STC SIE Exam Prep 2025 With 100%
Correct Answers
Who keeps track of the shareholders of a mutual fund?
A. The custodian bank
B. The transfer agent
C. The investment adviser
D. The underwriter - CORRECT ANSWER✔✔B. The transfer agent
Which of the following choices would NOT be subject to the holding period restriction under
Rule 144?
A. Restricted stock acquired under an investment letter
B. Restricted stock acquired under a stock option plan
C. Control stock acquired under a private placement
D. Control stock acquired through an open-market purchase - CORRECT ANSWER✔✔D. Control
stock acquired through an open-market purchase
There is a required holding period of six months for all restricted stock. Restricted stock is
unregistered stock that was acquired as a result of a private placement. There is no required
holding period for control stock. However, if an affiliate (control person) acquires stock as a
result of a private placement, this stock would be considered restricted stock rather than
control stock and would be subject to the holding period. Control stock acquired as a result of
an open-market purchase is exempt from the holding period.
The investments that tend to perform the WORST during periods of inflation are:
,A. Bonds
B. Mutual Funds
C. ETFs
D. Gold and Silver - CORRECT ANSWER✔✔A. Bonds
If a customer exceeds SIPC limits:
A. The customer will receive cash rather than his securities
B. The customer is a secured creditor
C. The customer doesn't have a claim to the excess amount
D. The customer is a general creditor - CORRECT ANSWER✔✔D. The customer is a general
creditor
When discussing the purchase of a variable annuity with a client, the RR is not required to
disclose:
A. Surrender fees
B. Mortality fees
C. Probate fees
D. Administrative fees - CORRECT ANSWER✔✔C. Probate fees
Probate fees and costs are associated with establishing the validity of a will, which is not a
disclosure item for annuities. However, surrender, mortality, and administrative fees must be
disclosed
,Jamie has inherited 500 shares of an investment company. She calls her broker to redeem the
shares and is informed that the kind of investment company she owns makes no provision for
future purchases or redemptions. What kind of investment company does she own?
A. An open-end fund
B. A closed-end fund
C. A unit investment trust
D. A face-amount certificate company - CORRECT ANSWER✔✔B. A closed-end fund
A closed-end fund makes no provision for future purchases or redemptions from the issuing
fund.
Which of the following is TRUE if a mutual fund investor chooses to implement a systematic
withdrawal plan from the fund?
A. The dividends and capital gains that are generated from the fund will be sufficient to make
the payments.
B. All payments will end on a specific date.
C. The amount of each payment will remain the same.
D. The withdrawals result in a reduction of capital. - CORRECT ANSWER✔✔D. The withdrawals
result in a reduction of capital.
The only true statement is that the plan results in the reduction of capital, since shares will need
to eventually be redeemed to make payments.
A husband and wife have combined earnings of greater than $300,000 in each of the last two
years. If it's reasonably expected that this level of income will remain the same, the couple is
considered:
, A. A qualified investor
B. An accredited investor
C. An institutional investor
D. A qualified institutional buyer (QIB) - CORRECT ANSWER✔✔B. An accredited investor
Accredited investors have a net worth of $1 million (excluding their primary residence) or
annual income of $200,000 in each of the last two years. For married couples to be considered
an accredited investor, they need to have income of at least $300,000. A qualified institutional
buyer (QIB) must be institution with $100 million in assets under management (AUM), but is
NOT a natural person.
All of the following persons are permitted to be named as a trusted contact person for a senior
investor, EXCEPT:
A. A family member
B. A business associate
C. A law firm
D. A friend - CORRECT ANSWER✔✔C. A law firm
To be a trusted contact person for a senior investor, the only requirements are that the person
must be a natural person (not a law firm) and be at least 18 years old.
Which of the following risks does not apply to both foreign and domestic debt instruments?
A. Political
B. Repayment
C. Exchange
D. Interest rate - CORRECT ANSWER✔✔C. Exchange
Correct Answers
Who keeps track of the shareholders of a mutual fund?
A. The custodian bank
B. The transfer agent
C. The investment adviser
D. The underwriter - CORRECT ANSWER✔✔B. The transfer agent
Which of the following choices would NOT be subject to the holding period restriction under
Rule 144?
A. Restricted stock acquired under an investment letter
B. Restricted stock acquired under a stock option plan
C. Control stock acquired under a private placement
D. Control stock acquired through an open-market purchase - CORRECT ANSWER✔✔D. Control
stock acquired through an open-market purchase
There is a required holding period of six months for all restricted stock. Restricted stock is
unregistered stock that was acquired as a result of a private placement. There is no required
holding period for control stock. However, if an affiliate (control person) acquires stock as a
result of a private placement, this stock would be considered restricted stock rather than
control stock and would be subject to the holding period. Control stock acquired as a result of
an open-market purchase is exempt from the holding period.
The investments that tend to perform the WORST during periods of inflation are:
,A. Bonds
B. Mutual Funds
C. ETFs
D. Gold and Silver - CORRECT ANSWER✔✔A. Bonds
If a customer exceeds SIPC limits:
A. The customer will receive cash rather than his securities
B. The customer is a secured creditor
C. The customer doesn't have a claim to the excess amount
D. The customer is a general creditor - CORRECT ANSWER✔✔D. The customer is a general
creditor
When discussing the purchase of a variable annuity with a client, the RR is not required to
disclose:
A. Surrender fees
B. Mortality fees
C. Probate fees
D. Administrative fees - CORRECT ANSWER✔✔C. Probate fees
Probate fees and costs are associated with establishing the validity of a will, which is not a
disclosure item for annuities. However, surrender, mortality, and administrative fees must be
disclosed
,Jamie has inherited 500 shares of an investment company. She calls her broker to redeem the
shares and is informed that the kind of investment company she owns makes no provision for
future purchases or redemptions. What kind of investment company does she own?
A. An open-end fund
B. A closed-end fund
C. A unit investment trust
D. A face-amount certificate company - CORRECT ANSWER✔✔B. A closed-end fund
A closed-end fund makes no provision for future purchases or redemptions from the issuing
fund.
Which of the following is TRUE if a mutual fund investor chooses to implement a systematic
withdrawal plan from the fund?
A. The dividends and capital gains that are generated from the fund will be sufficient to make
the payments.
B. All payments will end on a specific date.
C. The amount of each payment will remain the same.
D. The withdrawals result in a reduction of capital. - CORRECT ANSWER✔✔D. The withdrawals
result in a reduction of capital.
The only true statement is that the plan results in the reduction of capital, since shares will need
to eventually be redeemed to make payments.
A husband and wife have combined earnings of greater than $300,000 in each of the last two
years. If it's reasonably expected that this level of income will remain the same, the couple is
considered:
, A. A qualified investor
B. An accredited investor
C. An institutional investor
D. A qualified institutional buyer (QIB) - CORRECT ANSWER✔✔B. An accredited investor
Accredited investors have a net worth of $1 million (excluding their primary residence) or
annual income of $200,000 in each of the last two years. For married couples to be considered
an accredited investor, they need to have income of at least $300,000. A qualified institutional
buyer (QIB) must be institution with $100 million in assets under management (AUM), but is
NOT a natural person.
All of the following persons are permitted to be named as a trusted contact person for a senior
investor, EXCEPT:
A. A family member
B. A business associate
C. A law firm
D. A friend - CORRECT ANSWER✔✔C. A law firm
To be a trusted contact person for a senior investor, the only requirements are that the person
must be a natural person (not a law firm) and be at least 18 years old.
Which of the following risks does not apply to both foreign and domestic debt instruments?
A. Political
B. Repayment
C. Exchange
D. Interest rate - CORRECT ANSWER✔✔C. Exchange
