SIE Practice Questions, SIE Practice Test
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A member firm generated a report that contained a review of unusual activity in
customer accounts. This report must be maintained for
a)18 months.
b)24 months.
c)3 years.
d)6 years. - AnswerA
An investor opens a mutual fund account with $3,000. After 45 days, she signs a letter
of intent for a $10,000 breakpoint. Nine months later, she deposits $12,000 into the
fund. Which of the following statements is true?
a)She will receive reduced sales charges on $12,000 worth of shares.
b)She will receive reduced sales charges on $10,000 worth of shares.
c)She will not receive any reduced sales charges.
d)She will receive reduced sales charges on $15,000 worth of shares. - Answerd
Which one of the following statements regarding Coverdell Education Savings Accounts
is correct?
a)Contributions are made with after-tax dollars and grow tax-deferred.
b)Contributions must cease when the beneficiary turns 30.
c)Funds not used for education may be rolled over into an IRA for the beneficiary.
d)All distributions are taxable to the beneficiary. - AnswerA
An order for a security trade that directs the broker to buy or sell "at the market" but only
when a certain price level has been reached is known as
a)A stop order.
b)A market order.
,c)A limit order.
d)Selling short or "shorting." - AnswerA
Under which of the following circumstances is a company NOT permitted to restrict or
close an account?
a)The client has sold a recently purchased security that has settled, or the client only
has 55% equity in the margin account.
b)The custodian of the UGMA account has died.
c)There are two executors on an estate account and only one is listed and signed the
estate account application.
d)The client has sold a recently purchased security that has not yet settled. - Answer
How long do registered persons returning from active duty in the U.S. military have to
associate themselves with a member?
a)30 days
b)60 days
c)90 days
d)180 days - AnswerC
Shares of stock that have actually been sold to the public are known as
a) Outstanding stock.
b)Authorized stock.
c)Issued stock.
d)Treasury stock. - AnswerC
Where can retail investors find information on municipal bond issuers?
a)Munifacts
b)EMMA
c)Local newspaper
d)The daily bond buyer - AnswerB
A registered representative (RR) has acquired a new customer with an existing portfolio
that has five holdings that are equally weighted in the portfolio: technology,
pharmaceuticals, energy, S&P 500 index fund, and money market fund. The RR notes
that in addition to market risk, this portfolio is subject to which of the following risks?
a)Credit
b)Nonsystematic
,c)Political
d)Liquidity - AnswerB
Any changes to information on Form U4 must be updated within how many days?
a)10 days
b)20 days
c)30 days
d)90 days - AnswerC
A guaranteed bond is one that is guaranteed by another company or entity. We would
typically see a guaranteed bond used in which of the following situations?
a)Spinoff
b)Registered secondary offering
c)Competitive bid underwriting
d)Merger - AnswerA
Why might the expense ratio of a no-load mutual fund be lower than that of a mutual
fund with a load?
a)No-load funds may not charge a 12b-1 fee that is greater than 25 basis points.
b)The cost of managing a mutual fund with a load is higher than that of a no-load fund.
c)No-load funds are not permitted to charge 12b-1 fees.
d)Sales charges of mutual funds with loads are included in their expense ratios. -
AnswerA
A Third Market trade involves
a)Listed stocks trading over the counter.
b)Listed or unlisted stocks trading between institutional investors without the services of
a brokerage firm.
c)The trading of unlisted stocks between institutional investors.
d)The trading of NYSE stocks on regional exchanges. - AnswerA
A convertible preferred is convertible at $20 per share. The stock is currently selling on
the market at $120. Which of the following are correct statements is correct?
a)It makes sense to convert at $22.
, b)The common stock must be selling at $24 to be at parity with the preferred stock.
c)The common stock must be selling at $20 to be at parity with the bond.
d)The preferred stock's conversion ratio is 1:6. - AnswerB
All of the following are considered lagging indicators EXCEPT
a)Housing permits.
b)Automobile sales.
c)Appliance sales.
d)Employment. - AnswerA
If the Federal Reserve Board through the FOMC (Federal Open Market Committee)
lowers the discount rate, which of the following will decline?
a)Prime rate
b)Lending levels at banks
c)Inflation rate
d)T-Bill rate - AnswerD
Treasury bills are quoted
a)In 1/8 dollar amounts.
b)On a dollar cost averaging basis.
c)On a discount rate.
d)On a discount yield basis. - AnswerD
An investor owns 1,000 shares of XYZ Corporation, which just declared a stock
dividend of 6%. The stock was selling for $10 just before the dividend was declared.
The dividend announcement will have what effect?
(A) Increase the number of shares the investor owns to 1,060 shares, but will not impact
the total value of the stock holding.
(B) Increase the cash in the account and decrease the number of shares owned.
(C) Increase the number of shares outstanding and lower the investor's proportional
ownership of the company.
(D) Increase the number of shares the investor owns to 1,060 shares and increase the
share price to $10.60 in the market. - AnswerA
With Verified Answers Already GRADED A+
100% GUARANTEED PASS!
A member firm generated a report that contained a review of unusual activity in
customer accounts. This report must be maintained for
a)18 months.
b)24 months.
c)3 years.
d)6 years. - AnswerA
An investor opens a mutual fund account with $3,000. After 45 days, she signs a letter
of intent for a $10,000 breakpoint. Nine months later, she deposits $12,000 into the
fund. Which of the following statements is true?
a)She will receive reduced sales charges on $12,000 worth of shares.
b)She will receive reduced sales charges on $10,000 worth of shares.
c)She will not receive any reduced sales charges.
d)She will receive reduced sales charges on $15,000 worth of shares. - Answerd
Which one of the following statements regarding Coverdell Education Savings Accounts
is correct?
a)Contributions are made with after-tax dollars and grow tax-deferred.
b)Contributions must cease when the beneficiary turns 30.
c)Funds not used for education may be rolled over into an IRA for the beneficiary.
d)All distributions are taxable to the beneficiary. - AnswerA
An order for a security trade that directs the broker to buy or sell "at the market" but only
when a certain price level has been reached is known as
a)A stop order.
b)A market order.
,c)A limit order.
d)Selling short or "shorting." - AnswerA
Under which of the following circumstances is a company NOT permitted to restrict or
close an account?
a)The client has sold a recently purchased security that has settled, or the client only
has 55% equity in the margin account.
b)The custodian of the UGMA account has died.
c)There are two executors on an estate account and only one is listed and signed the
estate account application.
d)The client has sold a recently purchased security that has not yet settled. - Answer
How long do registered persons returning from active duty in the U.S. military have to
associate themselves with a member?
a)30 days
b)60 days
c)90 days
d)180 days - AnswerC
Shares of stock that have actually been sold to the public are known as
a) Outstanding stock.
b)Authorized stock.
c)Issued stock.
d)Treasury stock. - AnswerC
Where can retail investors find information on municipal bond issuers?
a)Munifacts
b)EMMA
c)Local newspaper
d)The daily bond buyer - AnswerB
A registered representative (RR) has acquired a new customer with an existing portfolio
that has five holdings that are equally weighted in the portfolio: technology,
pharmaceuticals, energy, S&P 500 index fund, and money market fund. The RR notes
that in addition to market risk, this portfolio is subject to which of the following risks?
a)Credit
b)Nonsystematic
,c)Political
d)Liquidity - AnswerB
Any changes to information on Form U4 must be updated within how many days?
a)10 days
b)20 days
c)30 days
d)90 days - AnswerC
A guaranteed bond is one that is guaranteed by another company or entity. We would
typically see a guaranteed bond used in which of the following situations?
a)Spinoff
b)Registered secondary offering
c)Competitive bid underwriting
d)Merger - AnswerA
Why might the expense ratio of a no-load mutual fund be lower than that of a mutual
fund with a load?
a)No-load funds may not charge a 12b-1 fee that is greater than 25 basis points.
b)The cost of managing a mutual fund with a load is higher than that of a no-load fund.
c)No-load funds are not permitted to charge 12b-1 fees.
d)Sales charges of mutual funds with loads are included in their expense ratios. -
AnswerA
A Third Market trade involves
a)Listed stocks trading over the counter.
b)Listed or unlisted stocks trading between institutional investors without the services of
a brokerage firm.
c)The trading of unlisted stocks between institutional investors.
d)The trading of NYSE stocks on regional exchanges. - AnswerA
A convertible preferred is convertible at $20 per share. The stock is currently selling on
the market at $120. Which of the following are correct statements is correct?
a)It makes sense to convert at $22.
, b)The common stock must be selling at $24 to be at parity with the preferred stock.
c)The common stock must be selling at $20 to be at parity with the bond.
d)The preferred stock's conversion ratio is 1:6. - AnswerB
All of the following are considered lagging indicators EXCEPT
a)Housing permits.
b)Automobile sales.
c)Appliance sales.
d)Employment. - AnswerA
If the Federal Reserve Board through the FOMC (Federal Open Market Committee)
lowers the discount rate, which of the following will decline?
a)Prime rate
b)Lending levels at banks
c)Inflation rate
d)T-Bill rate - AnswerD
Treasury bills are quoted
a)In 1/8 dollar amounts.
b)On a dollar cost averaging basis.
c)On a discount rate.
d)On a discount yield basis. - AnswerD
An investor owns 1,000 shares of XYZ Corporation, which just declared a stock
dividend of 6%. The stock was selling for $10 just before the dividend was declared.
The dividend announcement will have what effect?
(A) Increase the number of shares the investor owns to 1,060 shares, but will not impact
the total value of the stock holding.
(B) Increase the cash in the account and decrease the number of shares owned.
(C) Increase the number of shares outstanding and lower the investor's proportional
ownership of the company.
(D) Increase the number of shares the investor owns to 1,060 shares and increase the
share price to $10.60 in the market. - AnswerA
