SIE FINANCE EXAM||LATEST EXAM WITH
OVER 200 MOST TESTED EXAM QUESTIONS
AND CORRECT VERIFIED
ANSWERS||GRADED A+
What type of risk is unique to a specific industry, business enterprise, or investment
type? -CORRECT ANSWER Nonsystematic risk
Under which of the following circumstances is an investor in a position to acquire stock?
-CORRECT ANSWER Buy a call, sell a call (The holder of a call has the right to buy
stock at the strike price if exercised. The seller of a put is obligated to buy stock at the
strike price if exercised)
Options- a premium -CORRECT ANSWER the cost of an option contract, expressed in
dollars per share of the underlying stock
Options- strike price -CORRECT ANSWER The price at which the stock will be bought
or sold if the contract is exercised, expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to buy 100
shares right now. How could the customer use options to profit from an increase in the
stock's price? -CORRECT ANSWER buy calls, write puts (both are bullish)
A corporation's offer to current stockholders of the ability to purchase a proportionate
number of new shares at a specific price for a limited time is called a -CORRECT
ANSWER right (they usually expire in 30-45 days)
American depositary receipts (ADRs) -CORRECT ANSWER issued by banks, represent
a specific number of shares of a foreign company, and trade and pay dividends in
dollars
Which of the following records must be maintained for 6 years? -CORRECT ANSWER
Customer ledgers (statements)
While underwriters can assist with preparation and filing, the accuracy and adequacy of
these documents is the responsibility of the -CORRECT ANSWER Issuing corporation
What institutions serve as depository and clearing facilities? -CORRECT ANSWER
Depository Trust Company and National Securities Clearing Corporation (most
specifically) then carrying and clearing firms can act as these as well.
,What is a transfer agent? -CORRECT ANSWER (often a bank) for a corporation is
responsible for ensuring that its securities are issued in the correct owner's name,
canceling old and issuing new certificates, maintaining records of ownership, and
handling problems relating to lost, stolen, or destroyed certificates
What is the function of the clearing corporation? -CORRECT ANSWER Acting as an
intermediary in a trade, examples of these can be a commercial bank, can be a broker-
dealer but doesn't have to be
Who is considered a control person (security) -CORRECT ANSWER those owned by
directors, officers, or persons (which include corporations, trusts, etc.) who own or
control 10% or more of the issuer's equity securities (an unaffiliated person would have
to own 10% or more of the outstanding shares)
What are the two components of Return on Investment? -CORRECT ANSWER Capital
gains and income
To expand the overall economy, we want to -CORRECT ANSWER buy securities via
open-market operations, pushing interest rates down
To meet a Regulation T margin call, a customer would have how long? -CORRECT
ANSWER settlement plus 2 additional business days (or S + 2)
What is A fully disclosed broker-dealer -CORRECT ANSWER one that introduces its
business to a carrying firm to clear transactions
The regulation enacted by the SEC to protect the privacy of customer information is
known as -CORRECT ANSWER Regulation S-P
A market maker that does not honor its firm quote is said to be -CORRECT ANSWER
"backing away"
A deficit in the U.S. balance of payments can occur if -CORRECT ANSWER interest
rates in foreign countries are higher than U.S. domestic rates and U.S. consumers are
purchasing (importing) foreign goods
The general partner of a limited partnership has responsibility of -CORRECT ANSWER
Organizing and managing the partnership, assumes unlimited liability, and is
responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to -CORRECT ANSWER
cut taxes (so consumers have more money to spend) and increase government
spending for programs and development (to create more jobs)
What is the federal funds rate -CORRECT ANSWER the rate commercial money center
banks charge each other for an overnight, unsecured loan
, The Federal Open Market Committee (FOMC) -CORRECT ANSWER buy or sell
Treasury securities in the open market. Purchases add money to the economy, making
the money available to lend more plentiful, and sales take money out of the economy,
making money available to lend less plentiful.
Reports of rising inventories generally occur during which period of the business cycle?
-CORRECT ANSWER Contraction, due to a lack of consumer demand
Who is exempt from registering with SIPC? -CORRECT ANSWER Those who deal
exclusively with US Government securities (i.e.-Treasury bonds), exclusively
municipality securities, and in redeemable investment company securities
Retail investor -CORRECT ANSWER An individual who makes investments such as the
purchase of securities for his or her account rather than for an organization
Market maker -CORRECT ANSWER Any entity, individual or organization, willing to
accept the risk of holding a particular security in its own account to facilitate trading and
provide liquidity in that security
When the Federal Reserve Board wants to expand (loosen) the money supply, it will -
CORRECT ANSWER buy Treasury securities from banks in the open market
SROs functioning under the SEC include... -CORRECT ANSWER FINRA, MSRB and
CBOE
Mild inflation can -CORRECT ANSWER encourage growth and stimulate the economy
Discount rate -CORRECT ANSWER The rate the FRB charges member banks
Prime rate -CORRECT ANSWER The rate commercial banks (Wells Fargo) charges
their most creditworthy investors (Lincoln Financial). Prime rate decreases when banks
sell securities because there's money money in the market and don't need to charge as
much. Raise the rate when they buy securities.
4 stages of the business cycle -CORRECT ANSWER expansion (recovery), peak
(prosperity), contraction (decline), trough, and then expansion (recovery) again
Securities Act of 1933 -CORRECT ANSWER (The Paper Act, Prospectus Act, New
Issues Act) requires that issuers who want to raise capital by making a public offering of
securities to the public, provide full and fair disclosure of all material facts about the
company and the securities being offered.
To contract or slow economic growth U.S. fiscal policy should be to -CORRECT
ANSWER raise taxes and cut government spending for programs and development
OVER 200 MOST TESTED EXAM QUESTIONS
AND CORRECT VERIFIED
ANSWERS||GRADED A+
What type of risk is unique to a specific industry, business enterprise, or investment
type? -CORRECT ANSWER Nonsystematic risk
Under which of the following circumstances is an investor in a position to acquire stock?
-CORRECT ANSWER Buy a call, sell a call (The holder of a call has the right to buy
stock at the strike price if exercised. The seller of a put is obligated to buy stock at the
strike price if exercised)
Options- a premium -CORRECT ANSWER the cost of an option contract, expressed in
dollars per share of the underlying stock
Options- strike price -CORRECT ANSWER The price at which the stock will be bought
or sold if the contract is exercised, expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to buy 100
shares right now. How could the customer use options to profit from an increase in the
stock's price? -CORRECT ANSWER buy calls, write puts (both are bullish)
A corporation's offer to current stockholders of the ability to purchase a proportionate
number of new shares at a specific price for a limited time is called a -CORRECT
ANSWER right (they usually expire in 30-45 days)
American depositary receipts (ADRs) -CORRECT ANSWER issued by banks, represent
a specific number of shares of a foreign company, and trade and pay dividends in
dollars
Which of the following records must be maintained for 6 years? -CORRECT ANSWER
Customer ledgers (statements)
While underwriters can assist with preparation and filing, the accuracy and adequacy of
these documents is the responsibility of the -CORRECT ANSWER Issuing corporation
What institutions serve as depository and clearing facilities? -CORRECT ANSWER
Depository Trust Company and National Securities Clearing Corporation (most
specifically) then carrying and clearing firms can act as these as well.
,What is a transfer agent? -CORRECT ANSWER (often a bank) for a corporation is
responsible for ensuring that its securities are issued in the correct owner's name,
canceling old and issuing new certificates, maintaining records of ownership, and
handling problems relating to lost, stolen, or destroyed certificates
What is the function of the clearing corporation? -CORRECT ANSWER Acting as an
intermediary in a trade, examples of these can be a commercial bank, can be a broker-
dealer but doesn't have to be
Who is considered a control person (security) -CORRECT ANSWER those owned by
directors, officers, or persons (which include corporations, trusts, etc.) who own or
control 10% or more of the issuer's equity securities (an unaffiliated person would have
to own 10% or more of the outstanding shares)
What are the two components of Return on Investment? -CORRECT ANSWER Capital
gains and income
To expand the overall economy, we want to -CORRECT ANSWER buy securities via
open-market operations, pushing interest rates down
To meet a Regulation T margin call, a customer would have how long? -CORRECT
ANSWER settlement plus 2 additional business days (or S + 2)
What is A fully disclosed broker-dealer -CORRECT ANSWER one that introduces its
business to a carrying firm to clear transactions
The regulation enacted by the SEC to protect the privacy of customer information is
known as -CORRECT ANSWER Regulation S-P
A market maker that does not honor its firm quote is said to be -CORRECT ANSWER
"backing away"
A deficit in the U.S. balance of payments can occur if -CORRECT ANSWER interest
rates in foreign countries are higher than U.S. domestic rates and U.S. consumers are
purchasing (importing) foreign goods
The general partner of a limited partnership has responsibility of -CORRECT ANSWER
Organizing and managing the partnership, assumes unlimited liability, and is
responsible for paying all partnership debts
To grow or expand the economy, U.S. fiscal policy should be to -CORRECT ANSWER
cut taxes (so consumers have more money to spend) and increase government
spending for programs and development (to create more jobs)
What is the federal funds rate -CORRECT ANSWER the rate commercial money center
banks charge each other for an overnight, unsecured loan
, The Federal Open Market Committee (FOMC) -CORRECT ANSWER buy or sell
Treasury securities in the open market. Purchases add money to the economy, making
the money available to lend more plentiful, and sales take money out of the economy,
making money available to lend less plentiful.
Reports of rising inventories generally occur during which period of the business cycle?
-CORRECT ANSWER Contraction, due to a lack of consumer demand
Who is exempt from registering with SIPC? -CORRECT ANSWER Those who deal
exclusively with US Government securities (i.e.-Treasury bonds), exclusively
municipality securities, and in redeemable investment company securities
Retail investor -CORRECT ANSWER An individual who makes investments such as the
purchase of securities for his or her account rather than for an organization
Market maker -CORRECT ANSWER Any entity, individual or organization, willing to
accept the risk of holding a particular security in its own account to facilitate trading and
provide liquidity in that security
When the Federal Reserve Board wants to expand (loosen) the money supply, it will -
CORRECT ANSWER buy Treasury securities from banks in the open market
SROs functioning under the SEC include... -CORRECT ANSWER FINRA, MSRB and
CBOE
Mild inflation can -CORRECT ANSWER encourage growth and stimulate the economy
Discount rate -CORRECT ANSWER The rate the FRB charges member banks
Prime rate -CORRECT ANSWER The rate commercial banks (Wells Fargo) charges
their most creditworthy investors (Lincoln Financial). Prime rate decreases when banks
sell securities because there's money money in the market and don't need to charge as
much. Raise the rate when they buy securities.
4 stages of the business cycle -CORRECT ANSWER expansion (recovery), peak
(prosperity), contraction (decline), trough, and then expansion (recovery) again
Securities Act of 1933 -CORRECT ANSWER (The Paper Act, Prospectus Act, New
Issues Act) requires that issuers who want to raise capital by making a public offering of
securities to the public, provide full and fair disclosure of all material facts about the
company and the securities being offered.
To contract or slow economic growth U.S. fiscal policy should be to -CORRECT
ANSWER raise taxes and cut government spending for programs and development
