund debenture at par. Three years later, similar
issues are being issues at 8%. Which of the following is true about the outstanding 7%
issue? How does the current yield relate to the nominal yield - CORRECT ANSWER:
The current yield will be higher than the nominal yield.
The nominal yield (stated yield) will be 7%
The market price of the yield will drop when the new issues are at a higher yield.
Current yield = annual interest $/ current market price
market price = .07 / .08 = 875
Current yield =
Current yield = .08
Current yield > Nominal
A customer owns 256 shares of ABC common stock. ABC declares a rights offering,
with the terms being that for every 15 rights a shareholder may purchase one additional
share.at $24 a share. Any fractional rights may be rounded up to buy an additional
share.
How many shares may the customer buy with these right? - CORRECT ANSWER: A
share holder can buy a maximum of 18 shares with these rights paying $432 for them.
The 17.06 shares may be rounded up to 18.
A customer places an to buy bonds. The order reads
"Buy 5M ABC 9s M'35 @ 90 GTC"
,At which of the following will the price be executed
I 89
II 90
III 91
IV 92 - CORRECT ANSWER: I and II
The order is a Limit Buy so the purchase will only be initiated at or below 90
A middle age woman widowed customer has an investment objective of stable income
and wants minimal market and liquidity risk. What type of preferred stock would be the
best recommendation
I Participating
II Convertible
III Straight Preferred Stock
IV Variable rate preferred - CORRECT ANSWER: IV Variable Rate preferred
A municipality wishes to sell a bond issue that is NOT backed by taxing power. Which of
the following bonds can be issued?
I Revenue Bond
, II Industrial Revenue Bond
III General obligation Bond
IV Lease rental bond - CORRECT ANSWER: I , II, and IV
Only General obligation bonds are required by taxing power. The rest are revenue
backed
A Sell Stop order is executed when?
I In falling markets
II In rising markets
III at the price specified
IV At the market price - CORRECT ANSWER: In falling markets
at the market price
Sell stop = Stop loss to prevent further losses it becomes a market order and must fill
Buy stop = protects short sellers it becomes a market order once triggered
Think of stop as a bomb going off
Limit = doesn't trigger if not tripped over.
2024-2025 Actual Exam from Credible Sources
with 450 Questions and Verified Correct Answers
Golden Ticket to Guaranteed A+ Verified by
Professor
A corporate bond which is backed solely by full faith and credit of the issuer.. -
CORRECT ANSWER: Debenture
A corporation has issued 9%, $1,000 par convertible debenture which convert at $50.
The common stock is currently trading at $60. If the bond and the common stock are
trading at parity a customer purchasing 5M of the bonds will pay: - CORRECT
ANSWER: Answer $6,000.
The bonds are convertible at $50, based on a $1,000 par value therefore each bond
convert into 20 shares at $50. If the common stock is trading at $60 the bond must be
trading at $60 x 20 = $1,200
Since they are buying 5M that means that are paying 5 x $1,200 = $6,000
A corporation has issued bonds at 8%. Three years later similar issues are being offered
in the primary market at 7% which of the following statements will be true about the
current yield and the nominal yield? - CORRECT ANSWER: The current yield will be
lower than the nominal yield. The dollar price of the bond will be at a premium.
Nominal (stated) = .08
Market price of bond = .08/.07 = 1,143
Current Yield = = .06999
,A corporation issued a 7% AA sinking fund debenture at par. Three years later, similar
issues are being issues at 8%. Which of the following is true about the outstanding 7%
issue? How does the current yield relate to the nominal yield - CORRECT ANSWER:
The current yield will be higher than the nominal yield.
The nominal yield (stated yield) will be 7%
The market price of the yield will drop when the new issues are at a higher yield.
Current yield = annual interest $/ current market price
market price = .07 / .08 = 875
Current yield =
Current yield = .08
Current yield > Nominal
A customer owns 256 shares of ABC common stock. ABC declares a rights offering,
with the terms being that for every 15 rights a shareholder may purchase one additional
share.at $24 a share. Any fractional rights may be rounded up to buy an additional
share.
How many shares may the customer buy with these right? - CORRECT ANSWER: A
share holder can buy a maximum of 18 shares with these rights paying $432 for them.
The 17.06 shares may be rounded up to 18.
A customer places an to buy bonds. The order reads
"Buy 5M ABC 9s M'35 @ 90 GTC"
,At which of the following will the price be executed
I 89
II 90
III 91
IV 92 - CORRECT ANSWER: I and II
The order is a Limit Buy so the purchase will only be initiated at or below 90
A middle age woman widowed customer has an investment objective of stable income
and wants minimal market and liquidity risk. What type of preferred stock would be the
best recommendation
I Participating
II Convertible
III Straight Preferred Stock
IV Variable rate preferred - CORRECT ANSWER: IV Variable Rate preferred
A municipality wishes to sell a bond issue that is NOT backed by taxing power. Which of
the following bonds can be issued?
I Revenue Bond
, II Industrial Revenue Bond
III General obligation Bond
IV Lease rental bond - CORRECT ANSWER: I , II, and IV
Only General obligation bonds are required by taxing power. The rest are revenue
backed
A Sell Stop order is executed when?
I In falling markets
II In rising markets
III at the price specified
IV At the market price - CORRECT ANSWER: In falling markets
at the market price
Sell stop = Stop loss to prevent further losses it becomes a market order and must fill
Buy stop = protects short sellers it becomes a market order once triggered
Think of stop as a bomb going off
Limit = doesn't trigger if not tripped over.
