SECURITIES INDUSTRY ESSENTIALS EXAM BY
FINRA NEW VERSION WITH ALL QUESTIONS
FROM ACTUAL EXAM, 100% CORRECT ANSWERS
AND RATIONALES
Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes
which of the following positions? - CORRECT ANSWERS-The same stock in different accounts
on the same day
Call protection is most valuable to a bond owner when bond prices are generally - CORRECT
ANSWERS-rising
At the time of issuance, which of the following securities normally has the longest period of expiration? -
CORRECT ANSWERS-warrants
Which of the following represents the effect of a stock split? - CORRECT ANSWERS-The price
per share of common stock decreases
FinCEN accomplishes its mission to safeguard the financial system from the abuses of financial crime,
including terrorist financing and money laundering, by enforcing - CORRECT ANSWERS-The
Securities Act of 1933
Treasury Stock - CORRECT ANSWERS-A corporation's own stock that has been reacquired by
the corporation and is being held for future use.
A savings account at a bank is guaranteed by which of the following entities? - CORRECT
ANSWERS-FDIC
No-Load mutual funds may have lower expense ratios than load mutual funds for which of the following
reasons? - CORRECT ANSWERS-No-load funds are not permitted to charge a 12b-1 fee greater
than 25 basis points
, What is adversely impacted if the issuer's credit rating is downgraded? - CORRECT ANSWERS-
Exchange-traded notes (ETNs)
Annuity contract - CORRECT ANSWERS-A contract under which an insurer promises to make a
series of periodic payments to a named individual in exchange for a premium or series of premiums.
When is interest on Treasury noted paid? - CORRECT ANSWERS-Semiannually
When a broker-dealer charges a commission on a securities transaction, it has acted as - CORRECT
ANSWERS-an agent
Under FINRA rules, non-cash compensation connected with the sale of variable contracts doesn't include
- CORRECT ANSWERS-commissions
A registered representative discussing a 529 college savings plan should explain _________ to the
customer? - CORRECT ANSWERS-the potential deductibility of contributions from state taxes
Investments generally traded according to their average life rather than their stated maturity dates? -
CORRECT ANSWERS-asset-backed securities
An associated person who is not a registered representative is permitted to engage in - CORRECT
ANSWERS-providing account opening forms to a new customer
An investor 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 - CORRECT
ANSWERS-50 shares at $100 per share
Under FINRA rules, this action by registered representatives requires written notification to the firm -
CORRECT ANSWERS-Driving part time for a transportation network company on weekends
The primary purpose of a syndicate desk in the context of an equity offering is to - CORRECT
ANSWERS-build an order book and allocate the stock
FINRA NEW VERSION WITH ALL QUESTIONS
FROM ACTUAL EXAM, 100% CORRECT ANSWERS
AND RATIONALES
Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes
which of the following positions? - CORRECT ANSWERS-The same stock in different accounts
on the same day
Call protection is most valuable to a bond owner when bond prices are generally - CORRECT
ANSWERS-rising
At the time of issuance, which of the following securities normally has the longest period of expiration? -
CORRECT ANSWERS-warrants
Which of the following represents the effect of a stock split? - CORRECT ANSWERS-The price
per share of common stock decreases
FinCEN accomplishes its mission to safeguard the financial system from the abuses of financial crime,
including terrorist financing and money laundering, by enforcing - CORRECT ANSWERS-The
Securities Act of 1933
Treasury Stock - CORRECT ANSWERS-A corporation's own stock that has been reacquired by
the corporation and is being held for future use.
A savings account at a bank is guaranteed by which of the following entities? - CORRECT
ANSWERS-FDIC
No-Load mutual funds may have lower expense ratios than load mutual funds for which of the following
reasons? - CORRECT ANSWERS-No-load funds are not permitted to charge a 12b-1 fee greater
than 25 basis points
, What is adversely impacted if the issuer's credit rating is downgraded? - CORRECT ANSWERS-
Exchange-traded notes (ETNs)
Annuity contract - CORRECT ANSWERS-A contract under which an insurer promises to make a
series of periodic payments to a named individual in exchange for a premium or series of premiums.
When is interest on Treasury noted paid? - CORRECT ANSWERS-Semiannually
When a broker-dealer charges a commission on a securities transaction, it has acted as - CORRECT
ANSWERS-an agent
Under FINRA rules, non-cash compensation connected with the sale of variable contracts doesn't include
- CORRECT ANSWERS-commissions
A registered representative discussing a 529 college savings plan should explain _________ to the
customer? - CORRECT ANSWERS-the potential deductibility of contributions from state taxes
Investments generally traded according to their average life rather than their stated maturity dates? -
CORRECT ANSWERS-asset-backed securities
An associated person who is not a registered representative is permitted to engage in - CORRECT
ANSWERS-providing account opening forms to a new customer
An investor 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 - CORRECT
ANSWERS-50 shares at $100 per share
Under FINRA rules, this action by registered representatives requires written notification to the firm -
CORRECT ANSWERS-Driving part time for a transportation network company on weekends
The primary purpose of a syndicate desk in the context of an equity offering is to - CORRECT
ANSWERS-build an order book and allocate the stock
